Intel 2001 Annual Report Download

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INTEL CORP
FORM 10-K
(Annual Report)
Filed 03/13/02 for the Period Ending 12/29/01
Address 2200 MISSION COLLEGE BLVD
RNB-4-151
SANTA CLARA, CA 95054
Telephone 4087658080
CIK 0000050863
Symbol INTC
SIC Code 3674 - Semiconductors and Related Devices
Industry Semiconductors
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2008, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ... CORP FORM 10-K (Annual Report) Filed 03/13/02 for the Period Ending 12/29/01 Address 2200 MISSION COLLEGE BLVD RNB-4-151 SANTA CLARA, CA 95054 4087658080 0000050863 INTC 3674 - Semiconductors and Related Devices Semiconductors Technology 12/31 Telephone CIK Symbol SIC Code Industry Sector Fiscal...

  • Page 2
    ... or organization) 94-1672743 (I.R.S. Employer Identification No.) 2200 Mission College Boulevard, Santa Clara, California, 95052-8119 (Address of Principal Executive Offices, Zip Code) Registrant's telephone number, including area code (408) 765-8080 Securities registered pursuant to Section 12...

  • Page 3
    ... incorporated in California in 1968 and reincorporated in Delaware in 1989. PRODUCTS Our major products include: microprocessors, chipsets, boards, networking and communications products such as Ethernet network interface cards and network processors, embedded control chips, and flash memory used...

  • Page 4
    .... Our strategy for the server platform is to provide higher performance processors and the best price for performance for the various server and workstation market segments. • The Intel Architecture business's products include processors and board- and system-level products based on the IA-32...

  • Page 5
    ...and product integrators build their servers around Intel processors. We designed seven server board and server chassis products to meet the specifications of a wide range of computing applications, from high-density, rack-mount server environments to email servers, print servers and database servers...

  • Page 6
    ... Port (AGP) specification. A bus is a circuit that carries data between parts of the system, for example, between the processor and main memory. Our customers demand memory architecture alternatives, and as a result, we currently offer chipsets supporting Rambus* Dynamic Random Access Memory (RDRAM...

  • Page 7
    ... consultants in data centers worldwide providing application porting, tuning, optimization, scaling, benchmarking and integration of software solutions. Sales and gross margin. During 2001, sales of microprocessors based on the P6 microarchitecture and related board-level products and chipsets...

  • Page 8
    ... called transponders. Network processing components. The Intel® Internet Exchange Architecture (Intel® IXA) provides a flexible platform for the networking and communications industry to build faster, more intelligent networks using reprogrammable silicon. Our network processor products consist of...

  • Page 9
    ...0.13-micron manufacturing process technology and plan to beginning shipping these components to customers in the second quarter of 2002. This new flash chip is nearly 50% smaller and consumes less power than its 0.18-micron predecessor, making it ideal for cell phones and other electronics equipment...

  • Page 10
    ... we acquired in 2000. In addition to this Colorado site, we also manufacture flash memory in Oregon, New Mexico and California using our 0.18-micron process technology. We perform a substantial majority of our components assembly and testing, including assembly and testing for microprocessors, at...

  • Page 11
    ...of this Form 10-K. EMPLOYEES As of December 29, 2001, we employed approximately 83,400 people worldwide. SALES Most of our products are sold or licensed through sales offices located near major concentrations of users throughout North America, Europe, Asia-Pacific, Japan and other parts of the world...

  • Page 12
    ... communications business, our strategy is to deliver complete solutions that enable quick deployment of applications and services for wireless Internet and personal information devices. For these segments, we offer flash memory products, processors based on the Intel StrongARM processor and Intel...

  • Page 13
    ... with the Intel Communications Group. Under our Intel Capital program, we also make equity investments to further our strategic objectives and to support our key business initiatives for the desktop and mobile platforms, server platforms, networking and communications, and Internet services. We want...

  • Page 14
    ...number of our components under the Chip Protection Act of 1984. We have obtained certain trademarks and trade names for our products to distinguish genuine Intel products from our competitors' products, and we are currently engaged in a cooperative program with OEMs to identify with the Intel Inside...

  • Page 15
    .... Paul S. Otellini (age 51) has been President and Chief Operating Officer since January 2002. Prior to that Mr. Otellini was Executive Vice President and General Manager, Intel Architecture Group, from 1998 to January 2002; Executive Vice President and Director, Sales and Marketing Group, from 1996...

  • Page 16
    ... class-action lawsuit in the United States District Court for the Northern District of California, alleging violations of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission (SEC) Rule 14d-10 in connection with Intel's acquisition of DSP Communications, Inc. The complaint...

  • Page 17
    ...Calif. Superior Court, Santa Clara County In September, October and November 2001, various plaintiffs filed lawsuits against Intel alleging violations of the Securities Exchange Act of 1934. The five class-action complaints allege that purchasers of Intel stock between July 19, 2000 and September 29...

  • Page 18
    ... to the start of the Quiet Period (described below), the public can continue to rely on the Outlook on the Web site as still being our current expectations on matters covered, unless we publish a notice stating otherwise. From the close of business on March 15, 2002, we will observe a "Quiet Period...

  • Page 19
    ... The information appearing under the headings "Directors' Compensation," "Employment Contracts and Change of Control Arrangements," "Report of the Compensation Committee on Executive Compensation," "Stock Price Performance Graph," and "Executive Compensation" of the 2002 Proxy Statement is...

  • Page 20
    ...the portions of such report referred to in Items 1, 5, 6, 7, 7A and 8 of this Form 10-K, the 2001 Annual Report to Stockholders is not to be deemed filed as part of this report. 25 INTEL CORPORATION SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS December 25, 1999, December 30, 2000 and December 29...

  • Page 21
    ... 11, 1998). Intel Corporation Executive Officer Bonus Plan as amended and restated effective January 1, 2000 (incorporated by reference to Exhibit A of Registrant's proxy statement on Schedule 14A as filed on April 12, 2000). Intel Corporation Sheltered Employee Retirement Plan Plus, as amended...

  • Page 22
    ..., independent auditors. Compensation plans or arrangements in which directors and executive officers are eligible to participate. 27 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its...

  • Page 23
    ... PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS...

  • Page 24
    ... also have and maintain an office or principal place of business at 2200 Mission College Boulevard, Santa Clara, County of Santa Clara, State of California, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time...

  • Page 25
    ... electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting, either (a) on a reasonably accessible electronic network...

  • Page 26
    ...of such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the corporation in the manner required by this section. Section 9. Nominations and Stockholder Business. (a) Nominations of persons for election to the Board of...

  • Page 27
    ..., its business conducted and its property controlled by or under the direction of the Board of Directors. Section 3. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office...

  • Page 28
    ...by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or of such committee, as the case may be, consent thereto in writing, and...

  • Page 29
    ...place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any 8 director by attendance thereat. A majority of the authorized number of members of any such committee shall...

  • Page 30
    ... other corporate instruments or documents requiring the corporate seal, and certificates of shares of stock owned by the corporation, shall be executed, signed or endorsed by the Chairman of the Board, the President, any Vice President or the Secretary. All other instruments and documents requiring...

  • Page 31
    ... Vice President and by the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed...

  • Page 32
    ... All bonds, debentures and other corporate securities of the corporation, other than stock certificates, may be signed by the Chairman of the Board or the President or any Vice President or such other person as may be authorized by the Board of Directors and the corporate seal impressed thereon or...

  • Page 33
    ... otherwise. Expenses incurred by other Agents of the corporation (or by the directors or officers not acting in their capacity as such, including service with respect to employee benefit plans) may be advanced upon such terms and conditions as the Board of Directors deems appropriate. Any obligation...

  • Page 34
    ...any meeting or other action. (b) Any notice required to be given to any director may be given by the method hereinabove stated. Any such notice, other than one which is delivered personally, shall be sent to such post office address, facsimile number or electronic mail address as such director shall...

  • Page 35
    ...shall be delivered to the Secretary at the principal executive offices of the corporation. If delivered by electronic mail or facsimile, the stockholder's notice shall be directed to the Secretary at the electronic mail address or facsimile number, as the case may be, specified in the company's most...

  • Page 36
    ... 1.05 .86 .97 .73 .50 .33 .33 .16 (In millions-except employees and per share amounts) 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 Employees at year-end (in thousands) 83.4 86.1 70.2 64.5 63.7 48.5 41.6 32.6 29.5 25.8 Total assets 44,395 47,945 43,849 31,471 28,880 23,735...

  • Page 37
    ... General Manager of the Intel Architecture Group, to President and Chief Operating Officer of Intel. Intel Communications Group > Net revenues decreased by $903 million, or 26%, in 2001 compared to 2000, primarily due to significantly lower unit volumes of embedded control chips, network processing...

  • Page 38
    ... to the higher research and development spending from acquired businesses, partially offset by revenues from the higher sales volume of network processing components and telecommunications-related products. Wireless Communications and Computing Group > Net revenues decreased by $437 million, or 16...

  • Page 39
    ...of profits. Purchased in-process research and development The following table summarizes the significant assumptions underlying the valuations related to IPR&D from major companies acquired at the time of acquisition in fiscal 2001, 2000 and 1999. Estimated cost to complete technology Discount rate...

  • Page 40
    ... worldwide manufacturing capacity, working capital requirements and the dividend program. Financial market risks We are exposed to financial market risks, including changes in interest rates, non-U.S. currency exchange rates and marketable equity security prices. To mitigate these risks, we utilize...

  • Page 41
    ...make it easier for end users to deploy best-of-class solutions on Intel architecture products. We plan to cultivate new businesses as well as continue to work with the computing industry to expand Internet capabilities and product offerings, and develop compelling software applications that can take...

  • Page 42
    ... discount rates. The estimates we have used are consistent with the plans and estimates that we are using to manage the underlying businesses. If we fail to deliver new products for these groups, if the products fail to gain expected market acceptance, or if market conditions in the communications...

  • Page 43
    ... process technology; excess manufacturing capacity; the ability to sustain and grow networking, communications, wireless and other Internet-related businesses, and successfully integrate and operate any acquired businesses; unanticipated costs or other adverse effects associated with processors...

  • Page 44
    ... costs Purchased in-process research and development (Gains) losses on equity investments, net (Gain) loss on investment in Convera Net loss on retirements of property, plant and equipment Deferred taxes Tax benefit from employee stock plans Changes in assets and liabilities: Trading assets Accounts...

  • Page 45
    ...) financing activities: Increase in short-term debt, net Additions to long-term debt Repayment and retirement of long-term debt Proceeds from sales of shares through employee stock plans and other Proceeds from sales of put warrants Repurchase and retirement of common stock Payment of dividends to...

  • Page 46
    ... Proceeds from sales of shares through employee stock plans, tax benefit of $435 and other Issuance of common stock and aassumption of stock options in connection with acquisitions, net Amortization of acquisition-related unearned stock compensation Repurchase and retirement of common stock Cash...

  • Page 47
    ..., certain non-marketable investments, short-term debt, long-term debt, swaps, currency forward contracts, equity options and warrants are based on quoted market prices or pricing models using current market rates. Debt securities are generally valued using discounted cash flows in an industry...

  • Page 48
    ...with the customer, transfer of title and acceptance if applicable, fixed pricing and probable collectibility. Because of frequent sales price reductions and rapid technology obsolescence in the industry, sales made to distributors under agreements allowing price protection and/or right of return are...

  • Page 49
    ... borrowings under commercial paper programs reached $105 million during 2001 and $539 million during 2000. This debt is rated A-1+ by Standard & Poor's and P-1 by Moody's. Long-term debt > Long-term debt at fiscal year-ends was as follows: (In millions) Payable in U.S. dollars: Puerto Rico bonds...

  • Page 50
    ...assets outstanding at fiscal year-ends were as follows: 2001 Net unrealized gains (losses) $ (15) 72 35 92 $ Net unrealized gains (losses) 836 74 314 1,224 $ - - (39) (39) $ 2000 (In millions) Debt instruments Equity securities Equity securities offsetting deferred compensation Total trading assets...

  • Page 51
    ... Swaps related to investments in debt securities Options related to deferred compensation liabilities Short-term debt Long-term debt Swaps hedging debt Currency forward contracts Due to restrictions on sales extending beyond one year, publicly traded securities with a carrying value of $85 million...

  • Page 52
    ... In December 2000, Intel contributed its Interactive Media Services division to Convera Corporation and invested $150 million in cash in exchange for 14.9 million voting and 12.2 million non-voting shares of Convera. Intel recognized a gain of $117 million on the portion of the business and related...

  • Page 53
    ... price is equal to the fair market value of Intel common stock at the date of grant. Intel has also assumed the stock option plans and the outstanding options of certain acquired companies. No additional stock grants will be granted under these assumed plans. Options granted by Intel currently...

  • Page 54
    ... long-term retention value of these stock options. The company intends to reduce merit grants in 2002 by the shares in this early grant program. The 2002 merit grant vests in 2007, on about the same date it would vest if granted in 2002. The range of option exercise prices for options outstanding at...

  • Page 55
    ... per share $ $ $ 2001 254 .04 .04 $ $ $ 2000 9,699 1.45 1.40 $ $ $ 1999 6,860 1.03 .99 Retirement plans > The company provides tax-qualified profit-sharing retirement plans (the "Qualified Plans") for the benefit of eligible employees, former employees and retirees in the U.S. and Puerto Rico and...

  • Page 56
    ... process electrical signals within optical modules after those signals have been converted from light waves. Cognet has developed electronic components for use in 10-Gigabit Ethernet modules. In May 2001, the company acquired LightLogic, Inc. in exchange for 14.2 million shares of Intel common stock...

  • Page 57
    ... a class-action lawsuit in the United States District Court for the Northern District of California, alleging violations of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission Rule 14d-10 in connection with Intel's acquisition of DSP Communications. The complaint alleges...

  • Page 58
    ... gross margin. For 2000, sales of microprocessors and related products based on the P6 microarchitecture comprised a substantial majority of our consolidated net revenues and gross margin. The Intel Communications Group's products include Ethernet connectivity products, network processing components...

  • Page 59
    ...revenues. In both 2000 and 1999, two customers each accounted for 13% of the company's revenues. A substantial majority of the sales to these customers were Intel Architecture products. Geographic revenue information for the three years ended December 29, 2001 is based on the location of the selling...

  • Page 60
    ... share Diluted earnings per share Dividends per share Declared Paid Market price range common stock †High Low (In millions-except per share amounts) 2000 for quarter ended Net revenues Cost of sales Amortization of goodwill and other acquisition-related intangibles and costs Purchased in-process...

  • Page 61
    ... Services, Inc. Intel Overseas Corporation Intel Overseas Funding Corporation Intel Products (M) Sdn. Bhd. Intel Puerto Rico Limited Intel Semiconductor Limited Intel Technology Finance Limited Intel Technology Phils., Inc. Intel Technology Sdn. Berhad Level One Communications, Inc. Mission College...

  • Page 62