Intel 2013 Annual Report Download - page 34

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Our Q4 2013 revenue of $13.8 billion was up 3% from Q3 2013. The sequential increase was a result of
stabilization in the PC market which generated 3% higher platform unit sales for PCCG. Gross margin remained flat
sequentially as lower platform unit costs were offset by higher factory start-up costs for our 14nm process
technology. The platform unit cost decline is attributable to our 22nm process technology coming down the cost
curve as we ramp the 4th generation Intel Core processor family products in multiple fabrication facilities.
In 2013, we introduced many new product technologies across all of our businesses. Our product launches included
the 4th generation Intel Core processor family, Intel Xeon 22nm processors, and Intel Atom microarchitecture
platforms. As 2013 progressed, we shifted our focus and investment strategy in order to increase our cadence for
bringing innovative products to market. One example is the announcement of Intel Quark SoC which is an ultra-low
power and cost architecture designed for the Internet of Things, from industrial machines to future wearable
devices.
The cash generation from our business remained strong with cash from operations of $20.8 billion in 2013. We
ended the year with an investment portfolio of $20.1 billion, which consisted of cash and cash equivalents, short-
term investments, and trading assets. We returned $4.5 billion to stockholders through dividends and repurchased
$2.1 billion of common stock through our common stock repurchase program. We purchased $10.7 billion in capital
assets as we continued making investments in new architectures and product offerings. In January 2014, the Board
of Directors declared a cash dividend of $0.225 per common share to be paid in Q1 2014.
Looking ahead to 2014, we expect revenue and gross margin to remain flat. We believe our product offerings and
architectures will enable innovation and allow for future growth in the PC market through all-in-ones, 2 in 1s,
convertibles and detachables. The launch of new low-power, high-performance products will continue to expand our
footprint in tablets and our Internet of Things business. We also continue to make progress with the industry’s first
14nm manufacturing process and our second generation 3-D transistors (code-named “Broadwell”). Our second
generation 3-D transistors will begin production in Q1 2014 and is expected to launch in the second half of 2014. As
we continue to align resources to focus on tablets, low-power SoCs, and the data center, we will also streamline our
overall investment position in order to hold spending flat for the year.
Our Business Outlook for Q1 2014 and full-year 2014 includes, where applicable, our current expectations for
revenue, gross margin percentage, spending (R&D plus MG&A), and capital expenditures. We will keep our most
current Business Outlook publicly available on our Investor Relations web site www.intc.com. This Business Outlook
is not incorporated by reference in this Form 10-K. We expect that our corporate representatives will, from time to
time, meet publicly or privately with investors and others, and may reiterate the forward-looking statements
contained in the Business Outlook or in this Form 10-K.
The statements in the Business Outlook and forward-looking statements in this Form 10-K are subject to revision
during the course of the year in our quarterly earnings releases and SEC filings and at other times. The forward-
looking statements in the Business Outlook will be effective through the close of business on March 14, 2014,
unless updated earlier. From the close of business on March 14, 2014, until our quarterly earnings release is
published, currently scheduled for April 15, 2014, we will observe a “quiet period.” During the quiet period, the
Business Outlook and other forward-looking statements first published in our Form 8-K filed on January 16, 2014,
and other forward-looking statements disclosed in the company's news releases and filings with the SEC, as
reiterated or updated as applicable in this Form 10-K, should be considered historical, speaking as of prior to the
quiet period only and not subject to update. During the quiet period, our representatives will not comment on our
Business Outlook or our financial results or expectations. The exact timing and duration of the routine quiet period,
and any others that we utilize from time to time, may vary at our discretion.
Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)