Form 8-K INTEL CORP For: Nov 19
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 2015
INTEL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 000-06217 | 94-1672743 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
2200 Mission College Blvd., Santa Clara, California 95054-1549
(Address of principal executive offices) (Zip Code)
(408) 765-8080
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure |
On November 19, 2015, Intel Corporation (“Intel”) presented business and financial information to institutional investors, analysts, members of the press and the general public at a publicly available webcast meeting (the “Investor Meeting”). Attached hereto as exhibits and incorporated by reference herein are the Investor Meeting presentations made by Brian Krzanich, Chief Executive Officer; William Holt, Executive Vice President, General Manager of the Technology and Manufacturing Group; Stacy Smith, Executive Vice President and Chief Financial Officer; Diane Bryant, Senior Vice President, General Manager of the Data Center Group; and Kirk Skaugen, Senior Vice President, General Manager of the Client Computing Group, respectively. During the course of the Investor Meeting, Intel’s executives discussed the company’s corporate strategy, advancing Moore’s Law, financial performance, and business updates. The presentations include forward-looking statements and accompanying Risk Factors. These presentations are among the several presentations made by Intel executives at the Investor Meeting, each of which may be found at intc.com.
The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
The following exhibits are filed as part of this Report:
| Exhibit |
Description | |
| 99.1 | Investor Meeting Presentation by Brian Krzanich, dated November 19, 2015 | |
| 99.2 | Investor Meeting Presentation by William Holt, dated November 19, 2015 | |
| 99.3 | Investor Meeting Presentation by Stacy Smith, dated November 19, 2015 | |
| 99.4 | Investor Meeting Presentation by Diane Bryant, dated November 19, 2015 | |
| 99.5 | Investor Meeting Presentation by Kirk Skaugen, dated November 19, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INTEL CORPORATION | ||||||
| (Registrant) | ||||||
| Date: November 19, 2015 | /s/ Suzan A. Miller | |||||
| Suzan A. Miller | ||||||
| Vice President, Deputy General Counsel and | ||||||
| Corporate Secretary | ||||||
| Exhibit 99.1
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investor meeting
2015 SANTA CLARA
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investor meeting
2015 SANTA CLARA
Brian Krzanich
Chief Executive Officer
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agenda
2015 Results
Intel’s Corporate Strategy Intel’s Foundation Intel’s Growth Engines Investing for the Future Summary & Intel’s Commitment
| 3 |
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agenda
2015 Results
| 4 |
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Leadership Moving Forward
Relentless pursuit of Moore’s Law
Develop products that enable the best computing experience
Market driven view of our industry
Open foundry to any company able to utilize our leading edge Silicon
Create Platforms for Enterprise, not just Silicon
Drive focus on bringing innovation to market quickly
Continue growth in the Data Center
If it is smart and connected, it is best with Intel
Investor Meeting 2014
| 5 |
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2015 Financial Results*
Full Year Full Year Full Year Operating
Revenue of Gross Margin Profit Between
~$55.2B ~62% $13.5—$14.0B
6 *The 2015 forecast is based on Q1-Q3’15 actuals plus the midpoint of the Q4’15 forecast.
Forecast range is based on current expectations and is subject to change without notice
Source: Intel
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agenda
Intel’s Corporate Strategy
| 7 |
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Strategic Vectors
MOORE’S LAW INTEGRATION SHARED IP
Memory Graphics
I/O WiFi
Our highest shareholder value will come from a strategy that uses our core assets to move into profitable, complementary markets
| 8 |
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Moore’s LAw
A source of long-term competitive advantage
9
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agenda
Intel’s Foundation
10
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Our Client business
A strong foundation
· Volume enabling investment in Moore’s Law
· IP used across our businesses
· A strong footprint in the ecosystem· Brand Value
· Cash flows adding shareholder value
11
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Maximizing Client Innovation the Return in & our Segmentation Client Business
12
Other brands and names may be claimed as the property of others
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13
Mobile Client
Maintaining Momentum
Tablets Phones
Maintain Footprint Scaling With Partners
~26 Mu
Q1-Q3’15 Volume
Other brands and names may be claimed as the property of others
13
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Intel Transforming
2015
DCG, IOTG, MEMORY & SSG
~40%
of Revenue
~65%
of Operating Margin
14
Source: Intel
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agenda
Intel’s Growth Engines
15
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Intel’s Virtuous Cycle
of Growth
16
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Evolution of the Cloud
Today
Cloud driven by People
Tomorrow
Cloud driven by Things
17
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You 24x7
Cardiovascular and Wellness Study
Cloud of Things
In Action
18
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Data Center Opportunities for Growth
Cloud Service Providers
Enterprise IT
Communication Service Providers
High Performance Compute
19
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Data Center Opportunities for Growth
devices
Network cloud
20
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Internet of things
Retail Solutions
Transportation & Automotive
Smart Home & Building
Industrial & Energy
Markets & Channels Acceleration
21
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Memory
Accelerating the
Virtuous Cycle
Data center
Memory
IOT
22
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3D Xpoint™ Technology
Intel® Optane™ SSD
DIMMs based on 3D XPoint™
23
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agenda
Investing for the Future
24
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Data center
Memory
IOT
Feeds the virtuous cycle
altera
25
Other brands and names may be claimed as the property of others
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Wireless
End-to-end leadership from device to cloud
26
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agenda
Summary & Intel’s Commitment
27
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Key Takeaways
Intel’s Strategy Creates Long-Term Shareholder Value Seeing Strength in Client, yet, not a prerequisite for Growth DCG, IOT, and Memory form a virtuous cycle for Growth
A Commitment from Intel’s Leadership Team
28
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investor meeting
2015 SANTA CLARA
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Risk Factors
The statements in this presentation and other commentary that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company’s expectations. Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in business and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of Intel’s products, products used together with Intel products and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, which may result in restructuring and asset impairment charges. Intel’s results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice. Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. The amount, timing and execution of Intel’s stock repurchase program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows or changes in tax laws. Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation. Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property. Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. In addition, risks associated with our pending acquisition of Altera are described in the
“Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by reference herein. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q, Form 10-K and earnings release.
30
| Exhibit 99.2
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investor meeting
2015 SANTA CLARA
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Advancing moore’s law
Bill Holt
Executive Vice President
General Manager, Technology and Manufacturing Group
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Agenda
Progress
14nm Update
Cost per Transistor Trend
Economics of Moore’s Law
– What does it take to afford to continue?
Competitiveness
Forward looking options
3
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14 nm Product Yield Is In Healthy Range
14nm Broadwell Yield Trend
Increasing Yield
Investor Meeting 2014
22nm Is Intel’s Highest Yielding Process Ever
22 nm data are shifted to align date of lead product qual
4
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14 nm Yield Is Maturing
1H’14 2H‘14 1H’15 2H’15 1H’16
22 nm data are shifted to align date of lead product qual
Trending to match 22nm yields
Source: Intel
5
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Cost per Transistor Trend
100
10
1
0.1
X
0.01
1
0.1
+
0.01
$ / mm2 (normalized) mm2 / Transistor (normalized) $ / Transistor (normalized)
Source: Intel estimate, based upon available information and subject to change
6
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Agenda
Progress
14nm Update
Cost per Transistor Trend
Economics of Moore’s Law
– What does it take to afford to continue?
Competitiveness
Forward looking options
7
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Moore’s Law Enables Innovation and Cost Reductions
32nm 22nm 14nm 10nm 7nm 5nm
Twice the
Same circuitry circuitry in the Option to design half the space OR same space = for optimal (cost reduction) (architectural performance/cost innovation)
Source: Intel
8
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AdvancING Process Technology Lowers Costs
Ten Year Model of Manufacturing and Process R & D
$302B
2011 Analysis
Same ten process years for
$104B
Process R & D
Develop processes new
Manufacturing Costs
Assumptions are theoretical and not forecasts.
Source: Intel
9
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AdvancING Process Technology Lowers Costs
Ten Year Model of Manufacturing and Process R & D
2015 Update $270B Same ten process years for
$116B
Process R & D
Develop processes new
Manufacturing Costs
Assumptions are theoretical and not forecasts.
Source: Intel
10
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Three Ways To Test the Model:
Lower unit demand
Higher technology development cost
Reduced cost per transistor improvement
11
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Three Ways To Test THE Model: Unit Demand changes
Assumptions are theoretical and not forecasts
Source: Intel
12
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Three Ways To Test THE Model: R&D cost Increases
Higher R&D investment growth will NOT limit Moore’s Law
Assumptions are theoretical and not forecasts.
Source: Intel
13
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Three Ways To Test THE Model: CPT improvement reduces
1.0
Per
Cost CPT~0.86
Reduction
Normalized Transistor CPT~0.69x 0.1
65nm 45nm 32nm 22nm 14nm 10nm Historical CPT 14nm/10nm Overscaling BE CPT
Poorer CPT scaling could challenge economic benefits
Assumptions are theoretical and not forecasts
Source: Intel
14
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Agenda
Progress
14nm Update
Cost per Transistor Trend
Economics of Moore’s Law
– What does it take to afford to continue?
Competitiveness
Forward looking options
15
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Logic Area Scaling Trend (Publicly available scaling information)
16
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ESTIMATED FULL CHIP SCALING
Area scaling estimate includes more of the technology features
Sources: TSMC keynote, ARM Tech Con 2012, Oct. 30, 2012, 2014 TSMC Technology Symposium, April 22, 2014, Samsung, Globalfoundries Prep 14nm Process, EE Times 4/17/2014, 2014.
2014 VLSI Technology Symposium abstract—A 10nm Platform Technology for Low Power and High Performance Application Featuring FINFET Devices with Multi Workfunction Gate Stack on Bulk and SOI, Samsung, Global Foundries, et. al. Intel: P1274/P1275 Definition Wrap-up, TMG Technology Density working group, * Projected Other names and brands may be claimed as the property of others.
17
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TRANSISTOR DENSITY FROM ACTUAL PRODUCTS
Source: Intel Internal analysis
Other names and brands may be claimed as the property of others.
18
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Composition Matters
Source: Intel Internal analysis
Other names and brands may be claimed as the property of others.
19
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TRANSISTOR DENSITY NORMALIZED FOR COMPOSITION
Source: Intel Internal analysis
Other names and brands may be claimed as the property of others.
Source: Intel internal analysis
20
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FULL CHIP SCALING UPDATED WITH ACTUAL 14/16NM PRODUCTS
Intel 14nm provides significant density advantage
Sources: TSMC keynote, ARM Tech Con 2012, Oct. 30, 2012, 2014 TSMC Technology Symposium, April 22, 2014, Samsung, Globalfoundries Prep 14nm Process, EE Times 4/17/2014, 2014.
2014 VLSI Technology Symposium abstract—A 10nm Platform Technology for Low Power and High Performance Application Featuring FINFET Devices with Multi Workfunction Gate Stack on Bulk and SOI, Samsung, Global Foundries, et. al. Intel: P1274/P1275 Definition Wrap-up, TMG Technology Density working group, * Projected Other names and brands may be claimed as the property of others.
21
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Future Options Being Investigated
High RF, mm-Wave Voltage
HETEROGENEOUS INTEGRATION
Sensors/Actuators SELECTIVE
Quantum DEPOSITION
FUNCTION INTEGRATION SYSTEM DIRECTED SELF-ASSEMBLY
Flexible/Stretchable
RRAM and STTM Nanowire Tunnel FET III-V III-V Spin-based
SCALING Source: Intel
22
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Summary
14nm yields, availability and product portfolio MATURING
Cost per Transistor is difficult, but progress is PROMISING
Economics of Moore’s Law for Intel are SOLID
Our view of competition is UNCHANGED
Innovation and change will be required looking forward but….
The research pipeline is challenging but FULL
23
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investor meeting
2015 SANTA CLARA
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Risk Factors
The statements in this presentation and other commentary that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company’s expectations. Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in business and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of Intel’s products, products used together with Intel products and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, which may result in restructuring and asset impairment charges. Intel’s results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice. Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. The amount, timing and execution of Intel’s stock repurchase program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows or changes in tax laws. Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation. Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property. Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. In addition, risks associated with our pending acquisition of Altera are described in the “Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by reference herein. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q, Form 10-K and earnings release.
25
| Exhibit 99.3
|
investor meeting
2015 SANTACLARA
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investor meeting
2015 SANTACLARA
Stacy Smith
Chief Financial Officer
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Key Message: Driving Shareholder Return
Data Center: Big and Delivering Growth
Client Computing enables critical IP blocks, profits, and cash flow
Internet of Things and Memory Delivering Growth
Insights into Investments, Cost and Capex
Disciplined Capital Allocation
3
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2015 Financial Results
Full Year
Revenue*
~$55.2B
Full Year
Gross Margin*
~62%
Full Year Operating
Profit Between**
$13.5—$14.0B
4 *2015 forecast is based on Q1-Q3 actuals plus the midpoint of Q4 Business Outlook as announced on October 13, 2015.
**Forecast range is based on current expectations given available information and is subject to change without notice .
Source: Intel
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GDP Forecasts for 2015
5 Forecast is based on current expectations given available information and is subject to change without notice.
Source: IHS, November 2014 and November 2015 Forecasts.
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Key Message: Driving Shareholder Return
Data Center: Big and Delivering Growth
Client Computing enables critical IP blocks, profits, and cash flow
Internet of Things and Memory Delivering Growth
Insights into Investments, Cost and Capex
Disciplined Capital Allocation
6
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Data Center Group
DCG Full Year Financials
YTD 2015 PERFORMANCE
$11.7B of Revenue:
Up 13% YoY
$5.7B Operating margin:
Up 11% YoY
49% of revenue
7
Source: Intel
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Data Center ~ CPU Revenue
HPC, Workstation,
Enterprise Server
Networking & Storage Cloud Server
14-15* growth:
Slightly down
14-15* growth:
~10%
14-15* growth:
>40%
8
*Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Data Center ~ CPU Revenue Mix
2013
9
Source: Intel
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Data Center ~ CPU Revenue MIX
10
*Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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DCG 2016 Expectations
Revenue growth in the mid-teens
Operating Profit growth
in the low double digits
11 Note: 2016 fiscal year has 53 work weeks.
Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Key Message: Driving Shareholder Return
Data Center: Big and Delivering Growth
Internet of Things and Memory Delivering Growth
Insights into Investments, Cost and Capex
Disciplined Capital Allocation
Client Computing enables critical IP blocks, profits, and cash flow
12
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PC TAM Forecast Changes For 2015
Forecast is based on current expectations given available information and is subject to change without notice. For comparison purposes, IDC data has been adjusted to align with Intel’s “PC” definition which includes detachables. IDC reported its current 2015 forecast (excluding detachables) as
-9% YoY. A year ago, IDC reported its 2015 forecast (excluding detachables) as -2%. There were no adjustments to Gartner’s forecasts.
13 Source: IDC and Gartner. “Current” forecasts for IDC and Gartner were released on Aug 20, 2015 and on Sept 17, 2015 respectively.
“A year ago” forecasts for IDC and Gartner were released on Aug 20, 2014 and on Sept 15, 2014 respectively.
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Client Computing Group
CCG Full Year Financials
YTD 2015 PERFORMANCE
~$23.5B of Revenue:
Down 10% YoY
~$5.4B Operating margin:
Down 27% YoY
~23% of revenue
14
Source: Intel
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PC ASP & Segmentation
2015 Core Mix**
>70%
at an all time high
15 *PC ASPs include both CPU and chipset and excludes netbook.
**Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Improving Mobile Profitability in CCG
On-track to exceed 2015 $800M Mobile* Profitability goal
~one-third from product margin improvements
~two-thirds from lower investment
Low Double Digit Operating Profit Growth** for CCG in 2016
includes ~$800M of mobile profitability improvements
~two-thirds product margin improvements
~one-third from lower investment
16 * Mobile products are part of the CCG segment.
**Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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2014 Strategy Recap
IP and Manufacturing
leadership are increasingly
valuable advantages
17
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2015 Client Computing Business
Generates FCF + Profits:
~$8B in operating profit
Gives us scale:
>80% of total units
Funds IP for use across the company:
>50% of Shared IP Originates from Client Investments
18
Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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CCG 2016 Expectations
PC Market projection: Slightly down,
vs. 3rd party projections of ~flat
CCG Revenue:
Flat to low single-digit growth
CCG Op Profit:
Growth in the low double digits
19 Note: 2016 fiscal year has 53 work weeks.
Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Key Message: Driving Shareholder Return
Internet of Things and Memory Delivering Growth
20
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IOTG, NSG and SSG delivering Revenue Growth
| 21 |
|
*Forecast is based on current expectations given available information and is subject to change without notice. |
Source: Intel
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Other Elements of our Portfolio
Internet of
Things Group
Software and
Services Group
Non-Volatile Memory
Solutions Group
Revenue Operating Margin
| 22 |
|
*Forecast is based on current expectations given available information and is subject to change without notice. |
Source: Intel
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Key Message: Driving Shareholder Return
Insights into Investments, Cost and Capex
23
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2014 – 2016 Spending Shifts
| 24 |
|
This chart shows spending (R&D and MG&A) shifts from 2014 to 2016F. |
Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Capital Trends: 2012 – 2015
| 25 |
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*Forecast is based on current expectations given available information and is subject to change without notice. |
2015 forecast is based on the midpoint of Business Outlook as announced on October 13, 2015.
Source: Intel
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Capital Trends: 2012 – 2016
26 *Forecast is based on current expectations given available information and is subject to change without notice.
2015 forecast is based on the midpoint of Business Outlook as announced on October 13, 2015.
Source: Intel
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PC ASP and Cost Trends
27 PC ASPs and costs include both CPU and chipset and exclude netbook.
*Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Segmented Costs to Compete Across Segments
PC Costs*
*PC costs include both CPU and Chipset components and exclude netbook.
**Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
28
28
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Segmented Costs to Compete Across Segments
PC Costs*
*PC costs include both CPU and Chipset components and exclude netbook.
**Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
29
29
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Segmented Costs to Compete Across Segments
PC Costs*
*PC costs include both CPU and Chipset components and exclude netbook.
**Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
30
30
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Gross Margins
Gross Margin % Annual 2005-2016
*Forecast range is based on current expectations given available information and is subject to change without notice .
2015 forecast is based on the midpoint of Business Outlook as announced on October 13, 2015.
Source: Intel
31
31
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Gross margin Drivers
FY 2016 vs. FY 2015
10nm Start-up Costs
3D XPoint™ Ramp
Forecast is based on current expectations given available information and is subject to change without notice .
This gross margin walk is referencing Platform ASP and costs. Platform includes Client Computing Group,
| 32 |
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Data Center Group, and Internet of Things Group microprocessors and chipsets |
Source: Intel
ASPCosts
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Key Message: Driving Shareholder Return
Disciplined Capital Allocation
33
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Strong Cash Generation
Cash from Operations Free Cash Flow
| 34 |
|
*Forecast is based on current expectations given available information and is subject to change without notice. |
Source: Intel
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Bringing Down Net Cash Levels
Net cash is a non-GAAP measure which is used to assess our sources of liquidity and capital resources. See the non-GAAP reconciliation on the “Explanation of Non-GAAP Net Cash” slide.
Source: Intel
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Investing and Returning Cash to Shareholders
First: Invest in our business
Second: Dividend
Third: Share Repurchases
36
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Share
Repurchase
R&D
Capital
Expenditure
37 Source: Intel
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Announcing Dividend Increase Starting in Q1 ‘16
38 *Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
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Putting It All Together ~ 2016 Full Year Outlook
Note: 2016 fiscal year has 53 work weeks
Revenue Growth in the Mid-Single Digits
Gross Margin at 62% plus or minus a couple points
Spending (R&D + MG&A)* as a percent of revenue down 1/2 point
Capital Spending at $10B, plus or minus $500M (includes ~$1.5B for Memory)
Dividend at $1.04 per share ($0.08 per share increase) effective Q1 ‘16
| 39 |
|
Forecast is based on current expectations given available information and is subject to change without notice. |
*Spending includes estimated expenses for R&D and MG&A and excludes estimated amortization and restructuring expenses .
Source: Intel
|
|
One More thing…
40
|
|
Growth Portfolio ~ The Revenue Mix
41 *Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
|
|
Napkin Math ~ The Growth Model
Assumes DCG grows mid-teens
Note: model assumes IOTG + Memory + Software at historical growth
|
|
Risk Factors
The statements in this presentation and other commentary that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company’s expectations. Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in business and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of Intel’s products, products used together with Intel products and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, which may result in restructuring and asset impairment charges. Intel’s results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice. Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. The amount, timing and execution of Intel’s stock repurchase program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows or changes in tax laws. Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation. Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property. Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. In addition, risks associated with our pending acquisition of Altera are described in the “Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by reference herein. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q, Form 10-K and earnings release.
43
|
|
investor meeting
2015 SANTA CLARA
|
|
EXPLANATION OF NON-GAAP NET CASH
The accompanying 2015 Investor Meeting materials contains references to non-GAAP financial measures of net cash, which is used by management when assessing our sources of liquidity and capital resources. We believe this non-GAAP financial measure is helpful to investors in understanding our capital structure and how we manage our resources. This non-GAAP financial measure should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
(In Millions) Sep 26, Dec 27, Dec 28, Dec 29, Dec 31, Dec 25,
2015 2014 2013 2012 2011 2010
GAAP CASH AND CASH EQUIVALENTS $ 7,065 $ 2,561 $ 5,674 $ 8,478 $ 5,065 $ 5,498
Short-term investments 7,119 2,430 5,972 3,999 5,181 11,294
Trading assets 6,659 9,063 8,441 5,685 4,591 5,093
Total cash investments $ 20,843 $ 14,054 $ 20,087 $ 18,162 $ 14,837 $ 21,885
Short-term debt (1,129) (1,596) (281) (312) (247) (38)
Net unsettled trade liabilities and other (200) (77) (113) (469) (30) (103)
Long-term debt (20,059) (12,059) (13,104) (13,070) (7,048) (2,059)
NON-GAAP NET CASH (excluding other longer term investments) $ (545) $ 322 $ 6,589 $ 4,311 $ 7,512 $ 19,685
GAAP OTHER LONG-TERM INVESTMENTS $ 1,829 $ 2,023 $ 1,473 $ 493 $ 889 $ 3,026
Loans receivable and other 1,191 1,335 1,270 1,065 1,082 1,015
Reverse repurchase agreements 2,650 450 400 50 ——
NON-GAAP OTHER LONGER TERM INVESTMENTS $ 5,670 $ 3,808 $ 3,143 $ 1,608 $ 1,971 $ 4,041
NON-GAAP NET CASH (including other longer term investments) $ 5,125 $ 4,130 $ 9,732 $ 5,919 $ 9,483 $ 23,726
Source: Intel
|
|
EXPLANATION OF NON-GAAP CONSTANT CURRENCY
The 2015 Investor Meeting commentary contained references to non-GAAP financial measures of aggregated “software and services operating segments” net revenue and operating income on a constant currency basis. Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the comparable period. We believe this non-GAAP financial measure is helpful to investors in understanding our operating results of the aggregated “software and services operating segments”. This non-GAAP financial measure should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
(In Millions) Dec 26, Dec 27,
2015* 2014
SOFTWARE & SERVICES OPERATING SEGMENTS
GAAP NET REVENUE $ 2,152 $ 2,216
Constant currency adjustment 162 -
NON-GAAP NET REVENUE, constant currency adjusted $ 2,314 $ 2,216
GAAP OPERATING INCOME $ 219 $ 81
Constant currency adjustment 76 -
NON-GAAP OPERATING INCOME, constant currency adjusted $ 295 $ 81
*Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
| Exhibit 99.4
|
investor meeting
2015 SANTA CLARA
Diane Bryant
Senior Vice President & General Manager
Data Center Group
|
|
| 2 |
|
Key Messages
Adoption of cloud computing growing and transforming all segments
Non-CPU products contribute meaningful growth
Fundamental growth drivers remain strong
*Forecast is based on current expectations given available information and is subject to change without notice
Source: Intel
|
|
| 3 |
|
Data Center Growth Forecast
*Forecast is based on current expectations given available information and is subject to change without notice
Source: Intel
CONTRIBUTION OF NON-CPU
GROWTH BY END-USER SEGMENT
2015-2019*
$B
CPU
NON-CPU
CPU
12% CAGR
DATA CENTER
15% CAGR
>20%
CAGR
COMMS SP
CLOUD SP
>20%
CAGR
GOVERNMENT,
ACADEMIA, SCIENCE
~20%
CAGR
ENTERPRISE IT
<5%
CAGR
|
|
| 4 |
|
Accelerated technology
adoption
TAM expansion
ASP uplift
Adoption of Cloud Computing Across All Segments
CLOUD COMPUTING GROWTH
ENTERPRISE
CLOUDS
HPC
CLOUDS
NETWORK
CLOUDS
100%
ENTERPRISE IT
COMMS SPS
CLOUD SPS
G.A.S.
**Forecast is based on current expectations given available information and is subject to change without notice
Source: Intel
|
|
| 5 |
|
Diversification of the Cloud Service Provider Market
1. Super 7= Alibaba, Amazon, Baidu, Facebook, Google, Microsoft, Tencent
2. Source: IDC: Worldwide SaaS and Cloud Software 2015-2019 Forecast and 2014 Vendor Shares, August 2015
3. Source: ‘14-15 YoYgrowth based on top 41 CSPs in each region. Technology Business Research, Public Cloud Benchmark 2Q15
2015 Revenue2
“AS A SERVICE” DYNAMICS
100%
10%
16%
74%
IaaS
SaaS
PaaS
Europe &
Middle East
57%
Asia
55%
Americas46%
GROWTH OUTSIDE U.S.
1H’15 YoYGrowth3
Cloud SP CPU Units
CLOUD SP GROWTH
Units
*Forecast is based on current expectations given available information and is subject to change without notice
Source: Intel
Next 50
~40% CAGR
Super 71
~30% CAGR
|
|
| 6 |
|
Cloud Service Provider Dynamics
SUPER 7 VALUE PERFORMANCE
| 5 |
|
have
custom
CPUs
| 5 |
|
are in the
Early Ship
Program
| 4 |
|
will
sample
FPGAs
in Q1’16
Broad
interest in
3D XPoint™
| 2 |
|
have
sampled
Silicon
Photonics
2015 Volume1
CONSUMER VS.BUSINESS
1.Source: Intel estimate
| 7 |
|
bought
higher
price point
SKUs
|
|
| 7 |
|
Cloud Enables new Enterprise Growth
ENABLING NEW BUSINESSES2
Improving first responder
safetythrough cloud
connected devices
Delivering an end-to-end
connected car lifestylethrough BMW Connected Drive
Other names and brands may be claimed as the property of others
PRIVATE CLOUD INVESTMENTS
2015-2016
Expected workload destination1
1.Source: 451 Research, Voice of the Enterprise Cloud Computing Advisory Report Q4 2014 Survey of 1200 Senior IT leaders / decision makers(N=370)
2.Source: Company reports
Making industrial analytics
applications easier to deploy
with Predix Cloud
Enabling precision farming
through cloud-based
analytics
|
|
| 8 |
|
Cloud Enables new Enterprise Growth
ENABLING NEW BUSINESSES2
Improving first responder
safetythrough cloud
connected devices
Delivering an end-to-end
connected car lifestylethrough BMW Connected Drive
Other names and brands may be claimed as the property of others
PRIVATE CLOUD INVESTMENTS
2015-2016
Expected workload destination1
1.Source: 451 Research, Voice of the Enterprise Cloud Computing Advisory Report Q4 2014 Survey of 1200 Senior IT leaders / decision makers(N=370)
2.Source: Company reports
Making industrial analytics
applications easier to deploy
with Predix Cloud
Enabling precision farming
through cloud-based
analytics
|
|
9
Network Moves to Cloud
VALUE TO SERVICE PROVIDERS
Other names and brands may be claimed as the property of others
NETWORK OPPORTUNITY1
1.Source: IHS, Company reports, Intel analysis
2.Source: Intel
3.Source: China Mobile CRAN whitepaperSource: IHS, company reports, Intel analysis
4.Source: Telefonica UNICA, http://saladeprensa.telefonica.com/documentos/UNICA__20140224.pdf
2014: $17B TAM
NFV DEPLOYED ON INTEL ARCHITECTURE
FPGA
ASIC
CPU
ASSP
Altera
Intel
~$1.2B
Growing at
~10
X
t
he market
5%
MSS
7%
MSS
9.5%
MSS
$
IA MSS2
97% reduction in time to deployment
of new services4
-Telefonica
50% OpEx& power reduction3
-China Mobile
*Forecast is based on current expectations given available information and is subject to change without notice
100%
|
|
10
Delivering New Products
INTEL SILICON PHOTONICS
Samples shipping
Longest reach at 2 km
Highest port density
>20% cost advantage
ONLY ON-DIE INTEGRATED LASER
INTEL OMNI-PATH ARCHITECTURE
1stproduction in December
10% performance advantage1
60% lower system power2
20% system cost savings3
LEADERSHIP VS. INFINIBANDEDR
1. Tests performed on Intel® Xeon® Processor E5-2697v3 dual-socket servers with 2133 MHz DDR4 memory. Intel® Turbo Boost Technology enabled and Intel® Hyper-Threading Technology disabled. Intel OPA: Open MPI 1.10.0 with PSM2. Pre-production Intel Corporation Device 24f0 –Series 100 HFI ASIC, Series 100 Edge
Switch –48 port. IOU Non-posted Prefetchdisabled in BIOS. EDR: Open MPI 1.8-mellanox released with hpcx-v1.3.336-icc-MLNX_OFED_LINUX-3.0-1.0.1-redhat6.6-x86_64.tbz. MellanoxEDR ConnectX-4 Single Port Rev 3 MCX455A HCA. MellanoxSB7700 -36 Port EDR Infinibandswitch. 17% claim: HPCC 1.4.3 Random
order ring latency. 16 nodes, 28 MPI ranks per node. 7% message rate claim: Ohio State Micro Benchmarks v. 4.4.1. osu_mbw_mr28 MPI ranks per node, 8 byte message.
2. Assumes 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of director switches and edge switches. Mellanoxpower data based on
MellanoxCS7500 Director Switch, MellanoxSB7700/SB7790 Edge switch, and MellanoxConnectX-4 VPI adapter card installation documentation posted on www.mellanox.com as of November 1, 2015. Intel OPA power databased on product briefs posted on www.intel.com as of November 16, 2015.
3. Assumes a 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of 648-port director switches and 36-port edge switches. Mellanoxcomponent pricing from www.kernelsoftware.com, with prices as of November 3, 2015. Compute node pricing based on Dell PowerEdgeR730 server from www.dell.com, with prices as of May 26, 2015. Intel® OPA pricing based on estimated reseller pricing based onprojected Intel MSRP pricing at time of launch.
4. Intel estimate
5. IDC, Intel estimate. Includes HPC deployments only.
6. Source: Gartner, IHS, Intel analysis
$1.6B TAM
20205
3D XPOINT™DIMMS
Sampling in 2016
4X memory capacity
1/2the cost of DRAM
NEW CLASS OF NON-VOLATILE MEMORY
$34B TAM
20206
Other names and brands may be claimed as the property of others
$5B TAM
20204
|
|
11
Delivering New Products
INTEL SILICON PHOTONICS
Samples shipping
Longest reach at 2 km
Highest port density
>20% cost advantage
ONLY ON-DIE INTEGRATED LASER
INTEL OMNI-PATH ARCHITECTURE
1stproduction in December
10% performance advantage1
60% lower system power2
20% system cost savings3
LEADERSHIP VS. INFINIBANDEDR
1. Tests performed on Intel® Xeon® Processor E5-2697v3 dual-socket servers with 2133 MHz DDR4 memory. Intel® Turbo Boost Technology enabled and Intel® Hyper-Threading Technology disabled. Intel OPA: Open MPI 1.10.0 with PSM2. Pre-production Intel Corporation Device 24f0 –Series 100 HFI ASIC, Series 100 Edge
Switch –48 port. IOU Non-posted Prefetchdisabled in BIOS. EDR: Open MPI 1.8-mellanox released with hpcx-v1.3.336-icc-MLNX_OFED_LINUX-3.0-1.0.1-redhat6.6-x86_64.tbz. MellanoxEDR ConnectX-4 Single Port Rev 3 MCX455A HCA. MellanoxSB7700 -36 Port EDR Infinibandswitch. 17% claim: HPCC 1.4.3 Random
order ring latency. 16 nodes, 28 MPI ranks per node. 7% message rate claim: Ohio State Micro Benchmarks v. 4.4.1. osu_mbw_mr28 MPI ranks per node, 8 byte message.
2. Assumes 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of director switches and edge switches. Mellanoxpower data based on
MellanoxCS7500 Director Switch, MellanoxSB7700/SB7790 Edge switch, and MellanoxConnectX-4 VPI adapter card installation documentation posted on www.mellanox.com as of November 1, 2015. Intel OPA power databased on product briefs posted on www.intel.com as of November 16, 2015.
3. Assumes a 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of 648-port director switches and 36-port edge switches. Mellanoxcomponent pricing from www.kernelsoftware.com, with prices as of November 3, 2015. Compute node pricing based on Dell PowerEdgeR730 server from www.dell.com, with prices as of May 26, 2015. Intel® OPA pricing based on estimated reseller pricing based onprojected Intel MSRP pricing at time of launch.
4. Intel estimate
5. IDC, Intel estimate. Includes HPC deployments only.
6. Source: Gartner, IHS, Intel analysis
$1.6B TAM
20205
3D XPOINT™DIMMS
Sampling in 2016
4X memory capacity
1/2the cost of DRAM
NEW CLASS OF NON-VOLATILE MEMORY
$34B TAM
20206
Other names and brands may be claimed as the property of others
$5B TAM
20204
|
|
12
Delivering New Products
INTEL SILICON PHOTONICS
Samples shipping
Longest reach at 2 km
Highest port density
>20% cost advantage
ONLY ON-DIE INTEGRATED LASER
INTEL OMNI-PATH ARCHITECTURE
1stproduction in December
10% performance advantage1
60% lower system power2
20% system cost savings3
LEADERSHIP VS. INFINIBANDEDR
1. Tests performed on Intel® Xeon® Processor E5-2697v3 dual-socket servers with 2133 MHz DDR4 memory. Intel® Turbo Boost Technology enabled and Intel® Hyper-Threading Technology disabled. Intel OPA: Open MPI 1.10.0 with PSM2. Pre-production Intel Corporation Device 24f0 –Series 100 HFI ASIC, Series 100 Edge
Switch –48 port. IOU Non-posted Prefetchdisabled in BIOS. EDR: Open MPI 1.8-mellanox released with hpcx-v1.3.336-icc-MLNX_OFED_LINUX-3.0-1.0.1-redhat6.6-x86_64.tbz. MellanoxEDR ConnectX-4 Single Port Rev 3 MCX455A HCA. MellanoxSB7700 -36 Port EDR Infinibandswitch. 17% claim: HPCC 1.4.3 Random
order ring latency. 16 nodes, 28 MPI ranks per node. 7% message rate claim: Ohio State Micro Benchmarks v. 4.4.1. osu_mbw_mr28 MPI ranks per node, 8 byte message.
2. Assumes 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of director switches and edge switches. Mellanoxpower data based on
MellanoxCS7500 Director Switch, MellanoxSB7700/SB7790 Edge switch, and MellanoxConnectX-4 VPI adapter card installation documentation posted on www.mellanox.com as of November 1, 2015. Intel OPA power databased on product briefs posted on www.intel.com as of November 16, 2015.
3. Assumes a 750-node cluster, and number of switch chips required is based on a full bisectional bandwidth (FBB) Fat-Tree configuration. Intel® OPA uses one fully-populated 768-port director switch, and MellanoxEDR solution uses a combination of 648-port director switches and 36-port edge switches. Mellanoxcomponent pricing from www.kernelsoftware.com, with prices as of November 3, 2015. Compute node pricing based on Dell PowerEdgeR730 server from www.dell.com, with prices as of May 26, 2015. Intel® OPA pricing based on estimated reseller pricing based onprojected Intel MSRP pricing at time of launch.
4. Intel estimate
5. IDC, Intel estimate. Includes HPC deployments only.
6. Source: Gartner, IHS, Intel analysis
$1.6B TAM
20205
3D XPOINT™DIMMS
Sampling in 2016
4X memory capacity
1/2the cost of DRAM
NEW CLASS OF NON-VOLATILE MEMORY
$34B TAM
20206
Other names and brands may be claimed as the property of others
$5B TAM
20204
|
|
13
Summary
Adoption of cloud computing growing and
transforming all segments
Non-CPU products contribute meaningful
growth
Fundamental growth drivers remain strong
GROWTH BY END-USER SEGMENT
2015-2019*
>20%
CAGR
COMMS SP
CLOUD SP
>20%
CAGR
GOVERNMENT,
ACADEMIA, SCIENCE
~20%
CAGR
ENTERPRISE IT
<5%
CAGR
*Forecast is based on current expectations given available information and is subject to change without notice
Source: Intel
|
|
investor meeting
2015 SANTA CLARA
|
|
Risk Factors
The statements in this presentation and other commentary that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company’s expectations. Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in business and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of Intel’s products, products used together with Intel products and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, which may result in restructuring and asset impairment charges. Intel’s results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice. Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. The amount, timing and execution of Intel’s stock repurchase program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows or changes in tax laws. Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation. Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property. Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. In addition, risks associated with our pending acquisition of Altera are described in the “Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by reference herein. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q, Form 10-K and earnings release.
| Exhibit 99.5
|
INVESTOR MEETING
2015 SANTA CLARA
Kirk Skaugen
Senior Vice President & General Manager,
Client Computing Group
|
|
CLIENT COMPUTING SUMMARY
PC Stabilizing With Unprecedented Innovation
Segmentation, Integration & IP Reuse Maximizing Revenue & Margin
Growing at Market in Tablets, Expanding Wireless, & Reducing Losses
2
|
|
CLIENT COMPUTING SUMMARY
PC Stabilizing With Unprecedented Innovation
Segmentation, Integration & IP Reuse Maximizing Revenue & Margin
Growing at Market in Tablets, Expanding Wireless, & Reducing Losses
3
|
|
PC Installed Base = Opportunity
~1B PCs
“Intel Unveils New Chip
~600M PCs “There has never been a Design It Says Will Bring
better time to buy a PC” More Than Speed”
Oct 29, 2015 Sept 2, 2015
Millions “Intel’s Skylake “The PC: Suddenly,
Will Power PCS Surprisingly Alive”
as Thin as Tablets” November 11, 2015
Sept 2, 2015
Source: Intel
* Other names and brands may be claimed as the property of others.
4
|
|
STRATEGY FOR PC STABILIZATION
Product & Form Factor New Segmentation Innovation User Experiences
Cortana
If it is Smart and Connected, it is Best with Intel
| * |
|
Other names and brands may be claimed as the property of others. |
| 5 |
|
|
|
INTEL’S BEST PROCESSOR EVER
6th Gen Intel® Core™ & First Xeon® for Mobile Workstation
6
|
|
INTEL’S BEST PROCESSOR EVER
6th Gen Intel® Core™ & First Xeon® for Mobile Workstation
UP TO UP TO UP TO Intel’s
2.5X 30X 3X MOST SECURE
FASTER 1 GRAPHICS 2 LONGER BATTERY 3
PERFORMANCE IMPROVEMENT LIFE Platform 4,5
1 Source: Intel Corporation. Based on SySmark 2014 scores comparing Intel® Core™ i5-6200U and Intel® Core™ i5-520UM. As compared to a 5 year old system. See Appendix for configurations
2 Source: Intel Corporation. Based on 3DMark Cloud Gate Gfx scores comparing Intel® Core™ i5-6200U and Intel® Core™ i5-520UM. As compared to a 5 year old system. See Appendix for configurations
3 Source: Intel Corporation. Based on local HD video playback score comparing Intel® Core™ i5-6200U and Intel® Core™ i5-520UM. As compared to a 5 year old system. See Appendix for configurations
4. No computer system can provide absolute security under all conditions. Built-in security features available on select Intel® processors may require additional software, hardware, services and/or an Internet connection. Results may vary depending upon configuration. Consult your system manufacturer for more details.
5. Intel’s most secure platform is based upon new security features and technologies available on Intel® 6th Gen Core platforms.
*Other brands and names may be claimed as the property of others
Software and workloads used in performance tests may have been optimized for performance only on Intel microprocessors. Performance tests, such as SYSmark and MobileMark, are measured using specific computer systems, components, software, operations and functions. Any change to any of those factors may cause the results to vary. You should consult other information and performance tests to assist you in fully evaluating your contemplated purchases, including the performance of that product when combined with other products. For more complete information visit http://www.intel.com/performance
7
|
|
SEGMENTING THE MARKET NEW FORM FACTORS
2in1 Detachable
2in1 Convertible
NOTEBOOK Thin, Light Clamshell
g
Circa 2010 2015
Mobile
Workstation Gaming Tower
DESKTOP All In One
Portable All In One
Compute Traditional Stick Small Form Tower Mini Pc Factor Tower
* Other names and brands may be claimed as the property of others.
8
|
|
INNOVATION: 2 IN 1
1%
-7% -4%
-10% 1.5X 8-12 ~40%
MONTHS
NB Growth w/ 2in1 NB Growth w/o 2in1 PROJECTED EARLIER HAD CONSIDERED
GROWTH REFRESH OF A TABLET AS #1 ‘15-16 2 NOTEBOOK PC 1 ALTERNATIVE1
1. Source Intel
2. Forecast is based on current expectations given available information and is subject to change without notice
* Other names and brands may be claimed as the property of others.
9
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INNOVATION IN DESKTOP
26% 30%
GROWTH ‘15 – ‘16 2 GROWTH ‘15 – ‘16 2 12% 8 46%
MONTHS
GROWTH 2 REFRESHING PURCHASING ON ‘15 – ‘18 DESKTOP PC “WANT” VS. NEED 1 EARLIER 1
GAMIN COMPUTE STI MINI PC
in GROWTH Gaming in Mini GROWTH Form Factors in All in Ones GROWTH & Portable AIOs
1. Source Intel
2. Forecast is based on current expectations given available information and is subject to change without notice
* Other names and brands may be claimed as the property of others.
10
|
|
USER PAIN POINTS
Wires Passwords Legacy Interfaces
* Other names and brands may be claimed as the property of others.
11
|
|
NEW USER EXPERIENCES
Natural User No Wires No Passwords Interfaces
DO CKI NG
& DIS PL AY wireless DA TA
CHARGING
Cortana
Driving industry standards, system enabling & end to end experiences.
* Other names and brands may be claimed as the property of others.
12
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|
CLIENT COMPUTING SUMMARY
PC Stabilizing With Unprecedented Innovation
Segmentation, Integration & IP Reuse Maximizing Revenue & Margin
Growing at Market in Tablets, Expanding Wireless, & Reducing Losses
13
|
|
PC SEGMENTATION ACTIONS
Cost Integration Sell-up
Small Core Product
audio graphics touch
14nm
Imaging sensor security processing hub
MAINTAIN/GROW ASP up 4.5% from 20101
MSS up 10% from 20101 Core MIX > 70% an all time high1
1. Source Intel
14
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INCREASING SHARE OF WALLET THROUGH INNOVATION
Discrete to Integrated
Wi-Fi™ Intel® Optane™ Thunderbolt™ 3 Iris™ Graphics
& WiGIG™ SSDs
6X DESIGNS ON PC WI-FI 1 ~70% GRAPHICS SHARE 2
#1 BY VOLUME COMING 2016 6TH GEN CORE MOBILE 2.5X WIGIG DESIGNS YOY 2X DESIGNS YOY
1. ABI Research
2 Q3’15 Mercury Research
* Other names and brands may be claimed as the property of others.
15
|
|
CLIENT COMPUTING SUMMARY
PC Stabilizing With Unprecedented Innovation
Segmentation, Integration & IP Reuse Maximizing Revenue & Margin
Growing at Market in Tablets, Expanding Wireless, & Reducing Losses
16
|
|
MOBILE & WIRELESS: BUILDING TO A 5G FUTURE
Wireless IP Competing New SoC Platforms & Ecosystem Leadership Development in Mobile Devices Partnerships
5G
IMPROVING MOBILE PROFITABILITY IN CCG
~$800M IN 2016
* Other names and brands may be claimed as the property of others.
17
|
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CCG 2016 EXPECTATIONS
PC Market projection: Slightly down, vs. 3rd party projections of ~flat
CCG Revenue: Flat to low single-digit growth CCG Op Profit: Growth in the low double digits
Note: 2016 fiscal year has 53 work weeks.
Forecast is based on current expectations given available information and is subject to change without notice.
Source: Intel
18
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|
CLIENT COMPUTING SUMMARY
Stabilizing PC With Unprecedented Innovation
Segmentation, Integration & IP Reuse Maximizing Revenue & Margin
Growing at Market in Tablets, Expanding Wireless, & Reducing Losses
19
|
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INVESTOR MEETING
2015 SANTA CLARA
|
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RISK FACTORS
The above statements and any others in this document that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel’s actual results, and variances from Intel’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially from the company’s expectations. Demand for Intel’s products is highly variable and could differ from expectations due to factors including changes in business and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of Intel’s products, products used together with Intel products and competitors’ products; competitive and pricing pressures, including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Intel’s gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields. Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including marketing expenses, and Intel’s ability to respond quickly to technological developments and to introduce new products or incorporate new features into existing products, which may result in restructuring and asset impairment charges. Intel’s results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which could be changed without prior notice. Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in the short term. The amount, timing and execution of Intel’s stock repurchase program could be affected by changes in Intel’s priorities for the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel’s cash flows or changes in tax laws. Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and reputation. Intel’s results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel’s ability to design its products, or requiring other remedies such as compulsory licensing of intellectual property. Intel’s results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. In addition, risks associated with our pending acquisition of Altera are described in the “Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by reference herein. A detailed discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including the company’s most recent reports on Form 10-Q, Form 10-K and earnings release.