Mission Statement

Delight our customers, employees, and shareholders by relentlessly delivering platform and
technology advancements that become essential to the way we work and live.

Company History & Overview

Intel Corporation was founded in 1968 by Robert Noyce and Gordon Moore. In 1969, when
Busicom asked Intel to make twelve special purpose chips for a programmable calculator, Intel
engineer Ted Hoff and others designed a single-chip, general logic device that contained 2,300
MOS transistors and incorporated all twelve computing functions. The revolutionary thumb-
nail-sized design led to the Intel 4004, the world’s first single-chip microprocessor. The ad-
vancement was a major progression from previous computers, which often ran on thousands
of vacuum tubes and filled entire rooms. Today, Intel is the world’s largest semiconductor
chipmaker based upon revenue and unit shipments. In 2008, Intel owned upwards of 80% of
the microprocessors shipped and has continued to drive the semiconductor chip market with
its predictable innovation cycles.

Products & Operating Segments

Digital Enterprise Group—55% of 2008 total sales

Includes products that are incorporated into desktop computers, enterprise computing servers
and workstations, a broad range of embedded applications, and other products that help
make up the infrastructure of the Internet. DEG serves the broad desktop computing market,
including consumer and enterprise desktops, as well as the enterprise and embedded commu-
nications market segments. Microprocessor revenues within DEG: 43%

The Mobility Group—42% of 2008 total sales

Makes microprocessors and related chipsets designed for the notebook and netbook market
segments, wireless connectivity products, and energy-efficient products designed for the ultra
-mobile PC market segments. Primary products include Intel’s Centrino and Centrino 2 mobile
platforms. Microprocessor revenues within MG: 42%

The Other Products Segment—3% of 2008 total sales

Includes the NAND Solution Group, which offers NAND flash memory primarily used in mem-
ory cards and system-level applications, the Digital Home Group and the Digital Health Group.

Strategic Challenges & Issues Geographic Revenue

 Inventory Management
 Equity Investments: Mark-to-Market Japan
 Strategic Partnerships: Duopoly? 10%
 Flexible Manufacturing Capabilities Europe
19% Asia-
 Product Lifecycles Pacific
 Health of Gross Margins Americas
51%

 Rate of Innovation: Tick Tock Cadence 20%

 Current Litigation
 2008 Q4: Significant Challenges

Presented by Brad Hillwig Intel Corporation

Financial Analysis Stock Price (4/10): $15.98 52-week high/low: $25.29/$12.50
Intel Corp Income Statement
2008 Com-Size % Change 2007 Com-Size % Change 2006 Com-Size
Net Revenue $37,586 $37,586 -2.0% $38,334 $38,334 8.3% $35,382 $35,382
Cost of Sales 16,742 44.5% -9.2% 18,430 48.1% 7.4% 17,164 48.5%
Gross Margin 20,844 55.5% 4.7% 19,904 51.9% 9.3% 18,218 51.5%
Research & Development 5,722 15.2% -0.6% 5,755 15.0% -0.5% 5,783 16.3%
Marketing, General & Admin. 5,458 14.5% 0.8% 5,417 14.1% -11.7% 6,138 17.3%
Restructuring & Asset Impairment 710 1.9% 37.6% 516 1.3% -7.0% 555 1.6%
Operating Expenses 11,890 31.6% 1.7% 11,688 30.5% -7.0% 12,566 35.5%
Operating Income 8,954 23.8% 9.0% 8,216 21.4% 45.4% 5,652 16.0%
Gains (loses) on equity investments (1,380) -3.7% -46100.0% 3 0.0% 50.0% 2 0.0%
Gains (loses) on other equity investments (376) -1.0% -344.2% 154 0.4% -27.4% 212 0.6%
Interest and other, net 488 1.3% -38.5% 793 2.1% -34.0% 1,202 3.4%
Income before taxes 7,686 20.4% -16.1% 9,166 23.9% 29.7% 7,068 20.0%
Provision for taxes 2,394 6.4% 9.3% 2,190 5.7% 8.2% 2,024 5.7%
Net Income 5,292 14.1% -24.1% 6,976 18.2% -1.3% 7,068 20.0%

Intel Corp. Ratio Analysis Q4 at a Glance (in millions)

2008 2007 2006 2008 % Change 2007
Current Ratio 2.5 2.7 2.1 Net Revenue $8,226 -23% $ 10,712
Quick Ratio 2.1 2.3 1.6 Gross Margin $4,369 -30% $ 6,226
Inventory Turnover 4.5 5.5 4 Net Income $234 -90% $ 2,271
Average Collection Period 16.6 24.5 27.9
Average Payment Period 52.1 46.8 47.9  Mark-to-Market: In 2008 Q4 Intel invested $1.0 billion dollars
Fixed Asset Turnover 2.14 2.3 2 in Clearwire Corporation, which merged its WIMAX business
with Sprint Nextel Corporation. In this same quarter, Intel re-
Total Asset Turnover 0.74 0.69 0.73
corded a $768 million dollar impairment charge related to this
Debt Ratio 23% 23% 24% investment, due to the fair value being significantly lower than
Debt-to-equity Ratio 5% 5% 5% the cost basis. This arrangement also led to an additional $176
Times interest earned Ratio 18.3 10.4 4.7 million dollar write-down in Q4. Is the mark-to-market practice
good or bad? Does Intel’s Equity Investment strategy carry too
Gross Profit Margin 55% 52% 51%
much risk?
Operating Profit Margin 24% 21% 16%
Net Profit Margin 14% 18% 14%  At the end of 2008 total inventories were $3,744 billion, up
Return on Total Assets 10% 13% 10% 11% from $3,370 billion in 2007. Given Intel’s narrow product
Return on Common Equity 14% 16% 14% lifecycles, what type of effect could this have on the company’s
operations?
Price/Earnings Ratio 15.27 22.5 23.59
Market/Book Ratio 2.06 3.62 3.19  Given today’s economy, what challenges are ahead for Intel’s
EPS 0.93 1.2 0.87 pursuit of growth?

Litigation

 Intel is involved in an antitrust lawsuit filed by Advanced Micro Devices (AMD), its chief competitor. The
suit alleges that Intel and its Japanese subsidiary have improperly used exclusive discounts and price re-
bates on microprocessors to distributor and manufacturer customers, interfering with AMD’s ability to
sell and market its products. Essentially, the suit accuses Intel of forcing major customers into deals that
require them to cease business with AMD. The suit has been active since 2005.

Presented by Brad Hillwig Intel Corporation