INDUSTRY

SANTA CLARA, CA -- Intel Corporation today announced fourth-quarter revenue of $7.0 billion, up 7 percent sequentially and down 20 percent year over year. For the fourth quarter, net income excluding acquisition-related costs was $998 million, up 52 percent sequentially and down 62 percent year over year. Fourth-quarter earnings excluding acquisition-related costs were $0.15 per share, up 50 percent from $0.10 in the third quarter and down 61 percent from $0.38 in the fourth quarter of 2000. Including acquisition-related costs in accordance with generally accepted accounting principles (GAAP), fourth-quarter net income was $504 million, up 375 percent sequentially and down 77 percent year over year. Earnings per share were $0.07, up 250 percent from $0.02 in the third quarter and down 78 percent from $0.32 in the fourth quarter of 2000. Acquisition-related costs in the fourth quarter consisted of $550 million of amortization of goodwill and other acquisition-related intangibles and costs. "2001 was a terrible year for our industry," said Craig R. Barrett, president and chief executive officer. "Despite this backdrop, we introduced exciting new products, including the industry's first 2.0 GHz processor, gained market segment share, and earned over $1 billion. We also rapidly ramped our industry-leading 0.13-micron process technology and began production on 300mm wafers. "While 2001 was difficult for Intel, I can't imagine changing places with any other company on the planet," Barrett said. "Our 2001 R&D and manufacturing investments position us to grow faster than the industry when the high tech recovery occurs." During the quarter, the company paid its quarterly cash dividend of $0.02 per share. The dividend was paid on Dec. 1 to stockholders of record on Nov. 7. Intel has paid a regular quarterly cash dividend for more than nine years. Also during the quarter, the company repurchased a total of 35 million shares of common stock at a cost of $1.0 billion under an ongoing program. For the year, Intel repurchased approximately 133 million shares at a cost of approximately $4.0 billion. Since the program began in 1990, the company has repurchased approximately 1.5 billion shares at a total cost of approximately $26 billion. As of the beginning of 2002, Intel is adopting FASB rules 141 and 142 concerning accounting for business combinations and goodwill. The company performed the initial test for impairment of goodwill at the time of adoption and determined that there was no impairment. The effect of the goodwill non-amortization provisions of FAS 141 and 142 is expected to result in a substantial reduction in the difference between the company's earnings excluding acquisition-related costs and the company's earnings on a GAAP basis. Intel expects to continue to report earnings excluding acquisition-related costs for a period of time to provide a consistent basis for financial comparisons. Full-Year Results Revenue for 2001 was $26.5 billion, down 21 percent from $33.7 billion in 2000. Net income excluding acquisition-related costs was $3.6 billion, down 70 percent from $12.1 billion in 2000. Earnings excluding acquisition-related costs were $0.52 per share, down 70 percent from $1.73 in 2000. Including acquisition-related costs in accordance with GAAP, net income in 2001 was $1.3 billion, down 88 percent from $10.5 billion in 2000. For 2001, earnings per share were $0.19, down 87 percent from $1.51 in 2000. Acquisition-related costs in 2001 consisted of $198 million in one-time charges for purchased in-process research and development and $2.3 billion in amortization of goodwill and other acquisition-related intangibles and costs.