Intel Reports First-Quarter 2018 Financial Results

Mark to market on marketable equity securities: We exclude gains and losses resulting from mark to market adjustments of our marketable equity securities when calculating certain non-GAAP measures as we do not believe the volatility generally associated with these securities correlates to our core operational performance. Consequently, our non-GAAP net income and earnings per share figures exclude these impacts to facilitate an evaluation of our current performance and comparisons to our past performance.

Gains or losses from divestiture: We exclude gains or losses resulting from the divestiture of Intel Security Group in the second quarter of 2017 and planned divestiture of Wind River in 2018. We have excluded these gains and related tax impacts for purposes of calculating certain non-GAAP measures. We believe making these adjustments facilitates a better evaluation of our current operating performance and comparisons to past operating results.

Free cash flow: We reference a non-GAAP financial measure of free cash flow, which is used by management when assessing our sources of liquidity, capital resources, and operating performance. We believe this non-GAAP financial measure is helpful to investors in understanding our capital structure and provides an additional means to reflect the cash flow trends of our business.

SUPPLEMENTAL RECONCILIATIONS OF GAAP OUTLOOK TO NON-GAAP OUTLOOK

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measures disclosed by the company have limitations and should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP, and the financial outlook prepared in accordance with GAAP and the reconciliations from this Business Outlook should be carefully evaluated. Please refer to "Explanation of Non- GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

 

 

Q2 2018 Outlook

Full-Year 2018

GAAP OPERATING MARGIN

28 % approximately

29% approximately

Amortization of acquisition-related intangibles

2 %

2%

NON-GAAP OPERATING MARGIN

30 % approximately

31% approximately

GAAP TAX RATE

14 % approximately

13% approximately

Adjustment for the planned divestiture of Wind River

(1)%

—%

NON-GAAP TAX RATE

13 % approximately

13% approximately

GAAP EARNINGS PER SHARE

$ 0.85 +/- 5 cents

$ 3.79 +/- 5%

Amortization of acquisition-related intangibles

0.07

0.27

(Gains) losses from divestiture

(0.08)

(0.08)

Mark to market on marketable equity securities

(0.13)

Income tax effect

0.01

NON-GAAP EARNINGS PER SHARE

$ 0.85 +/- 5 cents

$ 3.85 +/- 5%

 

(In Billions)

 

 

Full-Year 2018

GAAP CASH FROM OPERATIONS (In Billions)

 

$ 29.0

Additions to property, plant and equipment

 

(14.5)

FREE CASH FLOW

 

$ 14.5 +/- $500 million

The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustment made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.




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