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.

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.

Strategic Challenges & Issues Inventory Management Equity Investments: Mark-to-Market Strategic Partnerships: Duopoly? Flexible Manufacturing Capabilities Product Lifecycles Health of Gross Margins Rate of Innovation: Tick Tock Cadence Current Litigation 2008 Q4: Significant Challenges

Asia-Pacific

51%Americas

20%

Europe19%

Japan10%

Geographic Revenue

Presented by Brad Hillwig Intel Corporation

Financial Analysis

Intel Corp. Ratio Analysis

2008 2007 2006

Current Ratio 2.5 2.7 2.1

Quick Ratio 2.1 2.3 1.6

Inventory Turnover 4.5 5.5 4

Average Collection Period 16.6 24.5 27.9

Average Payment Period 52.1 46.8 47.9

Fixed Asset Turnover 2.14 2.3 2

Total Asset Turnover 0.74 0.69 0.73

Debt Ratio 23% 23% 24%

Debt-to-equity Ratio 5% 5% 5%

Times interest earned Ratio 18.3 10.4 4.7

Gross Profit Margin 55% 52% 51%

Operating Profit Margin 24% 21% 16%

Net Profit Margin 14% 18% 14%

Return on Total Assets 10% 13% 10%

Return on Common Equity 14% 16% 14%

Price/Earnings Ratio 15.27 22.5 23.59

Market/Book Ratio 2.06 3.62 3.19

EPS 0.93 1.2 0.87

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.

Q4 at a Glance (in millions)

2008 % Change 2007

Net Revenue $8,226 -23% $ 10,712

Gross Margin $4,369 -30% $ 6,226

Net Income $234 -90% $ 2,271

Mark-to-Market: In 2008 Q4 Intel invested $1.0 billion dollars in Clearwire Corporation, which merged its WIMAX business with Sprint Nextel Corporation. In this same quarter, Intel re-corded a $768 million dollar impairment charge related to this investment, due to the fair value being significantly lower than the cost basis. This arrangement also led to an additional $176 million dollar write-down in Q4. Is the mark-to-market practice good or bad? Does Intel’s Equity Investment strategy carry too much risk?

At the end of 2008 total inventories were $3,744 billion, up 11% from $3,370 billion in 2007. Given Intel’s narrow product lifecycles, what type of effect could this have on the company’s operations?

Given today’s economy, what challenges are ahead for Intel’s pursuit of growth?

Stock Price (4/10): $15.98 52-week high/low: $25.29/$12.50

Presented by Brad Hillwig Intel Corporation

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%