AMD Reports 2015 Third Quarter Results

1. In this earnings press release, in addition to GAAP financial results,   
   AMD has provided non-GAAP financial measures including non-GAAP gross    
   margin, non-GAAP operating income (loss), non-GAAP operating expenses,   
   non-GAAP research and development and marketing, general and             
   administrative expenses, non-GAAP net income (loss) and non-GAAP earnings
   (loss) per share. These non-GAAP financial measures reflect certain      
   adjustments as presented in the tables in this earnings press release.   
   AMD also provided adjusted EBITDA and non-GAAP free cash flow as         
   supplemental measures of its performance. These items are defined in the 
   footnotes to the selected corporate data tables provided at the end of   
   this earnings press release. AMD is providing these financial measures   
   because it believes this non-GAAP presentation makes it easier for       
   investors to compare its operating results for current and historical    
   periods and also because AMD believes it assists investors in comparing  
   AMD's performance across reporting periods on a consistent basis by      
   excluding items that it does not believe are indicative of its core      
   operating performance and for the other reasons described in the CFO     
   Commentary.                                                              
                                                                            
2. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results.     
   3DMark FireStrike at 3840x2180, Ultra preset, 0xMSAA, 0XAF is used to    
   simulate GPU performance; the Radeon™ R9 Nano on the system using the    
   Intel® Core™ i7-5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz       
   memory, Windows 10 64-bit, and AMD Catalyst Driver 15.201 scored 3411    
   while the Sapphire Radeon™ R9 380 Mini ITX on the same system and AMD    
   Catalyst Driver 15.20 scored 1551, the GTX 970 Mini ITX on the same      
   system and GeForce Driver 355.60 WHQL scored 2593, the GTX 960 Mini ITX  
   on the same system and GeForce Driver scored 1297. GRDT-73               
                                                                            
3. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results. Far 
   Cry 4 at 3840x2180, Ultra High preset, SMAA, 0XAF is used to simulate GPU
   performance; the Radeon™ R9 Nano on the system using the Intel® Core™ i7-
   5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz memory, Windows 10 64-
   bit, and AMD Catalyst Driver 15.201 scored 37.966 fps while the Radeon™  
   R9 290X on the same system and AMD Catalyst Driver 15.20 scored 27.207   
   fps GRDT-69                                                              
                                                                            
4. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results. Far 
   Cry 4 at 3840x2180, Ultra High preset, SMAA, 0XAF is used to simulate GPU
   performance; the Radeon™ R9 Nano on the system using the Intel® Core™ i7-
   5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz memory, Windows 10 64-
   bit, and AMD Catalyst Driver 15.201 scored 37.966 fps while the Radeon™  
   R9 290X on the same system and AMD Catalyst Driver 15.20 scored 27.207   
   fps GRDT-69                                                              
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                                            
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                              ------------------------------    --------------------  
                                              September    June  27,    September    September    September  
                                                26,  2015        2015          27,  2014      26,  2015      27,  2014  
                                              ---------    --------    ---------    ---------    ---------  
Net  revenue                        $      1,061    $        942    $      1,429    $      3,033    $      4,267  
Cost  of  sales                                822              710                935            2,236            2,788  
                                              ---------    --------    ---------    ---------    ---------  
Gross  margin                                  239              232                494                797            1,479  
Gross  margin  %                                23%              25%                35%                26%                35%
Research  and                                                                                                                                
  development                                  241              235                278                718                834  
Marketing,  general  and                                                                                                            
  administrative                            108              134                150                373                460  
Amortization  of                                                                                                                          
  acquired  intangible                                                                                                                
  assets                                                -                  -                    3                    3                  10  
Restructuring  and  other                                                                                                          
  special  charges,  net                  48                  -                    -                135                    -  
                                              ---------    --------    ---------    ---------    ---------  
Operating  income  (loss)          (158)          (137)                63              (432)              175  
Interest  expense                          (39)            (40)              (43)            (119)            (136)
Other  expense,  net                          -                (3)                (1)                (3)              (70)
                                              ---------    --------    ---------    ---------    ---------  
Income  (loss)  before                                                                                                                
  income  taxes                              (197)          (180)                19              (554)              (31)
Provision  for  income                                                                                                                
  taxes                                                  -                  1                    2                    4                    8  
                                              ---------    --------    ---------    ---------    ---------  
Net  income  (loss)            $        (197)  $      (181)  $            17    $        (558)  $          (39)
Net  income  (loss)  per                                                                                                              
  share                                                                                                                                            
    Basic                                $      (0.25)  $    (0.23)  $        0.02    $      (0.72)  $      (0.05)
    Diluted                            $      (0.25)  $    (0.23)  $        0.02    $      (0.72)  $      (0.05)
                                              ---------    --------    ---------    ---------    ---------  
Shares  used  in  per                                                                                                                    
  share  calculation                                                                                                                    
    Basic                                            785              778                770                780                765  
    Diluted                                        785              778                785                780                765  
                                              ---------    --------    ---------    ---------    ---------  
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  STATEMENTS  OF  COMPREHENSIVE  INCOME  (LOSS)                        
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                              ------------------------------    --------------------  
                                              September    June  27,    September    September    September  
                                                26,  2015        2015          27,  2014      26,  2015      27,  2014  
                                              ---------    --------    ---------    ---------    ---------  
Total  comprehensive                                                                                                                  
  income  (loss)                  $        (207)  $      (174)  $            15    $        (568)  $          (38)
                                              ---------    --------    ---------    ---------    ---------  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  BALANCE  SHEETS                                                                              
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                                    -----------------------------------------  
                                                                    September  26,        June  27,        December  27,  
                                                                              2015                    2015                    2014          
                                                                    -------------  -------------  -------------  
Assets                                                                                                                                            
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents              $                  755  $                  829  $                  805  
    Marketable  securities                                              -                          -                      235  
    Accounts  receivable,  net                                    648                      687                      818  
    Inventories,  net                                                    761                      799                      685  
    Prepayments  to  GLOBALFOUNDRIES                          20                        19                      113  
    Prepaid  expenses                                                      63                        54                        32  
    Other  current  assets                                            182                        63                        48  
                                                                                                                                                        
                                                                    -------------  -------------  -------------  
        Total  current  assets                                    2,429                  2,451                  2,736  
Property,  plant  and  equipment,  net                    194                      289                      302  
Acquisition  related  intangible                                                                                            
  assets,  net                                                                    -                          -                        65  
Goodwill                                                                        320                      320                      320  
Other  assets                                                                286                      321                      344  
                                                                    -------------  -------------  -------------  
Total  Assets                                            $              3,229  $              3,381  $              3,767  
                                                                    =============  =============  =============  
                                                                                                                                                        
Liabilities  and  Stockholders'                                                                                              
  Equity  (Deficit)                                                                                                                      
Current  liabilities:                                                                                                                
    Short-term  debt                                  $                  230  $                  235  $                  177  
    Accounts  payable                                                    388                      454                      415  
    Payable  to  GLOBALFOUNDRIES                                226                      197                      218  
    Accrued  liabilities                                              408                      432                      518  
    Other  current  liabilities                                  137                        30                        40  
    Deferred  income  on  shipments  to                                                                                      
      distributors                                                            60                        51                        72  
                                                                                                                                                        
                                                                    -------------  -------------  -------------  
        Total  current  liabilities                          1,449                  1,399                  1,440  
Long-term  debt                                                        2,030                  2,034                  2,035  
Other  long-term  liabilities                                    86                        89                      105  
                                                                                                                                                        
Stockholders'  equity  (deficit):                                                                                          
    Capital  stock:                                                                                                                        
        Common  stock,  par  value                                      8                          8                          8  
        Additional  paid-in  capital                        6,997                  6,984                  6,949  
        Treasury  stock,  at  cost                                (122)                  (121)                  (119)
    Accumulated  deficit                                        (7,204)              (7,007)              (6,646)
    Accumulated  other  comprehensive                                                                                      
      loss                                                                          (15)                      (5)                      (5)
                                                                                                                                                        
                                                                    -------------  -------------  -------------  
        Total  Stockholders'  equity                                                                                            
          (deficit)                                                          (336)                  (141)                    187  
                                                                    -------------  -------------  -------------  
Total  Liabilities  and                                                                                                              
  Stockholders'  Equity  (Deficit)      $              3,229  $              3,381  $              3,767  
                                                                    =============  =============  =============  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
CONDENSED  CONSOLIDATED  STATEMENT  OF  CASH  FLOWS                                                            
(Millions)                                                                                                                                    
                                                                                                                                                        
                                                                                                Three  Months      Nine  Months    
                                                                                                      Ended                    Ended          
                                                                                              -------------    -------------  
                                                                                              September  26,    September  26,  
                                                                                                        2015                      2015          
                                                                                              -------------    -------------  
                                                                                                                                                        
Cash  flows  from  operating  activities:                                                                              
    Net  Loss                                                                          $                (197)  $                (558)
    Adjustments  to  reconcile  net  loss  to  net                                                                    
      cash  used  in  operating  activities:                                                                              
        Depreciation  and  amortization                                                  42                        133  
        Stock-based  compensation  expense                                            13                          47  
        Non-cash  interest  expense                                                            2                            8  
        Restructuring  and  other  special  charges,                                                                
          net                                                                                                    11                          83  
        Other                                                                                                    6                            7  
    Changes  in  operating  assets  and  liabilities:                                                            
        Accounts  receivable                                                                      35                        164  
        Inventories                                                                                      24                        (93)
        Prepayments  to  GLOBALFOUNDRIES                                                  3                          97  
        Prepaid  expenses  and  other  assets                                        (40)                    (113)
        Accounts  payable,  accrued  liabilities  and                                                              
          other                                                                                                12                        (74)
        Payable  to  GLOBALFOUNDRIES                                                        30                            9  
                                                                                              -------------    -------------  
Net  cash  used  in  operating  activities                    $                  (59)  $                (290)
                                                                                              -------------    -------------  
                                                                                                                                                        
Cash  flows  from  investing  activities:                                                                              
    Purchases  of  available-for-sale  securities                              -                      (227)
    Purchases  of  property,  plant  and  equipment                          (25)                      (64)
    Proceeds  from  maturities  of  available-for-                                                                
      sale  securities                                                                                  -                        462  
    Proceeds  from  sale  of  property,  plant  and                                                                  
      equipment                                                                                              8                            8  
                                                                                              -------------    -------------  
Net  cash  provided  by  (used  in)  investing                                                                        
  activities                                                                        $                  (17)  $                  179  
                                                                                              -------------    -------------  
                                                                                                                                                        
Cash  flows  from  financing  activities:                                                                              
    Net  proceeds  from  grants                                                                  4                            8  
    Proceeds  from  issuance  of  common  stock                                      -                            1  
    Proceeds  from  borrowings,  net                                                        -                        100  
    Repayments  of  long-term  debt  and  capital                                                                    
      lease  obligations                                                                              -                        (44)
    Other                                                                                                      (2)                        (4)
                                                                                              -------------    -------------  
Net  cash  provided  by  financing  activities            $                      2    $                    61  
                                                                                              -------------    -------------  
Net  decrease  in  cash  and  cash  equivalents                                (74)                      (50)
                                                                                              -------------    -------------  
Cash  and  cash  equivalents  at  beginning  of                                                                      
  period                                                                                $                  829    $                  805  
                                                                                              -------------    -------------  
Cash  and  cash  equivalents  at  end  of  period          $                  755    $                  755  
                                                                                              -------------    -------------  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
ADVANCED  MICRO  DEVICES,  INC.                                                                                                
SELECTED  CORPORATE  DATA                                                                                                          
(Millions  except  headcount)                                                                                                  
                                                                                                                                                        
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                              ------------------------------    --------------------  
Segment  and  Category      September    June  27,    September    September    September  
  Information                        26,  2015        2015          27,  2014      26,  2015      27,  2014  
                                              ---------    --------    ---------    ---------    ---------  
                                                                                                                                                        
    Computing  and                                                                                                                          
      Graphics  (1)                                                                                                                          
        Net  revenue                $          424    $        379    $          781    $      1,335    $      2,470  
        Operating  loss          $        (181)  $      (147)  $          (17)  $        (403)  $          (20)
                                                                                                                                                        
    Enterprise,  Embedded                                                                                                            
      and  Semi-Custom  (2)                                                                                                            
        Net  revenue                $          637    $        563                648    $      1,698    $      1,797  
        Operating  income      $            84    $          27    $          108    $          156    $          290  
                                                                                                                                                        
    All  Other  (3)                                                                                                                          
        Net  revenue                                -                  -                    -                    -                    -  
        Operating  loss          $          (61)  $        (17)              (28)  $        (185)              (95)
                                                                                                                                                        
    Total                                                                                                                                          
        Net  revenue                $      1,061    $        942    $      1,429    $      3,033    $      4,267  
        Operating  income                                                                                                                
          (loss)                        $        (158)  $      (137)  $            63    $        (432)  $          175  
                                                                                                                                                        
                                              ---------    --------    ---------    ---------    ---------  
                                                                                                                                                        
Other  Data                                                                                                                                    
                                                                                                                                                        
    Depreciation  and                                                                                                                    
      amortization,                                                                                                                        
      excluding                                                                                                                                
      amortization  of                                                                                                                    
      acquired  intangible                                                                                                            
      assets                            $            42    $          45    $            46    $          130    $          145  
    Capital  additions        $            25    $          17    $            29    $            64    $            73  
    Adjusted  EBITDA  (4)    $          (55)  $        (42)  $          133    $          (84)  $          409  
    Cash,  cash                                                                                                                                
      equivalents  and                                                                                                                    
      marketable                                                                                                                              
      securities                    $          755    $        829    $          938    $          755    $          938  
    Non-GAAP  free  cash                                                                                                                
      flow  (5)                        $          (84)  $        (75)  $          (11)  $        (354)  $        (287)
    Total  assets                  $      3,229    $    3,381    $      4,325    $      3,229    $      4,325  
    Total  debt                      $      2,260    $    2,269    $      2,208    $      2,260    $      2,208  
    Headcount                                9,475          9,469          10,149            9,475          10,149  
                                              ---------    --------    ---------    ---------    ---------  
                                                                                                                                                        
(1)  Computing  and  Graphics  segment  primarily  includes  desktop  and  notebook    
        processors,  chipsets,  discrete  graphics  processing  units  (GPUs)  and          
        professional  graphics.                                                                                                    
                                                                                                                                                        
(2)  Enterprise,  Embedded  and  Semi-Custom  segment  primarily  includes  server    
        and  embedded  processors,  semi-custom  System-on-Chip  (SoC)  products,          
        development  services  and  technology  for  game  consoles.                                    
                                                                                                                                                        
(3)  All  Other  category  primarily  includes  certain  expenses  and  credits  that  
        are  not  allocated  to  any  of  the  operating  segments.  Also  included  in        
        this  category  are  amortization  of  acquired  intangible  assets  and  stock-  
        based  compensation  expense.  In  addition,  the  Company  also  included  the    
        following  adjustments  for  the  indicated  periods:  for  the  third  quarter    
        of  2015  and  nine  months  ended  September  26,  2015,  the  Company  included    
        net  restructuring  and  other  special  charges;  and  for  the  nine  months        
        ended  September  27,  2014,  the  Company  included  an  adjustment  for                
        workforce  rebalancing  severance  charges.                                                                
                                                                                                                                                        
(4)  Reconciliation  of  GAAP  Operating  Income  (Loss)  to  Adjusted  EBITDA*            
                                                                                                                                                        
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                              ------------------------------    --------------------  
                                              September    June  27,    September    September    September  
                                                26,  2015        2015          27,  2014      26,  2015      27,  2014  
                                              ---------    --------    ---------    ---------    ---------  
        GAAP  operating                                                                                                                    
          income  (loss)          $        (158)  $      (137)  $            63    $        (432)  $          175  
        Restructuring  and                                                                                                              
          other  special                                                                                                                    
          charges,  net                          48                  -                    -                135                    -  
        Technology  node                                                                                                                  
          transition  charge                  -                33                    -                  33                    -  
        Stock-based                                                                                                                          
          compensation                                                                                                                      
          expense                                    13                17                  21                  47                  65  
        Amortization  of                                                                                                                  
          acquired                                                                                                                              
          intangible  assets                  -                  -                    3                    3                  10  
        Depreciation  and                                                                                                                
          amortization                          42                45                  46                130                145  
        Workforce                                                                                                                              
          rebalancing                                                                                                                        
          severance  charges                  -                  -                    -                    -                  14  
                                              ---------    --------    ---------    ---------    ---------  
        Adjusted  EBITDA        $          (55)  $        (42)  $          133    $          (84)  $          409  
                                              =========    ========    =========    =========    =========  
                                                                                                                                                        
(5)  Non-GAAP  free  cash  flow  reconciliation**                                                                
                                                                                                                                                        
                                                          Three  Months  Ended                    Nine  Months  Ended    
                                              ------------------------------    --------------------  
                                              September        June        September    September    September  
                                                26,  2015      27,2015      27,  2014      26,  2015      27,  2014  
                                              ---------    --------    ---------    ---------    ---------  
        GAAP  net  cash                                                                                                                      
          provided  by  (used                                                                                                            
          in)  operating                                                                                                                    
          activities                $          (59)  $        (58)  $            18    $        (290)  $        (214)
        Purchases  of                                                                                                                        
          property,  plant                                                                                                                
          and  equipment                      (25)            (17)              (29)              (64)              (73)
                                              ---------    --------    ---------    ---------    ---------  
        Non-GAAP  free  cash                                                                                                            
          flow                            $          (84)  $        (75)  $          (11)  $        (354)  $        (287)
                                              =========    ========    =========    =========    =========  
                                                                                                                                                        
                                                                                                                                                        
*      The  Company  presents  "Adjusted  EBITDA"  as  a  supplemental  measure  of  its  
        performance.  Adjusted  EBITDA  for  the  Company  is  determined  by  adjusting  
        operating  income  (loss)  for  depreciation  and  amortization,  stock-based    
        compensation  expense  and  amortization  of  acquired  intangible  assets.  In  
        addition,  the  Company  also  excluded  the  following  adjustments  for  the      
        indicated  periods:  for  the  third  quarter  of  2015  and  nine  months  ended    
        September  26,  2015,  the  Company  excluded  restructuring  and  other                
        special  charges,  net,  for  the  second  quarter  of  2015  and  nine  months        
        ended  September  26,  2015,  the  Company  excluded  a  technology  node                
        transition  charge,  and  for  the  nine  months  ended  September  27,  2014,        
        the  Company  excluded  an  adjustment  for  workforce  rebalancing  severance    
        charges.  The  Company  calculates  and  communicates  Adjusted  EBITDA                
        because  the  Company's  management  believes  it  is  of  importance  to                
        investors  and  lenders  in  relation  to  its  overall  capital  structure  and    
        its  ability  to  borrow  additional  funds.  In  addition,  the  Company                
        presents  Adjusted  EBITDA  because  it  believes  this  measure  assists              
        investors  in  comparing  its  performance  across  reporting  periods  on  a        
        consistent  basis  by  excluding  items  that  the  Company  does  not  believe      
        are  indicative  of  its  core  operating  performance.  The  Company's                  
        calculation  of  Adjusted  EBITDA  may  or  may  not  be  consistent  with  the        
        calculation  of  this  measure  by  other  companies  in  the  same  industry.        
        Investors  should  not  view  Adjusted  EBITDA  as  an  alternative  to  the  GAAP  
        operating  measure  of  operating  income  (loss)  or  GAAP  liquidity  measures  
        of  cash  flows  from  operating,  investing  and  financing  activities.  In        
        addition,  Adjusted  EBITDA  does  not  take  into  account  changes  in  certain  
        assets  and  liabilities  as  well  as  interest  and  income  taxes  that  can        
        affect  cash  flows.                                                                                                            
**    The  Company  also  presents  non-GAAP  free  cash  flow  as  a  supplemental          
        measure  of  its  performance.  Non-GAAP  free  cash  flow  is  determined  by        
        adjusting  GAAP  net  cash  provided  by  (used  in)  operating  activities  for    
        capital  expenditures.  The  Company  calculates  and  communicates  non-GAAP    
        free  cash  flow  in  the  financial  earnings  press  release  because  the            
        Company's  management  believes  it  is  of  importance  to  investors  to              
        understand  the  nature  of  these  cash  flows.  The  Company's  calculation  of  
        non-GAAP  free  cash  flow  may  or  may  not  be  consistent  with  the                      
        calculation  of  this  measure  by  other  companies  in  the  same  industry.        
        Investors  should  not  view  non-GAAP  free  cash  flow  as  an  alternative  to    
        GAAP  liquidity  measures  of  cash  flows  from  operating  activities.  The        
        Company  has  provided  reconciliations  within  the  earnings  press  release    
        of  these  non-GAAP  financial  measures  to  the  most  directly  comparable        
        GAAP  financial  measures.                                                                                                
 

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