AMD Reports Fourth Quarter and Annual Results

SUNNYVALE, CA -- (MARKET WIRE) -- Jan 20, 2011 -- AMD (NYSE: AMD) Fourth Quarter 2010 Results * AMD revenue $1.65 billion, 2 percent sequential increase and flat year-over-year * Net income $375 million, EPS $0.50, operating income $413 million * Non-GAAP(1,2) net income $106 million, EPS $0.14, operating income $141 million * Gross margin 45 percent 2010 Annual Results * AMD revenue $6.49 billion, an increase of 20 percent year-over-year * Net income $471 million, EPS $0.64, operating income $848 million * Non-GAAP(1,2) net income $360 million, EPS $0.49, operating income $553 million GAAP annual gross margin 46 percent, non-GAAP annual gross margin 45 percent AMD (NYSE: AMD) today announced revenue for the fourth quarter of 2010 of $1.65 billion, net income of $375 million, or $0.50 per share, and operating income of $413 million. The company reported non-GAAP net income of $106 million, or $0.14 per share, and non-GAAP operating income of $141 million. The non-GAAP net income and non-GAAP operating income primarily excluded a net of tax gain of $236 million, and a pre-tax gain of $283 million, respectively, that the company recognized related to a patent license and legal settlement. For the year ended December 25, 2010, AMD reported revenue of $6.49 billion, net income of $471 million, or $0.64 per share, and operating income of $848 million. Full year non-GAAP net income was $360 million, or $0.49 per share, and operating income was $553 million. "AMD enters 2011 with significant momentum, amplified by the successful launch of our first Fusion APUs," said Thomas Seifert, CFO and Interim CEO. "I am confident we can drive profitable growth based on the strength of new products we will bring to market. Our customers recognize that Fusion APUs are at the core of delivering the world's most vivid digital experiences." GAAP Financial Results Q4-10 Q3-10 Q4-09 2010 2009 ----------- ---------- ----------- ----------- ----------- Revenue $1.65B $1.62B $1.65B $6.49B $5.40B ----------- ---------- ----------- ----------- ----------- Operating income (loss) $413M $128M $1.29B $848M $664M ----------- ---------- ----------- ----------- ----------- Net income (loss) attributable to AMD common stockholders /earnings (loss) per $(118)M/ $1.18B/ share $375M/$0.50 $(0.17) $1.52 $471M/$0.64 $304M/$0.45 ----------- ---------- ----------- ----------- ----------- Non-GAAP Financial Results (1,3) Q4-10 Q3-10 Q4-09 2010 2009 ----------- ----------- ----------- ----------- ----------- Revenue $1.65B $1.62B $1.65B $6.49B $5.40B ----------- ----------- ----------- ----------- ----------- Operating income (loss) $141M $144M $169M $553M $(112)M ----------- ----------- ----------- ----------- ----------- Net income (loss) / Earnings (loss) per $(351)M/ share $106M/$0.14 $108M/$0.15 $80M/$0.11 $360M/$0.49 $(0.52) ----------- ----------- ----------- ----------- ----------- Quarterly Summary * Gross margin was 45 percent, down one percentage point sequentially primarily due to lower microprocessor average selling price (ASP). * Cash, cash equivalents and marketable securities balance at the end of the quarter was $1.79 billion. * Computing Solutions segment revenue was flat both sequentially and year-over-year. o Operating income was $91 million, compared with $164 million in Q3-10 and $161 million in Q4-09. o Microprocessor ASP decreased sequentially and was flat year-over-year. The sequential decrease was due to lower notebook and server ASPs. + AMD kicked off the next era of vivid computing with the launch of the industry's first Accelerated Processing Units (APUs) aimed at providing better experiences on the types of visual and data-intensive applications that are becoming increasingly popular. Our first AMD Fusion APUs combine a low-power x86 microprocessor with DirectX®11 capable graphics to deliver optimized mobile experiences. + Acer, Asus, Dell, HP, Lenovo, MSI, Samsung, Sony and Toshiba plan to deliver affordable thin and light mobile PCs based on the new APUs that offer full 1080P HD experiences and long battery life. + Key software partners announced support for AMD Fusion APUs, including Adobe, ArcSoft, Corel, DivX and Microsoft. + Notebooks powered by AMD's new APU received nine prestigious innovation awards, including best innovation and editors' choice awards. + AMD introduced its fastest six- and dual-core processors with the AMD Phenom™ II X6 1100T and the AMD Phenom™ II X2 565 Black Edition processors. + AMD continues to be adopted in the world's highest performance computers. AMD technology powers more top 50 supercomputers than any other processor vendor in the latest Top500 Supercomputing list. o Graphics segment revenue increased nine percent sequentially and was flat year-over-year. The sequential increase was driven by increased discrete graphics processor unit ASP and a seasonally strong increase in game console revenue. + Operating income was $68 million, compared with $1 million in Q3-10 and $50 million in Q4-09. + AMD introduced its second generation of DirectX 11-capable graphics cards to widespread acclaim and market reception, receiving more than 120 awards. The unprecedented game performance, energy efficiency and unrivaled feature set drove 50 awards for the AMD Radeon™ HD 6900 series graphics alone. Popular Science magazine recognized the ATI Radeon HD 5870 Eyefinity 6 graphics card with the magazine's coveted 'Best of What's New 2010' award. Current Outlook AMD's outlook statement is based on current expectations. The following statement is forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below. AMD expects first quarter of 2011 revenue to be flat to slightly down sequentially. For additional detail regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com. AMD Teleconference AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter and annual financial results. AMD will provide a real time audio broadcast of the teleconference on the Investor Relations page of its Web site at AMD. The webcast will be available for 10 days after the conference call. Reconciliation of GAAP Net Income (Loss) Attributable to AMD Common stockholders to Non-GAAP Net Income (Loss) (1,3) (Millions except per share amounts) Q4-10 Q3-10 Q4-09 ---------------- ---------------- ---------------- GAAP net income (loss) attributable to AMD common stockholders / Earnings (loss) per share $ 375 $ 0.50 $ (118) $ (0.17) $ 1,178 $ 1.52 ------- ------- ------- ------- ------- ------- Net impact of GF/Foundry segment related items* 27 0.05 (186) (0.25) (138) (0.17) ------- ------- ------- ------- ------- ------- Incremental tax provision related to the formation of GLOBALFOUNDRIES - - - - - - ------- ------- ------- ------- ------- ------- Net (income) loss attributable to noncontrolling interest - - - - 23 0.03 ------- ------- ------- ------- ------- ------- Class B preferred accretion - - - - (22) (0.03) ------- ------- ------- ------- ------- ------- Non-GAAP net income (loss) excluding GF/Foundry segment related items 348 0.47 68 0.09 1,315 1.69 ------- ------- ------- ------- ------- ------- Amortization of acquired intangible assets (11) (0.01) (16) (0.02) (18) (0.02) ------- ------- ------- ------- ------- ------- Legal settlements 283 0.39 - - 1,267 1.60 ------- ------- ------- ------- ------- ------- Income tax related to legal settlement (47) (0.06) - - - - ------- ------- ------- ------- ------- ------- Gain on investment sale 17 0.02 - - - - ------- ------- ------- ------- ------- ------- Gain (loss) on debt redemption - - (24) (0.03) (11) (0.01) ------- ------- ------- ------- ------- ------- Loss from discontinued operations - - - - (3) - ------- ------- ------- ------- ------- ------- Gross margin benefit from sales of inventory written down in Q4-08 - - - - - - ------- ------- ------- ------- ------- ------- Restructuring (charges) reversals - - - - - - ------- ------- ------- ------- ------- ------- AMD Product Company formation costs associated with GLOBALFOUNDRIES - - - - - - ------- ------- ------- ------- ------- ------- Incremental tax provision related to the formation of GLOBALFOUNDRIES - - - - - - ------- ------- ------- ------- ------- ------- Investment net charges - - - - - - ------- ------- ------- ------- ------- ------- Gain on sale of Handheld assets - - - - - - ------- ------- ------- ------- ------- ------- Non-GAAP net income (loss) / Earnings (loss) per share $ 106 $ 0.14 $ 108 $ 0.15 $ 80 $ 0.11 ------- ------- ------- ------- ------- ------- (Millions except per share amounts) 2010 2009 ---------------- ---------------- GAAP net income (loss) attributable to AMD common stockholders / Earnings (loss) per share $ 471 $ 0.64 $ 304 $ 0.45 ------- ------- ------- ------- Net impact of GF/Foundry segment related items* (68) (0.09) (823) (1.21) ------- ------- ------- ------- Incremental tax provision related to the formation of GLOBALFOUNDRIES - - 114 0.17 ------- ------- ------- ------- Net (income) loss attributable to noncontrolling interest - - 83 0.12 ------- ------- ------- ------- Class B preferred accretion - - (72) (0.11) ------- ------- ------- ------- Non-GAAP net income (loss) excluding GF/Foundry segment related items 539 0.73 1,002 1.45 ------- ------- ------- ------- Amortization of acquired intangible assets (61) (0.08) (70) (0.10) ------- ------- ------- ------- Legal settlements 283 0.39 1,267 1.87 ------- ------- ------- ------- Income tax related to legal settlement (47) (0.06) - - ------- ------- ------- ------- Gain on investment sale 24 0.03 - - ------- ------- ------- ------- Gain (loss) on debt redemption (24) (0.03) 169 0.25 ------- ------- ------- ------- Loss from discontinued operations - - (3) - ------- ------- ------- ------- Gross margin benefit from sales of inventory written down in Q4-08 - - 171 0.25 ------- ------- ------- ------- Restructuring (charges) reversals 4 0.01 (65) (0.10) ------- ------- ------- ------- AMD Product Company formation costs associated with GLOBALFOUNDRIES - - (21) (0.03) ------- ------- ------- ------- Incremental tax provision related to the formation of GLOBALFOUNDRIES - - (114) (0.17) ------- ------- ------- ------- Investment net charges - - (9) (0.01) ------- ------- ------- ------- Gain on sale of Handheld assets - - 28 0.04 ------- ------- ------- ------- Non-GAAP net income (loss) / Earnings (loss) per share $ 360 $ 0.49 $ (351) $ (0.52) ------- ------- ------- ------- * Q4-10 and Q3-10 consist of equity net income (loss) related to GLOBALFOUNDRIES. 2010 consists of $69 million gross margin benefit related to the deconsolidation of GLOBALFOUNDRIES in Q1-10, a $325 million gain on the fair value assessment of our investment in GLOBALFOUNDRIES in Q1-10, and $462 million equity net income (loss) related to GLOBALFOUNDRIES. Q4-09 and 2009 consists of the Foundry segment and Intersegment Eliminations loss. Reconciliation of GAAP to Non-GAAP Operating Income (Loss) (1,3) (Millions) Q4-10 Q3-10 Q4-09 2010 2009 ------- ------- ------- ------- ------- GAAP operating income (loss) $ 413 $ 128 $ 1,288 $ 848 $ 664 ------- ------- ------- ------- ------- Gross margin benefit from sales of inventory written down in Q4-08 - - - - 171 ------- ------- ------- ------- ------- Gross margin benefit due to the deconsolidation of GLOBALFOUNDRIES - - - 69 - ------- ------- ------- ------- ------- Amortization of acquired intangible assets (11) (16) (18) (61) (70) ------- ------- ------- ------- ------- Legal settlement 283 - 1,242 283 1,242 ------- ------- ------- ------- ------- Restructuring (charges) reversals - - - 4 (65) ------- ------- ------- ------- ------- AMD Product Company formation costs associated with GLOBALFOUNDRIES - - - - (21) ------- ------- ------- ------- ------- Operating income (loss) from Foundry segment and Intersegment Eliminations - - (105) - (481) ------- ------- ------- ------- ------- Non-GAAP operating income (loss) $ 141 $ 144 $ 169 $ 553 $ (112) ------- ------- ------- ------- ------- Reconciliation of GAAP to Non-GAAP Gross Margin (1,3) ------- ------- ------- ------- ------- (Millions, except percentages) Q4-10 Q3-10 Q4-09 2010 2009 ------- ------- ------- ------- ------- GAAP Gross Margin $ 743 $ 739 $ 735 $ 2,961 $ 2,272 ------- ------- ------- ------- ------- GAAP Gross Margin % 45% 46% 45% 46% 42% ------- ------- ------- ------- ------- Gross margin benefit from sales of inventory written down in Q4-08 - - - - 171 ------- ------- ------- ------- ------- Gross margin benefit due to the deconsolidation of GLOBALFOUNDRIES - - - 69 - ------- ------- ------- ------- ------- Gross margin from Foundry segment and Intersegment Eliminations - - 56 - 159 ------- ------- ------- ------- ------- Non-GAAP Gross Margin $ 743 $ 739 $ 679 $ 2,892 $ 1,942 ------- ------- ------- ------- ------- Non-GAAP Gross Margin % 45% 46% 41% 45% 36% ------- ------- ------- ------- ------- About AMD AMD (NYSE: AMD) is a semiconductor design innovator leading the next era of vivid digital experiences with its ground-breaking AMD Fusion Accelerated Processing Units (APUs). AMD's graphics and computing technologies power a variety of devices including PCs, game consoles and the powerful computers that drive the Internet and businesses. For more information, visit http://www.amd.com. Cautionary Statement This release contains forward-looking statements concerning AMD, its first quarter 2011 revenue and its 2011 goals, including profitable growth and the timing of the launch and ramp of new products and technologies and the features of these products as well as the timing of the launch of our customers' products that are based on our products, and demand for the Company's products, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities targeting the company's business will prevent attainment of the company's current plans; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; the company will be unable to transition its products to advanced manufacturing process technologies in a timely and effective way; global business and economic conditions will not continue to improve or will worsen resulting in lower than currently expected revenue in the first quarter of 2011 and beyond; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; customers stop buying the company's products or materially reduce their demand for its products; the company will require additional funding and may not be able to raise funds on favorable terms or at all; there will be unexpected variations in market growth and demand for the company's products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to maintain the level of investment in research and development that is required to remain competitive; manufacturing or other costs may exceed the company's expectations; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its commitment with respect to GLOBALFOUNDRIES' microprocessor manufacturing facilities. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended September 25, 2010. AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, and ATI, the ATI logo, and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner. (1) In this press release, in addition to GAAP financial results, the Company has provided non-GAAP financial measures, including for non-GAAP net income (loss) excluding GF/Foundry segment related items, non-GAAP net income (loss), non-GAAP operating income (loss), non-GAAP earnings per share and non-GAAP gross margin. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this press release. The Company also provided Adjusted EBITDA and non-GAAP Adjusted 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 press release. The Company 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 the Company believes it assists investors in comparing the Company'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 footnotes to the selected data tables. (2) Starting in the first quarter of 2010 through December 25, 2010, the Company accounted for its investment in GLOBALFOUNDRIES (GF) under the equity method of accounting. (3) Refer to corresponding tables at the end of this press release for additional AMD data. ADVANCED MICRO DEVICES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Millions except per share amounts and percentages) Quarter Ended Year Ended ---------------------------- ------------------ Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26, 2010 2010 2009 2010 2009 -------- -------- -------- -------- -------- Net revenue $ 1,649 $ 1,618 $ 1,646 $ 6,494 $ 5,403 Cost of sales 906 879 911 3,533 3,131 -------- -------- -------- -------- -------- Gross margin 743 739 735 2,961 2,272 Gross margin % 45% 46% 45% 46% 42% Research and development 352 359 432 1,405 1,721 Marketing, general and administrative 250 236 239 934 994 Legal settlement (283) - (1,242) (283) (1,242) Amortization of acquired intangible assets 11 16 18 61 70 Restructuring charges (reversal) - - - (4) 65 -------- -------- -------- -------- -------- Operating income 413 128 1,288 848 664 Interest income 2 3 3 11 16 Interest expense (39) (56) (119) (199) (438) Other income (expense), net 14 (6) 19 311 166 -------- -------- -------- -------- -------- Income (loss) before equity in net income (loss) of investee and income taxes 390 69 1,191 971 408 Provision for income taxes 42 1 11 38 112 Equity in net income (loss) of investee 27 (186) - (462) - -------- -------- -------- -------- -------- Income (loss) from continuing operations 375 (118) 1,180 471 296 Loss from discountinued operations, net of tax - - (3) - (3) -------- -------- -------- -------- -------- Net income (loss) $ 375 $ (118) $ 1,177 $ 471 $ 293 Net (income) loss attributable to noncontrolling interest - - 23 - 83 Class B preferred accretion - - (22) - (72) -------- -------- -------- -------- -------- Net income (loss) attributable to AMD common stockholders $ 375 $ (118) $ 1,178 $ 471 $ 304 -------- -------- -------- -------- -------- Net income (loss) attributable to AMD common stockholders per common share Basic Continuing operations $ 0.52 $ (0.17) $ 1.68 $ 0.66 $ 0.46 Discountinued operations - - (0.00) - (0.00) -------- -------- -------- -------- -------- Basic net income (loss) attributable to AMD common stockholders per common share $ 0.52 $ (0.17) $ 1.68 $ 0.66 $ 0.46 -------- -------- -------- -------- -------- Diluted Continuing operations $ 0.50 $ (0.17) $ 1.52 $ 0.64 $ 0.45 Discountinued operations - - (0.00) - (0.00) -------- -------- -------- -------- -------- Diluted net income (loss) attributable to AMD common stockholders per common share $ 0.50 $ (0.17) $ 1.52 $ 0.64 $ 0.45 -------- -------- -------- -------- -------- Shares used in per share calculation Basic 717 713 705 711 673 Diluted 758 713 791 733 678 ADVANCED MICRO DEVICES, INC. AMD NON-GAAP AND RECONCILIATIONS TO CONSOLIDATED STATEMENTS OF OPERATIONS (1) (Millions except per share amounts and percentages) Quarter Ended ---------------------------------------------------- Dec. 25, 2010 Sept. 25, 2010 ------------------------- ------------------------- GF GF related related adjustments AMD adjustments AMD AMD(2) (3) Non-GAAP AMD(2) (3) Non-GAAP ------- -------- ------- ------- ------- ------- Net revenue $ 1,649 $ - $ 1,649 $ 1,618 $ - $ 1,618 Cost of sales 906 - 906 879 - 879 ------- -------- ------- ------- ------- ------- Gross margin 743 - 743 739 - 739 Gross margin % 45% 45% 46% 46% Research and development 352 - 352 359 - 359 Marketing, general and administrative 250 - 250 236 - 236 Legal settlement (283) - (283) - - - Amortization of acquired intangible assets 11 - 11 16 - 16 Restructuring charges (reversal) - - - - - - ------- -------- ------- ------- ------- ------- Operating income (loss) 413 - 413 128 - 128 Interest income 2 - 2 3 - 3 Interest expense (39) - (39) (56) - (56) Other income (expense), net 14 - 14 (6) - (6) ------- -------- ------- ------- ------- ------- Income (loss) before equity in net income (loss) of investee and income taxes 390 - 390 69 - 69 Provision (benefit) for income taxes 42 - 42 1 - 1 Equity in net income (loss) of investee 27 27 - (186) (186) - ------- -------- ------- ------- ------- ------- Income (loss) from continuing operations 375 27 348 (118) (186) 68 Income (loss) from discountinued operations, net of tax - - - - - - ------- -------- ------- ------- ------- ------- Net income (loss) $ 375 $ 27 $ 348 $ (118) $ (186) $ 68 Net Income (loss) attributable to non-controlling interest - - Class B preferred accretion - - ------- -------- ------- ------- ------- ------- Net income (loss) attributable to AMD common stockholders $ 375 $ 348 $ (118) $ 68 Non-GAAP diluted earnings per share(4) $ 0.47 $ 0.09 ------- -------- ------- ------- ------- ------- Quarter Ended ------------------------- Dec. 26, 2009 ------------------------- Foundry segment and Intersegment Eliminations AMD AMD(2) (3) Non-GAAP ------- ------- ------- Net revenue $ 1,646 $ - $ 1,646 Cost of sales 911 (56) 967 ------- ------- ------- Gross margin 735 56 679 Gross margin % 45% 41% Research and development 432 131 301 Marketing, general and administrative 239 30 209 Legal settlement (1,242) (1,242) Amortization of acquired intangible assets 18 18 Restructuring charges (reversal) - - ------- ------- ------- Operating income (loss) 1,288 (105) 1,393 Interest income 3 3 Interest expense (119) (48) (71) Other income (expense), net 19 6 13 ------- ------- ------- Income (loss) before equity in net income (loss) of investee and income taxes 1,191 (147) 1,338 Provision (benefit) for income taxes 11 (9) 20 Equity in net income (loss) of investee - - - ------- ------- ------- Income (loss) from continuing operations 1,180 (138) 1,318 Income (loss) from discountinued operations, net of tax (3) - (3) ------- ------- ------- Net income (loss) $ 1,177 $ (138) $ 1,315 Net Income (loss) attributable to non-controlling interest 23 Class B preferred accretion (22) ------- ------- ------- Net income (loss) attributable to AMD common stockholders $ 1,178 $ 1,315 Non-GAAP diluted earnings per share(4) $ 1.69 ------- ------- ------- Year Ended ---------------------------------------------------- Dec. 25, 2010 Dec. 26, 2009 ------------------------- ------------------------- Foundry segment GF and related Intersegment adjustments AMD Eliminations AMD AMD(2) (3) Non-GAAP AMD(2) (3) Non-GAAP ------- ------- ------- ------- ------- ------- Net revenue $ 6,494 $ - $ 6,494 $ 5,403 $ - $ 5,403 Cost of sales 3,533 (69) 3,602 3,131 (159) 3,290 ------- ------- ------- ------- ------- ------- Gross margin 2,961 69 2,892 2,272 159 2,113 Gross margin % 46% 46% 42% 39% Research and development 1,405 - 1,405 1,721 524 1,197 Marketing, general and administrative 934 - 934 994 116 878 Legal settlement (283) - (283) (1,242) - (1,242) Amortization of acquired intangible assets 61 - 61 70 - 70 Restructuring charges (reversal) (4) - (4) 65 - 65 ------- ------- ------- ------- ------- ------- Operating income (loss) 848 69 779 664 (481) 1,145 Interest income 11 - 11 16 1 15 Interest expense (199) - (199) (438) (152) (286) Other income (expense), net 311 325 (14) 166 (55) 221 ------- ------- ------- ------- ------- ------- Income (loss) before equity in net income (loss) of investee and income taxes 971 394 577 408 (687) 1,095 Provision (benefit) for income taxes 38 - 38 112 136 (24) Equity in net income (loss) of investee (462) (462) - - - - ------- ------- ------- ------- ------- ------- Income (loss) from continuing operations 471 (68) 539 296 (823) 1,119 Income (loss) from discountinued operations, net of tax - - - (3) - (3) ------- ------- ------- ------- ------- ------- Net income (loss) $ 471 $ (68) $ 539 $ 293 $ (823) $ 1,116 Net Income (loss) attributable to non-controlling interest - 83 Class B preferred accretion - (72) ------- ------- ------- ------- ------- ------- Net income (loss) attributable to AMD common stockholders $ 471 $ 539 $ 304 $ 1,116 Non-GAAP diluted earnings per share(4) $ 0.73 $ 1.60 ------- ------- ------- ------- ------- ------- (1) From March 2, 2009 through December 26, 2009, the Company consolidated the operating results of GLOBALFOUNDRIES Inc. (GF). Starting in the first fiscal quarter of 2010 the Company began to account for its investment in GF under the equity method of accounting. The Company believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results, by excluding our portion GF's results of operations in the fourth and third fiscal quarters of 2010 and the year ended December 25, 2010, and Foundry segment and Intersegment Eliminations in the fourth fiscal quarter of 2009 and the year ended December 26, 2009. (2) Starting in the first fiscal quarter of 2010, the Company began to account for its investment in GF under the equity method of accounting. From March 2, 2009 through December 26, 2009 the operating results of GF were included in the Foundry segment. (3) For the fourth and third quarters of 2010, the Company excluded Equity in net income (loss) of investee. For the year ended December 25, 2010, the Company also excluded the gain recognized on the fair value assessment of its investment in GF upon deconsolidation, and the gross margin benefit due to the deconsolidation of GF. For the fourth fiscal quarter of 2009 and the year ended December 26, 2009, the Company excluded the Foundry segment and Intersegment Eliminations consisting of revenues, cost of sales, and profit on inventory between the Computing Solutions and the Foundry segments. (4) The outstanding diluted share amount for the non-GAAP diluted earnings per share calculation for the fourth fiscal quarter of 2010 is 758 million shares, including the 24 million shares related to the Company's 5.75% convertible notes. The outstanding diluted share amounts for non-GAAP diluted earnings per share calculation for the third fiscal quarter and year ended December 25, 2010 is 731 million shares and 733 million shares, respectively. These share amounts exclude the 24 million shares related to the Company's 5.75% convertible notes because the inclusion of these shares would be anti-dilutive. ADVANCED MICRO DEVICES, INC. CONSOLIDATED BALANCE SHEETS (Millions) Dec. 25, Sept. 25, Dec. 26, 2010 2010 2009* --------- --------- --------- Assets Current assets: Cash, cash equivalents and marketable securities $ 1,789 $ 1,726 $ 2,676 Accounts receivable, net 968 765 745 Inventories, net 632 622 567 Deferred income taxes - - 9 Prepaid expenses and other current assets 205 99 278 --------- --------- --------- Total current assets 3,594 3,212 4,275 Property, plant and equipment, net 700 723 3,809 Acquisition related intangible assets, net 37 48 98 Goodwill 323 323 323 Other assets 310 289 573 --------- --------- --------- Total Assets $ 4,964 $ 4,595 $ 9,078 ========= ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 376 $ 464 $ 647 Accounts payable to GLOBALFOUNDRIES 205 216 - Accrued liabilities 698 601 795 Deferred income on shipments to distributors 143 137 121 Other short-term obligations 229 209 171 Current portion of long-term debt and capital lease obligations 4 3 308 Other current liabilities 19 35 168 --------- --------- --------- Total current liabilities 1,674 1,665 2,210 Deferred income taxes - - 197 Long-term debt and capital lease obligations, less current portion 2,188 2,185 4,252 Other long-term liabilities 82 102 695 Noncontrolling interest - - 1,076 Accumulated loss in excess of investment in GLOBALFOUNDRIES 7 29 - Stockholders' equity: Capital stock: Common stock, par value 7 7 7 Capital in excess of par value 6,575 6,540 6,524 Treasury stock, at cost (102) (102) (98) Retained earnings (deficit) (5,468) (5,843) (5,939) Accumulated other comprehensive income 1 12 154 --------- --------- --------- Total stockholders' equity 1,013 614 648 --------- --------- --------- Total Liabilities and Stockholders' Equity $ 4,964 $ 4,595 $ 9,078 ========= ========= ========= * Includes the account balances of GF which were deconsolidated as of the beginning of the first quarter of 2010. ADVANCED MICRO DEVICES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Millions) Quarter Year Ended Ended ---------- ---------- Dec. 25, Dec. 25, 2010 2010 ---------- ---------- Cash flows from operating activities: Net income (loss) $ 375 $ 471 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Equity in net income (loss) of investee (27) 462 Gain on deconsolidation of GLOBALFOUNDRIES - (325) Depreciation and amortization 89 383 Compensation recognized under employee stock plans 22 87 Non-cash interest expense 5 30 Loss on debt redemption - 24 Provision for deferred income taxes 7 5 Amortization of foreign grant (7) (16) Net gain on sale of marketable securities (9) (17) Other (13) (15) Changes in operating assets and liabilities (excludes the effects of deconsolidation): Accounts receivable (465) (1,138) Inventories (10) (144) Prepaid expenses and other current assets (111) (97) Other assets (2) 11 Accounts payable to GLOBALFOUNDRIES (11) 55 Income taxes payable (1) 2 Accounts payable, accrued liabilities and other (55) (190) ---------- ---------- Net cash used in operating activities (213) (412) ---------- ---------- Cash flows from investing activities: Purchases of property, plant and equipment (38) (148) Purchases of available-for-sale securities (485) (1,800) Cash decrease due to deconsolidation of GLOBALFOUNDRIES - (904) Proceeds from sale of property, plant and equipment - 1 Proceeds from sale and maturity of available-for-sale securities 424 1,640 Proceeds from sale of trading securities - 69 Other (4) 19 ---------- ---------- Net cash used in investing activities (103) (1,123) ---------- ---------- Cash flows from financing activities: Proceeds from borrowings, net of issuance cost 297 1,520 Net proceeds from foreign grants 8 19 Proceeds from issuance of AMD common stock 6 15 Repayments of debt and capital lease obligations (16) (1,074) Other 7 4 ---------- ---------- Net cash provided by financing activities 302 484 ---------- ---------- Net decrease in cash and cash equivalents (14) (1,051) ---------- ---------- Cash and cash equivalents at beginning of period 620 1,657 ---------- ---------- Cash and cash equivalents at end of period $ 606 $ 606 ---------- ---------- ADVANCED MICRO DEVICES, INC. SELECTED CORPORATE DATA (Millions except headcount) Quarter Ended Year Ended ---------------------------- ------------------ Segment and Category Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26, Information 2010 2010 2009 2010 2009 --------- -------- -------- --------- -------- Computing Solutions (1) Net revenue $ 1,219 $ 1,226 $ 1,220 $ 4,817 $ 4,170 Operating income (loss) 91 164 161 529 142 Graphics (2) Net revenue 424 390 421 1,663 1,167 Operating income (loss) 68 1 50 149 35 All Other (3) Net revenue 6 2 5 14 66 Operating income (loss) 254 (37) 1,182 170 968 Subtotal (excludes Foundry segment and Intersegment Eliminations) Net revenue 1,649 1,618 1,646 6,494 5,403 Operating income (loss) 413 128 1,393 848 1,145 Foundry (4) Net revenue - - 309 - 1,101 Operating income (loss) - - (99) - (433) Intersegment Eliminations (5) Net revenue - - (309) - (1,101) Operating income (loss) - - (6) - (48) Total AMD Net revenue $ 1,649 $ 1,618 $ 1,646 $ 6,494 $ 5,403 Operating income (loss) $ 413 $ 128 $ 1,288 $ 848 $ 664 --------- -------- -------- --------- -------- Other Data Depreciation and amortization (excluding amortization of acquired intangible assets) $ 78 $ 79 $ 266 $ 322 $ 1,058 Capital additions $ 38 $ 31 $ 173 $ 148 $ 466 Headcount (excludes Foundry segment) 11,068 11,021 10,352 11,068 10,352 AMD non-GAAP comparison* Depreciation and amortization (excluding amortization of acquired intangible assets) $ 78 $ 79 $ 95 $ 322 $ 398 Capital additions $ 38 $ 31 $ 37 $ 148 $ 88 Adjusted EBITDA (6) $ 241 $ 245 $ 282 $ 1,031 $ 527 Cash, cash equivalents and marketable securities (7) $ 1,789 $ 1,726 $ 1,772 $ 1,789 $ 1,772 Adjusted free cash flow (8) $ 11 $ 91 N/A $ 355 N/A Total assets (7) $ 4,964 $ 4,595 $ 4,846 $ 4,964 $ 4,846 Long-term debt and capital lease obligations (7) $ 2,192 $ 2,188 $ 2,607 $ 2,192 $ 2,607 --------- -------- -------- --------- -------- * 2009 periods exclude Foundry segment and Intersegment Eliminations See footnotes on the next page (1) Computing Solutions segment includes microprocessors, chipsets and embedded processors. (2) Graphics segment includes graphics, video and multimedia products developed for use in desktop and notebook computers, including home media PCs, professional workstations, servers and also includes royalties received in connection with the sale of game console systems that incorporate the Company's graphics technology. (3) All Other category includes non-Foundry segment employee stock-based compensation expense and certain operating expenses and credits that are not allocated to the operating segments. Also included in this category is a gross margin benefit from the deconsolidation of GF, amortization of acquired intangible assets, restructuring charges and GF formation costs. The All Other category also includes the results of our Handheld business unit. (4) In 2009, Foundry segment included the operating results attributable to the front end wafer manufacturing operations and related activities as of the beginning of the first quarter of 2009, which includes the operating results of GF from March 2, 2009 to December 26, 2009. Starting with the first quarter of 2010, the Company began to account for its investment in GF under the equity method of accounting. (5) In 2009, Intersegment Eliminations represented eliminations in revenue and in cost of sales and profits on inventory between the Computing Solutions segment and the Foundry segment. For the fiscal quarter and the year ended December 26, 2009, intersegment eliminations of revenue was $309 million and $1,101 million, respectively. For the fiscal quarter and year ended December 26, 2009, intersegment eliminations of cost of sales and profits on inventory was $303 million and $1,053 million, respectively. (6) AMD reconciliation of GAAP operating income (loss) to Adjusted EBITDA* Quarter Ended Year Ended Q410 Q310 Q409 2010 2009 ------- ------- -------- ------- ------- GAAP operating income (loss) $ 413 $ 128 $ 1,288 $ 848 $ 664 Foundry segment and Intersegment Eliminations operating loss - - 105 - 481 Legal settlement (283) - (1,242) (283) (1,242) Depreciation and amortization 78 79 95 322 398 Employee stock-based compensation expense 22 22 18 87 70 Amortization of acquired intangible assets 11 16 18 61 70 Restructuring charges (reversals) - - - (4) 65 GF formation costs - - - - 21 ------- ------- -------- ------- ------- Adjusted EBITDA $ 241 $ 245 $ 282 $ 1,031 $ 527 ======= ======= ======== ======= ======= (7) Reconciliation of select balance sheet items Quarter Ended Q409 ------------------------------- Cash, cash Long-term equivalents and debt and marketable Total capital lease securities Assets obligations** AMD GAAP $ 2,676 $ 9,078 $ 4,560 Foundry segment and Intersegment Eliminations (904) (4,232) (1,953) --------- --------- --------- AMD Non-GAAP $ 1,772 $ 4,846 $ 2,607 ========= ========= ========= (8) Non-GAAP adjusted free cash flow reconciliation*** Quarter Ended Year Ended Q410 Q310 2010 --------- --------- --------- GAAP net cash used in operating activities $ (213) $ (124) $ (412) Non-GAAP adjustment 262 246 915 --------- --------- --------- Non-GAAP net cash provided by operating activities 49 122 503 Purchases of property, plant and equipment (38) (31) (148) --------- --------- --------- Non-GAAP adjusted free Cash Flow $ 11 $ 91 $ 355 ========= ========= ========= * Starting with the quarter ended December 26, 2009, the Company presented "Adjusted EBITDA" as a supplemental measure of its performance. Adjusted EBITDA for the Company was determined by adjusting operating income (loss) for depreciation and amortization, employee stock-based compensation expense and amortization of acquired intangible assets. In addition: for the fourth fiscal quarter of 2010, the Company included an adjustment related to its legal settlement with a third party; for the fourth fiscal quarter of 2009, the Company included an adjustment related to its legal settlement with Intel and for Foundry segment and Intersegment Eliminations operating loss; for fiscal 2010, the Company included adjustments related to its legal settlement with a third party and for certain restructuring reversals; and for fiscal 2009, the Company included adjustments related to its legal settlement with Intel, Foundry segment and Intersegment Eliminations operating loss, certain restructuring charges and GF formation costs. The Company calculates and communicates Adjusted EBITDA in the financial schedules 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. ** Long-term debt and capital lease obligations also includes the current portion. *** Starting in the first quarter of 2010, the Company presents non-GAAP adjusted free cash flow as a supplemental measure of its performance. In 2008 and 2009 the Company and certain of its subsidiaries (collectively, the "AMD Parties") entered into supplier agreements with IBM Credit LLC and certain of its subsidiaries, (collectively, the "IBM Parties"). Pursuant to these supplier agreements, the AMD Parties sell to the IBM Parties invoices of selected distributor customers. Because the Company does not recognize revenue until its distributors sell its products to their customers, under U.S. GAAP, the Company classifies funds received from the IBM Parties as debt on the balance sheet. Moreover, for cash flow purposes, these funds are classified as cash flows from financing activities. When a distributor pays the applicable IBM Party, the Company reduces the distributor's accounts receivable and the corresponding debt resulting in a non-cash accounting entry. Because the Company does not receive the cash from the distributor to reduce the accounts receivable, the distributor's payment is never reflected in the Company's cash flows from operating activities. Non-GAAP adjusted free cash flow for the Company was determined by adjusting GAAP net cash provided by (used in) operating activities by adding the distributors' payments to the IBM Parties to GAAP net cash provided by (used in) operating activities. This amount is then further adjusted by subtracting capital expenditures. Generally, under U.S. GAAP, the reduction in accounts receivable is assumed to be a source of operating cash flows. Therefore, the Company believes that treating the payments from its distributor customers to the IBM Parties as if the Company actually received the cash from the distributor and then used that cash to pay down the debt is more reflective of the economic substance of the transaction. The Company calculates and communicates non-GAAP adjusted free cash flow in the financial schedules 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 Adjusted 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 Adjusted Free Cash Flow as an alternative to GAAP liquidity measures of cash flows from operating or financing activities. Add to Digg Bookmark with del.icio.us Add to Newsvine Media Contact Drew Prairie 512-602-4425 Email Contact Investor Contact Ruth Cotter 408-749-3887 Email Contact



Review Article Be the first to review this article
CST Webinar Series

EMA:

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
Retail Therapy: Jump starting Black Friday
Peggy AycinenaIP Showcase
by Peggy Aycinena
REUSE 2016: Addressing the Four Freedoms
More Editorial  
Jobs
ACCOUNT MANAGER MUNICH GERMANY EU for EDA Careers at MUNICH, Germany
Development Engineer-WEB SKILLS +++ for EDA Careers at North Valley, CA
Manager, Field Applications Engineering for Real Intent at Sunnyvale, CA
FAE FIELD APPLICATIONS SAN DIEGO for EDA Careers at San Diego, CA
AE-APPS SUPPORT/TMM for EDA Careers at San Jose-SOCAL-AZ, CA
Upcoming Events
Zuken Innovation World 2017, April 24 - 26, 2017, Hilton Head Marriott Resort & Spa in Hilton Head Island, SC at Hilton Head Marriott Resort & Spa Hilton Head Island NC - Apr 24 - 26, 2017
CST Webinar Series



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy