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AMD Reports Fourth Quarter and Annual Results

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

SUNNYVALE, CA, Jan 20, 2011 (MARKETWIRE via COMTEX) -- AMD (NYSE: AMD)

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.
    --  Operating income was $91 million, compared with $164 million in
        Q3-10 and $161 million in Q4-09.
    --  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(R)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(TM) II X6 1100T and the AMD Phenom(TM) 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.
    --  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(TM) 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
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.

Media Contact
Drew Prairie
512-602-4425


Investor Contact
Ruth Cotter
408-749-3887

SOURCE: Advanced Micro Devices

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