AMD Reports Second Quarter Results

SUNNYVALE, Calif.--(BUSINESS WIRE)-- AMD1 (NYSE:AMD) today reported second quarter 2009 results.

AMD reported revenue for the second quarter of 2009 of $1.184 billion. Second quarter 2009 revenue was flat compared to the first quarter of 2009 and decreased 13 percent compared to the second quarter of 2008.

"The AMD Product Company successfully executed its product and technology roadmaps in the first half of the year, including introducing the Six-Core AMD Opteron(TM) processor months ahead of schedule. While we increased cash, exceeded our revenue plan and reduced operating expenses in the second quarter, gross margin was disappointing," said Dirk Meyer, AMD president and CEO. "New platform, microprocessor and graphics introductions planned for the second half of 2009 position us well to improve margins and meet our financial goals for the year."

In the second quarter of 2009, AMD reported a net loss attributable to AMD common stockholders of $330 million or $0.49 per share, which includes the net favorable impact of $86 million, or $0.13 per share, primarily from the sale of inventory written-down in the fourth fiscal quarter of 2008 as described in the table below2. AMD's operating loss was $249 million.

In the first quarter of 2009, AMD had revenue of $1.177 billion, a net loss attributable to AMD common stockholders of $416 million and an operating loss of $298 million. In the second quarter of 2008, AMD had revenue from continuing operations of $1.362 billion, a net loss attributable to AMD common stockholders of $1.195 billion and an operating loss of $569 million.

In the second quarter of 2009, AMD Product Company reported a non-GAAP net loss of $244 million and a non-GAAP operating loss of $205 million. In the first quarter of 2009, AMD Product Company reported a non-GAAP net loss of $189 million and a non-GAAP operating loss of $123 million3.

Second quarter 2009 AMD gross margin was 37 percent, including a positive impact of 8 percentage points due to a $98 million benefit from the sale of inventory written down in the fourth quarter of 2008. First quarter 2009 AMD gross margin was 43 percent, including a positive impact of 5 percentage points due to a $64 million benefit from the sale of inventory written down in the fourth quarter of 2008. Second quarter 2009 AMD Product Company non-GAAP gross margin was 27 percent compared to 35 percent in the prior quarter.

Current Outlook

AMD's outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.

Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be up slightly for the third quarter of 2009.

Additional Highlights

    --  Leading enterprise computing providers, including Dell, HP, IBM and Sun
        Microsystems announced new servers based on the Six-Core AMD Opteron
        processor, which is a drop-in replacement for the Quad-Core AMD Opteron
        processor and delivers up to 34 percent more performance-per-watt in the
        exact same platform.
    --  AMD introduced the first 40nm desktop graphics processor, the first 1
        GHz graphics processor and held the first public preview of working
        silicon and drivers supporting Microsoft's upcoming DirectX(R) 11
        technology featured in Windows 7.
    --  Customer adoption of AMD's graphics products for the professional market
        continued, with Dell, HP and Lenovo offering workstations featuring ATI
        FirePro(TM) professional graphics accelerators.
    --  HP, Acer, BenQ, and Medion announced solutions powered by the AMD Neo
        (TM) and ATI Radeon(TM) family of low-power technologies, including
        delivering the industry's first affordable, full-featured HD computing
        experiences to the increasingly popular ultrathin notebook and
        all-in-one desktop markets.
    --  AMD refreshed its Dragon platform technology for desktop PCs, including
        the introduction of the AMD Phenom(TM) II X4 955 Black Edition
        processor, the company's fastest quad-core processor. The stability of
        AMD Phenom II processors on Dragon technology provides an ideal platform
        for overclocking, resulting in the industry's first known CPU to break
        the 7GHz barrier.
    --  Adobe, ArcSoft and Cyberlink began offering optimized versions of their
        video editing and processing applications that use ATI Stream technology
        to intelligently combine the computing power of AMD's CPUs and GPUs to
        greatly accelerate the time-intensive activity of video encoding.
    --  AMD's vision to bring a leading-edge semiconductor manufacturing
        facility and thousands of jobs to upstate New York is being fulfilled as
        GLOBALFOUNDRIES prepares to break ground on the construction of the Fab
        2 project in New York. Fab 2 is expected to be the world's most
        technologically-advanced semiconductor manufacturing facility, expanding
        AMD's access to world-class manufacturing expertise.

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 second quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site at www.amd.com. The webcast will be available for 10 days after the conference call.


Reconciliation of GAAP Net Income (Loss) Attributable to AMD Common Stockholders
to AMD Product Company Non-GAAP Net Income (Loss)1,2,3,4

(Millions
except per       Q2-09                Q1-09                Q2-08
share amounts)

GAAP net income
(loss)
attributable to  $ (330 )  $ (0.49 )  $ (416 )  $ (0.66 )  $ (1,195 )  $ (1.97 )
AMD common
stockholders /
EPS

Loss from
discontinued       -         -          -         -          (494   )    (0.81 )
operations

Income (loss)
attributable to
AMD              $ (330 )  $ (0.49 )  $ (416 )  $ (0.66 )  $ (701   )  $ (1.16 )
stockholders
from continuing
operations

Gross margin
benefit from
sales of           98        0.15       64        0.10       -           -
inventory
written down in
Q4-08

Amortization of
acquired           (17  )    (0.03 )    (18  )    (0.03 )    (37    )    (0.06 )
intangibles

ATI impairment
of goodwill and
acquired           -         -          -         -          (403   )    (0.66 )
intangible
assets

Restructuring      (1   )    -          (60  )    (0.10 )    (31    )    (0.05 )
charges

AMD Product
Company
formation costs    -         -          (21  )    (0.03 )    -           -
associated with
GLOBALFOUNDRIES

Gain on sale of
200 millimeter     -         -          -         -          193         0.32
equipment

Investment net     -         -          (9   )    (0.01 )    (36    )    (0.06 )
charges

Gain on debt       6         0.01       108       0.17       -           -
buyback

Gain on sale of    -         -          28        0.04       -           -
Handheld assets

Incremental tax
provision
related to the     -         -          (114 )    (0.18 )    -           -
formation of
GLOBALFOUNDRIES

Net favorable
(unfavorable)    $ 86      $ 0.13     $ (22  )  $ (0.04 )  $ (314   )  $ (0.52 )
impact subtotal

Non-GAAP net
income (loss)
attributable to  $ (416 )  -          $ (394 )  -          $ (387   )  -
AMD common
stockholders

Net income
(loss) from
Foundry segment    (177 )    (0.27 )    (317 )    (0.51 )  -           -
and
intersegment
eliminations

Incremental tax
provision
related to the     -         -          114       0.18     -           -
formation of
GLOBALFOUNDRIES

Net (income)
loss
attributable to    25        0.04       6         0.01     -           -
noncontrolling
interest

Class B
preferred          (20  )    (0.03 )    (8   )    (0.01 )  -           -
accretion

AMD Product
Company          $ (244 )  -          $ (189 )  -          -           -
non-GAAP net
income (loss)




Reconciliation of GAAP to AMD Product Company Non-GAAP Operating Income
(Loss)1,2,3,4

(Millions)                                          Q2-09     Q1-09     Q2-08

GAAP operating income (loss)                        $ (249 )  $ (298 )  $ (569 )

Gross margin benefit from sales of inventory          98        64        -
written down in Q4-08

Amortization of acquired intangibles                  (17  )    (18  )    (37  )

ATI impairment of goodwill and acquired intangible    -         -         (403 )
assets

Restructuring charges                                 (1   )    (60  )    (31  )

AMD Product Company formation costs associated        -         (21  )    -
with GLOBALFOUNDRIES

Gain on sale of 200 millimeter equipment              -         -         193

Non-GAAP operating income (loss)                    $ (329 )  $ (263 )  $ (291 )

Operating income (loss) from Foundry segment and      (124 )    (140 )  -
intersegment eliminations

AMD Product Company non-GAAP operating income       $ (205 )  $ (123 )  -
(loss)




Reconciliation of GAAP to AMD Product Company Non-GAAP Gross Margin1,2,3,4

(Millions, except percentages)                        Q2-09    Q1-09    Q2-08

GAAP Gross Margin                                     $ 441    $ 511    $ 511

GAAP Gross Margin %                                     37  %    43  %    38  %

Gross margin benefit from sales of inventory written    98       64       -
down in Q4-08

Non-GAAP Gross Margin                                 $ 343    $ 447    $ 511

Non-GAAP Gross Margin %                                 29  %    38  %    38  %

Gross margin from Foundry segment and intersegment      20       34     -
eliminations

AMD Product Company non-GAAP Gross Margin             $ 323    $ 413    -

AMD Product Company non-GAAP Gross Margin %             27  %    35  %  -




Select Segment Information4

(Millions, except percentages)                  Q2-09  vs Q1-09  vs Q2-08

Computing Solutions

Revenue                                         $ 910  -3 %      -17 %

Microprocessor Units                                   flat      down

Microprocessor Average Selling Prices (ASP)            down      down

Graphics

Revenue                                         $ 251  13 %      1   %

Graphic Processor Units                                up        up

Graphic Processor Average Selling Prices (ASP)         down      down



About AMD

Advanced Micro Devices (NYSE:AMD) is an innovative technology company dedicated to collaborating with customers and technology partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com.

Cautionary Statement

This release contains forward-looking statements concerning AMD Product Company, its third quarter 2009 revenue, its gross margins and financials for 2009, the planned availability of its future products and technologies and assumptions regarding the future economic environment, 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; global business and economic conditions will continue in their current state or worsen resulting in lower than currently expected revenue in the third quarter of 2009 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; 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; 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 transition its products to advanced manufacturing process technologies in a timely and effective way; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; 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 March 28, 2009.

AMD, the AMD Arrow logo, AMD Opteron and AMD Neo 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 For financial reporting purposes, AMD consolidates the operating results of GLOBALFOUNDRIES Inc. in its results as of March 2, 2009 and created the Foundry segment as of the start of the fiscal year. References to "AMD" in this announcement include these consolidated operating results which are reported for GAAP purposes. "AMD Product Company" refers to AMD, excluding the operating results of the Foundry segment and Intersegment eliminations. Foundry segment includes 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 GLOBALFOUNDRIES from March 2, 2009 through June 27, 2009. Intersegment eliminations consist of revenues, cost of sales and profits on inventory between AMD Product Company and the Foundry segment.

2 In this press release, in addition to GAAP financial results, the Company has provided non-GAAP financial measures for AMD net income (loss) attributable to AMD common stockholders, operating income (loss) and gross margin. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this press release. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results by, among other things, excluding items that are not indicative of ongoing operating performance.

3 The Company is providing non-GAAP financial measures for AMD Product Company such as a statement of operations and selected balance sheet items as reflected in this press release. In addition, for AMD Product Company, the Company is providing non-GAAP financial measures such as net income (loss), operating income (loss) and gross margin which exclude certain adjustments as reflected in the tables above. AMD is providing these financial measures because it believes it is important for investors to have visibility into AMD's financial results excluding the Foundry segment, intersegment eliminations and certain adjustments as reflected in the tables in this press release and to better understand the Company's financial results absent the requirement to consolidate the financial results of GLOBALFOUNDRIES.

4 Refer to corresponding tables at the end of this press release for additional AMD and AMD Product Company data.


ADVANCED MICRO DEVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Millions except per share amounts and percentages)

                Quarter Ended                           Six Months Ended

                June 27,     March 28,    June 28,      June 27,     June 28,

                  2009         2009         2008          2009         2008(1)
                                            (1)

                (Unaudited)  (Unaudited)  (Unaudited)   (Unaudited)  (Unaudited)

Net revenue     $ 1,184      $ 1,177      $ 1,362       $ 2,361      $ 2,849

Cost of sales     743          666          851           1,409        1,717

Gross margin      441          511          511           952          1,132

Gross margin %    37    %      43    %      38     %      40    %      40      %

Research and      425          444          467           869          945
development

Marketing,
general and       247          287          335           534          672
administrative

Amortization
of acquired       17           18           37            35           77
intangible
assets

Impairment of
goodwill and
acquired          -            -            403           -            403
intangible
assets

Restructuring     1            60           31            61           31
charges

Gain on sale
of 200            -            -            (193   )      -            (193    )
millimeter
equipment

Operating         (249  )      (298  )      (569   )      (547  )      (803    )
income (loss)

Interest          6            3            10            9            25
income

Interest          (108  )      (97   )      (101   )      (205  )      (202    )
expense

Other income      6            94           (34    )      100          (35     )
(expense), net

Income (loss)
before income     (345  )      (298  )      (694   )      (643  )      (1,015  )
taxes

Provision
(benefit) for     (10   )      116          -             106          -
income taxes

Income (loss)
from              (335  )      (414  )      (694   )      (749  )      (1,015  )
continuing
operations

Income (loss)
from
discontinued      -            -            (494   )      -            (524    )
operations,
net of tax

Net income      $ (335  )    $ (414  )    $ (1,188 )    $ (749  )    $ (1,539  )
(loss)

Net (income)
loss
attributable      25           6            (7     )      31           (20     )
to
noncontrolling
interest

Class B
preferred         (20   )      (8    )      -             (28   )      -
accretion

Net Income
(loss)
attributable    $ (330  )    $ (416  )    $ (1,195 )    $ (746  )    $ (1,559  )
to AMD common
stockholders

Net income (loss)
attributable to AMD common
stockholders per common
share

Basic and
diluted

 Continuing     $ (0.49 )    $ (0.66 )    $ (1.16  )    $ (1.15 )    $ (1.71   )
 operations

 Discontinued     -            -            (0.81  )      -            (0.86   )
 operations

Basic and
diluted net
income (loss)
attributable    $ (0.49 )    $ (0.66 )    $ (1.97  )    $ (1.15 )    $ (2.57   )
to AMD common
stockholders
per common
share

Shares used in
per share
calculation

Basic and         667          626          607           647          606
diluted

(1) Includes retrospective adoption of FASB Staff Position Accounting Principles
Board No. 14-1, Accounting for Convertible Debt Instruments That May Be Settled
in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1) and
FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial
Statements - An Amendment of ARB No. 51 (SFAS 160) in the first quarter of 2009.





ADVANCED MICRO DEVICES, INC.

AMD NON-GAAP AND RECONCILIATIONS TO CONSOLIDATED STATEMENTS OF OPERATIONS(2)

(Millions except per share amounts and percentages)

                Quarter Ended                                                             Six Months Ended

                June 27, 2009                        March 28, 2009                       June 27, 2009

                AMD        Foundry                   AMD        Foundry                   AMD        Foundry
                Product    segment and               Product    segment and               Product    segment and
                Company    intersegment  AMD         Company    intersegment  AMD         Company    intersegment  AMD
                (3)        eliminations              (3)        eliminations              (3)        eliminations
                           (4)                                  (4)                                  (4)

Net revenue     $ 1,184    $ -           $ 1,184     $ 1,177    $ -           $ 1,177     $ 2,361    $ -           $ 2,361

Cost of sales     763        (20  )        743         700        (34  )        666         1,463      (54  )        1,409

Gross margin      421        20            441         477        34            511         898        54            952

Gross margin %    36    %                  37    %     41    %                  43    %     38    %                  40    %

Research and      306        119           425         305        139           444         611        258           869
development

Marketing,
general and       222        25            247         252        35            287         474        60            534
administrative

Amortization
of acquired       17         -             17          18         -             18          35         -             35
intangible
assets

Restructuring     1          -             1           60         -             60          61         -             61
charges

Operating         (125  )    (124 )        (249  )     (158  )    (140 )        (298  )     (283  )    (264 )        (547  )
income (loss)

Interest          3          3             6           6          (3   )        3           9          -             9
income

Interest          (71   )    (37  )        (108  )     (74   )    (23  )        (97   )     (145  )    (60  )        (205  )
expense

Other income      16         (10  )        6           128        (34  )        94          144        (44  )        100
(expense), net

Income (loss)
before income     (177  )    (168 )        (345  )     (98   )    (200 )        (298  )     (275  )    (368 )        (643  )
taxes

Provision
(benefit) for     (19   )    9             (10   )     (1    )    117           116         (20   )    126           106
income taxes

Net income      $ (158  )  $ (177 )      $ (335  )   $ (97   )  $ (317 )      $ (414  )   $ (255  )  $ (494 )      $ (749  )
(loss)

Net (income)
loss
attributable                               25                                   6                                    31
to
noncontrolling
interest

Class B
preferred                                  (20   )                              (8    )                              (28   )
accretion

Net income
(loss)
attributable                             $ (330  )                            $ (416  )                            $ (746  )
to AMD common
stockholders

(2) The Company believes this non-GAAP presentation makes it easier for investors to understand what AMD financial results
would be if it were not required to consolidate the operations of GLOBALFOUNDRIES.

(3) Consists of the results of the Computing Solutions and Graphics segments and the All other category.

(4) See footnotes 3 and 5 in Selected Corporate Data




ADVANCED MICRO DEVICES, INC.

CONSOLIDATED BALANCE SHEETS

(Millions)

                                                      June 27,     Dec. 27,

                                                        2009         2008(5)

                                                      (Unaudited)

Assets

Current assets:

 Cash, cash equivalents and marketable securities     $ 2,514      $ 1,096

 Accounts receivable, net                               366          320

 Inventories                                            493          656

 Prepaid expenses and other current assets              302          279

 Deferred income taxes                                  38           28

         Total current assets                           3,713        2,379

Property, plant and equipment, net                      4,042        4,296

Goodwill                                                323          323

Acquisition related intangible assets, net              133          168

Other assets                                            472          506

Total Assets                                          $ 8,683      $ 7,672

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:

 Accounts payable                                     $ 571        $ 631

 Accrued compensation and benefits                      162          162

 Accrued liabilities                                    642          785

 Deferred income on shipments to distributors           87           50

 Current portion of long-term debt and capital lease    289          286
 obligations

 Other short-term obligations                           89           86

 Other current liabilities                              182          226

         Total current liabilities                      2,022        2,226

Deferred income taxes                                   221          91

Long-term debt and capital lease obligations, less      5,243        4,490
current portion

Other long-term liabilities                             577          569

Noncontrolling interest                                 1,085        169

Stockholders' equity (deficit):

 Capital stock:

       Common stock, par value                          7            6

       Capital in excess of par value                   6,398        6,264

 Retained earnings (deficit)                            (6,997 )     (6,251  )

 Accumulated other comprehensive income                 127          108

         Total stockholders' equity (deficit)           (465   )     127

Total Liabilities and Stockholders' Equity (Deficit)  $ 8,683      $ 7,672

(5) Amounts for the year ended December 27, 2008 were derived from the
December 27, 2008 audited financial statements, including retrospective
adoption of FSP APB 14-1 and SFAS 160 implemented in the first quarter of
2009.




ADVANCED MICRO DEVICES, INC.

SELECTED CORPORATE DATA

(Unaudited)

(Millions except headcount and percentages)

                     Quarter Ended                        Six Months Ended

                     June 27,    March 28,   June 28,     June 27,    June 28,

Segment and
Category
Information from       2009        2009        2008         2009        2008
Continuing
Operations

Computing Solutions
(1)

Net revenue          $ 910       $ 938       $ 1,101      $ 1,848     $ 2,295

Operating income     $ (72    )  $ (35    )  $ (9     )   $ (107   )  $ (173   )
(loss)

Graphics (2)

Net revenue            251         222         248          473         510

Operating income       (12    )    1           (38    )     (11    )    (25    )
(loss)

Foundry (3)

Net revenue            253         283                      536

Operating income       (101   )    (132   )                 (233   )
(loss)

All Other (4)

Net revenue            23          17          13           40          44

Operating income       (41    )    (124   )    (522   )     (165   )    (605   )
(loss)

Intersegment
eliminations (5)

Net revenue            (253   )    (283   )                 (536   )

Operating income       (23    )    (8     )                 (31    )
(loss)

Total from
Continuing
Operations

Net revenue          $ 1,184     $ 1,177     $ 1,362      $ 2,361     $ 2,849

Operating income     $ (249   )  $ (298   )  $ (569   )   $ (547   )  $ (803   )
(loss)

Revenue
Reconciliation

Revenue from
continuing           $ 1,184     $ 1,177     $ 1,362      $ 2,361     $ 2,849
operations

Revenue from
discontinued           -           -           24           -           42
operations

Total revenue        $ 1,184     $ 1,177     $ 1,386      $ 2,361     $ 2,891

Other Data

AMD Product Company (excludes Foundry segment and intersegment eliminations)

Depreciation and
amortization

(excluding
amortization of      $ 103       $ 105                    $ 208
acquired intangible
assets)

Capital additions    $ 15        $ 17                     $ 32

Adjusted EBITDA (6)  $ 14        $ 99                     $ 113

Cash, cash
equivalents and      $ 1,637     $ 1,599                  $ 1,637
marketable
securities (7)

Total assets (7)     $ 4,405     $ 4,536                  $ 4,405

Long-term debt (7)   $ 3,703     $ 3,711                  $ 3,703

Headcount              10,366      10,511                   10,366

AMD

Depreciation and
amortization

(excluding
amortization of      $ 265       $ 262       $ 265        $ 527       $ 531
acquired intangible
assets)

Capital additions    $ 112       $ 84        $ 104        $ 196       $ 426

Adjusted EBITDA (6)  $ 50        $ 77        $ 105        $ 127       $ 178

Headcount              13,281      13,408      15,653       13,281      15,653

See footnotes on
the next page





(1)  Computing Solutions segment includes microprocessors, chipsets and embedded processors.

     Graphics segment includes graphics, video and multimedia products developed for use in desktop and
(2)  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.

     Foundry segment includes the operating results attributable to the front end wafer manufacturing
(3)  operations and related activities as of the beginning of the first quarter of 2009, which includes the
     operating results of GLOBALFOUNDRIES from March 2, 2009 onward. Prior periods have not been recast.

     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
(4)  category are charges for the impairment of goodwill and acquired intangible assets for prior periods,
     amortization of acquired intangible assets, restructuring and AMD Product Company formation costs
     associated with GLOBALFOUNDRIES. Details of these significant items are shown below. The All Other
     category also includes the results of our Handheld business unit.

     Employee stock-based compensation expense, ATI acquisition-related charges, restructuring charges and
     AMD Product Company formation costs associated with GLOBALFOUNDRIES:

                      Quarter Ended                   Six Months Ended

                      Q209      Q109      Q208        Q209      Q208

     Employee
     stock-based      $ 18      $ 17      $ 18        $ 35      $ 38
     compensation
     expense

     Impairment of
     goodwill and
     acquired           -         -         403         -         403
     intangible
     assets

     Amortization of
     acquired           17        18        37          35        77
     intangible
     assets

     Restructuring      1         60        31          61        31
     charges

     AMD Product
     Company
     formation costs    -         21        -           21        -
     associated with
     GLOBALFOUNDRIES

                      $ 36      $ 116     $ 489       $ 152     $ 549

     Represents intersegment eliminations in revenue and in cost of sales and profits on inventory between
     AMD Product Company and the Foundry segment. For the quarters ended June 27, 2009, March 28, 2009 and
(5)  six months ended June 27, 2009, intersegment eliminations of revenue was $253 million, $283 million and
     $536 million, respectively. For the quarters ended June 27, 2009, March 28, 2009 and six months ended
     June 27, 2009, intersegment eliminations of cost of sales and profits on inventory was $230 million,
     $275 million and $505 million, respectively.

(6)  AMD reconciliation of net income (loss) attributable to AMD common stockholders to AMD Product Company
     (excluding Foundry segment and intersegment eliminations) Adjusted EBITDA*

                                                      Six
                      Quarter Ended                   Months
                                                      Ended

                      Q209      Q109                  Q209

     Net income
     (loss)
     attributable to  $ (330 )  $ (416 )              $ (746 )
     AMD common
     stockholders

     Net income
     (loss)
     attributable to    (25  )    (6   )                (31  )
     noncontrolling
     interest

     Class B
     preferred          20        8                     28
     accretion

     Foundry segment
     and
     intersegment       177       317                   494
     eliminations
     net loss

     AMD Product
     Company net      $ (158 )  $ (97  )              $ (255 )
     income (loss)

     Depreciation
     and                103       105                   208
     amortization

     Amortization of
     acquired           17        18                    35
     intangible
     assets

     Interest           71        74                    145
     expense

     Provision
     (benefit) for      (19  )    (1   )                (20  )
     income taxes

     Adjusted EBITDA  $ 14      $ 99                  $ 113

     AMD reconciliation of net income (loss) attributable to AMD common stockholders to Adjusted EBITDA*

                      Quarter Ended                   Six Months Ended

                      Q209      Q109      Q208        Q209      Q208

     Net income
     (loss)
     attributable to  $ (330 )  $ (416 )  $ (1,195 )  $ (746 )  $ (1,559 )
     AMD common
     stockholders

     Impairment of
     goodwill and
     acquired           -         -         403         -         403
     intangible
     assets

     Depreciation
     and                265       262       265         527       531
     amortization

     Amortization of
     acquired           17        18        37          35        77
     intangible
     assets

     Interest           108       97        101         205       202
     expense

     Provision
     (benefit) for      (10  )    116       -           106       -
     income taxes

     Income (loss)
     from
     discontinued       -         -         494         -         524
     operations, net
     of tax

     Adjusted EBITDA  $ 50      $ 77      $ 105       $ 127     $ 178

(7)  Reconciliation of select balance sheet items

                      Q209                                                   Q109

                      Cash, cash                                             Cash, cash
                      equivalents and     Total                              equivalents  Total    Long-term
                      marketable          Assets      Long-term debt**       and          Assets   debt**
                      securities                                             marketable
                                                                             securities

     AMD Product      $ 1,637             $ 4,405     $ 3,703                $ 1,599      $ 4,536  $ 3,711
     Company

     Foundry segment
     and                877                 4,278       1,829                  1,120        4,516    1,852
     intersegment
     eliminations

     AMD              $ 2,514             $ 8,683     $ 5,532                $ 2,719      $ 9,052  $ 5,563



* The Company defines Adjusted EBITDA as net income (loss) attributable to AMD common stockholders adjusted for impairment of goodwill and acquired intangible assets, depreciation and amortization, amortization of acquired intangible assets, interest expense, taxes and discontinued operations. AMD Product Company's adjusted EBITDA is also adjusted for the Foundry segment and intersegment eliminations net income (loss), net income (loss) attributable to noncontrolling interest and class B preferred accretion. The Company calculates and communicates Adjusted EBITDA because management believes it is of interest to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. 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 U.S. GAAP operating measure of net income or U.S. 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 also includes the current portion of long-term debt and capital lease obligations.


    Source: Advanced Micro Devices