AMD Reports Fourth Quarter and Annual Results
SUNNYVALE, CA -- (MARKET WIRE) -- 01/20/11 -- AMD (NYSE: AMD)
Fourth Quarter 2010 Results
- AMD revenue $1.65 billion, 2 percent sequential increase and flat year-over-year
- Net income $375 million, EPS $0.50, operating income $413 million
- Non-GAAP(1,2) net income $106 million, EPS $0.14, operating income $141 million
- Gross margin 45 percent
2010 Annual Results
- AMD revenue $6.49 billion, an increase of 20 percent year-over-year
- Net income $471 million, EPS $0.64, operating income $848 million
- Non-GAAP(1,2) net income $360 million, EPS $0.49, operating income $553 million
- GAAP annual gross margin 46 percent, non-GAAP annual gross margin 45 percent
AMD (NYSE: AMD) today announced revenue for the fourth quarter of 2010 of $1.65 billion, net income of $375 million, or $0.50 per share, and operating income of $413 million. The company reported non-GAAP net income of $106 million, or $0.14 per share, and non-GAAP operating income of $141 million. The non-GAAP net income and non-GAAP operating income primarily excluded a net of tax gain of $236 million, and a pre-tax gain of $283 million, respectively, that the company recognized related to a patent license and legal settlement.
For the year ended December 25, 2010, AMD reported revenue of $6.49 billion, net income of $471 million, or $0.64 per share, and operating income of $848 million. Full year non-GAAP net income was $360 million, or $0.49 per share, and operating income was $553 million.
"AMD enters 2011 with significant momentum, amplified by the successful launch of our first Fusion APUs," said Thomas Seifert, CFO and Interim CEO. "I am confident we can drive profitable growth based on the strength of new products we will bring to market. Our customers recognize that Fusion APUs are at the core of delivering the world's most vivid digital experiences."
GAAP Financial Results
Q4-10 Q3-10 Q4-09 2010 2009
----------- ---------- ----------- ----------- -----------
Revenue $1.65B $1.62B $1.65B $6.49B $5.40B
----------- ---------- ----------- ----------- -----------
Operating
income (loss) $413M $128M $1.29B $848M $664M
----------- ---------- ----------- ----------- -----------
Net income
(loss)
attributable
to AMD common
stockholders
/earnings
(loss) per $(118)M/ $1.18B/
share $375M/$0.50 $(0.17) $1.52 $471M/$0.64 $304M/$0.45
----------- ---------- ----------- ----------- -----------
Non-GAAP Financial Results (1,3)
Q4-10 Q3-10 Q4-09 2010 2009
----------- ----------- ----------- ----------- -----------
Revenue $1.65B $1.62B $1.65B $6.49B $5.40B
----------- ----------- ----------- ----------- -----------
Operating
income (loss) $141M $144M $169M $553M $(112)M
----------- ----------- ----------- ----------- -----------
Net income
(loss) /
Earnings
(loss) per $(351)M/
share $106M/$0.14 $108M/$0.15 $80M/$0.11 $360M/$0.49 $(0.52)
----------- ----------- ----------- ----------- -----------
Quarterly Summary
- Gross margin was 45 percent, down one percentage point sequentially primarily due to lower microprocessor average selling price (ASP).
- Cash, cash equivalents and marketable securities balance at the end of the quarter was $1.79 billion.
- Computing Solutions segment revenue was flat both sequentially and
year-over-year.
- 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®11 capable graphics to deliver optimized mobile experiences.
- Acer, Asus, Dell, HP, Lenovo, MSI, Samsung, Sony and Toshiba plan to deliver affordable thin and light mobile PCs based on the new APUs that offer full 1080P HD experiences and long battery life.
- Key software partners announced support for AMD Fusion APUs, including Adobe, ArcSoft, Corel, DivX and Microsoft.
- Notebooks powered by AMD's new APU received nine prestigious innovation awards, including best innovation and editors' choice awards.
- AMD introduced its fastest six- and dual-core processors with the AMD Phenom™ II X6 1100T and the AMD Phenom™ II X2 565 Black Edition processors.
- AMD continues to be adopted in the world's highest performance computers. AMD technology powers more top 50 supercomputers than any other processor vendor in the latest Top500 Supercomputing list.
- Graphics segment revenue increased nine percent sequentially and was
flat year-over-year. The sequential increase was driven by increased
discrete graphics processor unit ASP and a seasonally strong increase in
game console revenue.
- Operating income was $68 million, compared with $1 million in Q3-10 and $50 million in Q4-09.
- AMD introduced its second generation of DirectX 11-capable graphics cards to widespread acclaim and market reception, receiving more than 120 awards. The unprecedented game performance, energy efficiency and unrivaled feature set drove 50 awards for the AMD Radeon™ HD 6900 series graphics alone. Popular Science magazine recognized the ATI Radeon HD 5870 Eyefinity 6 graphics card with the magazine's coveted 'Best of What's New 2010' award.
Current Outlook
AMD's outlook statement is based on current expectations. The following statement is forward looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.
AMD expects first quarter of 2011 revenue to be flat to slightly down sequentially.
For additional detail regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.
AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter and annual financial results. AMD will provide a real time audio broadcast of the teleconference on the Investor Relations page of its Web site at AMD. The webcast will be available for 10 days after the conference call.
Reconciliation of GAAP Net Income (Loss) Attributable to AMD Common
stockholders to Non-GAAP Net Income (Loss) (1,3)
(Millions except per
share amounts) Q4-10 Q3-10 Q4-09
---------------- ---------------- ----------------
GAAP net income
(loss) attributable
to AMD common
stockholders /
Earnings (loss) per
share $ 375 $ 0.50 $ (118) $ (0.17) $ 1,178 $ 1.52
------- ------- ------- ------- ------- -------
Net impact of
GF/Foundry segment
related items* 27 0.05 (186) (0.25) (138) (0.17)
------- ------- ------- ------- ------- -------
Incremental tax
provision related
to the formation
of GLOBALFOUNDRIES - - - - - -
------- ------- ------- ------- ------- -------
Net (income) loss
attributable to
noncontrolling
interest - - - - 23 0.03
------- ------- ------- ------- ------- -------
Class B preferred
accretion - - - - (22) (0.03)
------- ------- ------- ------- ------- -------
Non-GAAP net income
(loss) excluding
GF/Foundry segment
related items 348 0.47 68 0.09 1,315 1.69
------- ------- ------- ------- ------- -------
Amortization of
acquired
intangible assets (11) (0.01) (16) (0.02) (18) (0.02)
------- ------- ------- ------- ------- -------
Legal settlements 283 0.39 - - 1,267 1.60
------- ------- ------- ------- ------- -------
Income tax related
to legal
settlement (47) (0.06) - - - -
------- ------- ------- ------- ------- -------
Gain on investment
sale 17 0.02 - - - -
------- ------- ------- ------- ------- -------
Gain (loss) on debt
redemption - - (24) (0.03) (11) (0.01)
------- ------- ------- ------- ------- -------
Loss from
discontinued
operations - - - - (3) -
------- ------- ------- ------- ------- -------
Gross margin
benefit from sales
of inventory
written down in
Q4-08 - - - - - -
------- ------- ------- ------- ------- -------
Restructuring
(charges)
reversals - - - - - -
------- ------- ------- ------- ------- -------
AMD Product Company
formation costs
associated with
GLOBALFOUNDRIES - - - - - -
------- ------- ------- ------- ------- -------
Incremental tax
provision related
to the formation
of GLOBALFOUNDRIES - - - - - -
------- ------- ------- ------- ------- -------
Investment net
charges - - - - - -
------- ------- ------- ------- ------- -------
Gain on sale of
Handheld assets - - - - - -
------- ------- ------- ------- ------- -------
Non-GAAP net income
(loss) / Earnings
(loss) per share $ 106 $ 0.14 $ 108 $ 0.15 $ 80 $ 0.11
------- ------- ------- ------- ------- -------
(Millions except per
share amounts) 2010 2009
---------------- ----------------
GAAP net income
(loss) attributable
to AMD common
stockholders /
Earnings (loss) per
share $ 471 $ 0.64 $ 304 $ 0.45
------- ------- ------- -------
Net impact of
GF/Foundry segment
related items* (68) (0.09) (823) (1.21)
------- ------- ------- -------
Incremental tax
provision related
to the formation
of GLOBALFOUNDRIES - - 114 0.17
------- ------- ------- -------
Net (income) loss
attributable to
noncontrolling
interest - - 83 0.12
------- ------- ------- -------
Class B preferred
accretion - - (72) (0.11)
------- ------- ------- -------
Non-GAAP net income
(loss) excluding
GF/Foundry segment
related items 539 0.73 1,002 1.45
------- ------- ------- -------
Amortization of
acquired
intangible assets (61) (0.08) (70) (0.10)
------- ------- ------- -------
Legal settlements 283 0.39 1,267 1.87
------- ------- ------- -------
Income tax related
to legal
settlement (47) (0.06) - -
------- ------- ------- -------
Gain on investment
sale 24 0.03 - -
------- ------- ------- -------
Gain (loss) on debt
redemption (24) (0.03) 169 0.25
------- ------- ------- -------
Loss from
discontinued
operations - - (3) -
------- ------- ------- -------
Gross margin
benefit from sales
of inventory
written down in
Q4-08 - - 171 0.25
------- ------- ------- -------
Restructuring
(charges)
reversals 4 0.01 (65) (0.10)
------- ------- ------- -------
AMD Product Company
formation costs
associated with
GLOBALFOUNDRIES - - (21) (0.03)
------- ------- ------- -------
Incremental tax
provision related
to the formation
of GLOBALFOUNDRIES - - (114) (0.17)
------- ------- ------- -------
Investment net
charges - - (9) (0.01)
------- ------- ------- -------
Gain on sale of
Handheld assets - - 28 0.04
------- ------- ------- -------
Non-GAAP net income
(loss) / Earnings
(loss) per share $ 360 $ 0.49 $ (351) $ (0.52)
------- ------- ------- -------
* Q4-10 and Q3-10 consist of equity net income (loss) related to
GLOBALFOUNDRIES. 2010 consists of $69 million gross margin benefit related
to the deconsolidation of GLOBALFOUNDRIES in Q1-10, a $325 million gain on
the fair value assessment of our investment in GLOBALFOUNDRIES in Q1-10,
and $462 million equity net income (loss) related to GLOBALFOUNDRIES. Q4-09
and 2009 consists of the Foundry segment and Intersegment Eliminations
loss.
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) (1,3)
(Millions) Q4-10 Q3-10 Q4-09 2010 2009
------- ------- ------- ------- -------
GAAP operating income (loss) $ 413 $ 128 $ 1,288 $ 848 $ 664
------- ------- ------- ------- -------
Gross margin benefit from
sales of inventory written
down in Q4-08 - - - - 171
------- ------- ------- ------- -------
Gross margin benefit due to
the deconsolidation of
GLOBALFOUNDRIES - - - 69 -
------- ------- ------- ------- -------
Amortization of acquired
intangible assets (11) (16) (18) (61) (70)
------- ------- ------- ------- -------
Legal settlement 283 - 1,242 283 1,242
------- ------- ------- ------- -------
Restructuring (charges)
reversals - - - 4 (65)
------- ------- ------- ------- -------
AMD Product Company
formation costs associated
with GLOBALFOUNDRIES - - - - (21)
------- ------- ------- ------- -------
Operating income (loss) from
Foundry segment and
Intersegment Eliminations - - (105) - (481)
------- ------- ------- ------- -------
Non-GAAP operating income
(loss) $ 141 $ 144 $ 169 $ 553 $ (112)
------- ------- ------- ------- -------
Reconciliation of GAAP to Non-GAAP Gross Margin (1,3)
------- ------- ------- ------- -------
(Millions, except percentages) Q4-10 Q3-10 Q4-09 2010 2009
------- ------- ------- ------- -------
GAAP Gross Margin $ 743 $ 739 $ 735 $ 2,961 $ 2,272
------- ------- ------- ------- -------
GAAP Gross Margin % 45% 46% 45% 46% 42%
------- ------- ------- ------- -------
Gross margin benefit from
sales of inventory written
down in Q4-08 - - - - 171
------- ------- ------- ------- -------
Gross margin benefit due to
the deconsolidation of
GLOBALFOUNDRIES - - - 69 -
------- ------- ------- ------- -------
Gross margin from Foundry
segment and Intersegment
Eliminations - - 56 - 159
------- ------- ------- ------- -------
Non-GAAP Gross Margin $ 743 $ 739 $ 679 $ 2,892 $ 1,942
------- ------- ------- ------- -------
Non-GAAP Gross Margin % 45% 46% 41% 45% 36%
------- ------- ------- ------- -------
About AMD
AMD (NYSE: AMD) is a semiconductor design innovator leading the next era of vivid digital experiences with its ground-breaking AMD Fusion Accelerated Processing Units (APUs). AMD's graphics and computing technologies power a variety of devices including PCs, game consoles and the powerful computers that drive the Internet and businesses. For more information, visit http://www.amd.com.
Cautionary Statement
This release contains forward-looking statements concerning AMD, its first quarter 2011 revenue and its 2011 goals, including profitable growth and the timing of the launch and ramp of new products and technologies and the features of these products as well as the timing of the launch of our customers' products that are based on our products, and demand for the Company's products, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities targeting the company's business will prevent attainment of the company's current plans; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; the company will be unable to transition its products to advanced manufacturing process technologies in a timely and effective way; global business and economic conditions will not continue to improve or will worsen resulting in lower than currently expected revenue in the first quarter of 2011 and beyond; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; customers stop buying the company's products or materially reduce their demand for its products; the company will require additional funding and may not be able to raise funds on favorable terms or at all; there will be unexpected variations in market growth and demand for the company's products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to maintain the level of investment in research and development that is required to remain competitive; manufacturing or other costs may exceed the company's expectations; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its commitment with respect to GLOBALFOUNDRIES' microprocessor manufacturing facilities. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended September 25, 2010.
AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, and ATI, the ATI logo, and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.
(1) In this press release, in addition to GAAP financial results, the Company has provided non-GAAP financial measures, including for non-GAAP net income (loss) excluding GF/Foundry segment related items, non-GAAP net income (loss), non-GAAP operating income (loss), non-GAAP earnings per share and non-GAAP gross margin. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this press release. The Company also provided Adjusted EBITDA and non-GAAP Adjusted free cash flow as supplemental measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this press release. The Company is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because the Company believes it assists investors in comparing the Company's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables.
(2) Starting in the first quarter of 2010 through December 25, 2010, the Company accounted for its investment in GLOBALFOUNDRIES (GF) under the equity method of accounting.
(3) Refer to corresponding tables at the end of this press release for additional AMD data.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended Year Ended
---------------------------- ------------------
Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26,
2010 2010 2009 2010 2009
-------- -------- -------- -------- --------
Net revenue $ 1,649 $ 1,618 $ 1,646 $ 6,494 $ 5,403
Cost of sales 906 879 911 3,533 3,131
-------- -------- -------- -------- --------
Gross margin 743 739 735 2,961 2,272
Gross margin % 45% 46% 45% 46% 42%
Research and development 352 359 432 1,405 1,721
Marketing, general and
administrative 250 236 239 934 994
Legal settlement (283) - (1,242) (283) (1,242)
Amortization of acquired
intangible assets 11 16 18 61 70
Restructuring charges
(reversal) - - - (4) 65
-------- -------- -------- -------- --------
Operating income 413 128 1,288 848 664
Interest income 2 3 3 11 16
Interest expense (39) (56) (119) (199) (438)
Other income (expense),
net 14 (6) 19 311 166
-------- -------- -------- -------- --------
Income (loss) before
equity in net income
(loss) of investee and
income taxes 390 69 1,191 971 408
Provision for income
taxes 42 1 11 38 112
Equity in net income
(loss) of investee 27 (186) - (462) -
-------- -------- -------- -------- --------
Income (loss) from
continuing operations 375 (118) 1,180 471 296
Loss from discountinued
operations, net of tax - - (3) - (3)
-------- -------- -------- -------- --------
Net income (loss) $ 375 $ (118) $ 1,177 $ 471 $ 293
Net (income) loss
attributable to
noncontrolling interest - - 23 - 83
Class B preferred
accretion - - (22) - (72)
-------- -------- -------- -------- --------
Net income (loss)
attributable to AMD
common stockholders $ 375 $ (118) $ 1,178 $ 471 $ 304
-------- -------- -------- -------- --------
Net income (loss)
attributable to AMD
common stockholders per
common share
Basic
Continuing
operations $ 0.52 $ (0.17) $ 1.68 $ 0.66 $ 0.46
Discountinued
operations - - (0.00) - (0.00)
-------- -------- -------- -------- --------
Basic net income
(loss) attributable
to AMD common
stockholders per
common share $ 0.52 $ (0.17) $ 1.68 $ 0.66 $ 0.46
-------- -------- -------- -------- --------
Diluted
Continuing
operations $ 0.50 $ (0.17) $ 1.52 $ 0.64 $ 0.45
Discountinued
operations - - (0.00) - (0.00)
-------- -------- -------- -------- --------
Diluted net income
(loss) attributable
to AMD common
stockholders per
common share $ 0.50 $ (0.17) $ 1.52 $ 0.64 $ 0.45
-------- -------- -------- -------- --------
Shares used in per share
calculation
Basic 717 713 705 711 673
Diluted 758 713 791 733 678
ADVANCED MICRO DEVICES, INC.
AMD NON-GAAP AND RECONCILIATIONS TO CONSOLIDATED STATEMENTS
OF OPERATIONS (1)
(Millions except per share amounts and percentages)
Quarter Ended
----------------------------------------------------
Dec. 25, 2010 Sept. 25, 2010
------------------------- -------------------------
GF GF
related related
adjustments AMD adjustments AMD
AMD(2) (3) Non-GAAP AMD(2) (3) Non-GAAP
------- -------- ------- ------- ------- -------
Net revenue $ 1,649 $ - $ 1,649 $ 1,618 $ - $ 1,618
Cost of sales 906 - 906 879 - 879
------- -------- ------- ------- ------- -------
Gross margin 743 - 743 739 - 739
Gross margin % 45% 45% 46% 46%
Research and
development 352 - 352 359 - 359
Marketing, general
and administrative 250 - 250 236 - 236
Legal settlement (283) - (283) - - -
Amortization of
acquired intangible
assets 11 - 11 16 - 16
Restructuring charges
(reversal) - - - - - -
------- -------- ------- ------- ------- -------
Operating income
(loss) 413 - 413 128 - 128
Interest income 2 - 2 3 - 3
Interest expense (39) - (39) (56) - (56)
Other income
(expense), net 14 - 14 (6) - (6)
------- -------- ------- ------- ------- -------
Income (loss) before
equity in net income
(loss) of investee
and income taxes 390 - 390 69 - 69
Provision (benefit)
for income taxes 42 - 42 1 - 1
Equity in net income
(loss) of investee 27 27 - (186) (186) -
------- -------- ------- ------- ------- -------
Income (loss) from
continuing
operations 375 27 348 (118) (186) 68
Income (loss) from
discountinued
operations, net of
tax - - - - - -
------- -------- ------- ------- ------- -------
Net income (loss) $ 375 $ 27 $ 348 $ (118) $ (186) $ 68
Net Income (loss)
attributable to
non-controlling
interest - -
Class B preferred
accretion - -
------- -------- ------- ------- ------- -------
Net income (loss)
attributable to AMD
common stockholders $ 375 $ 348 $ (118) $ 68
Non-GAAP diluted
earnings per
share(4) $ 0.47 $ 0.09
------- -------- ------- ------- ------- -------
Quarter Ended
-------------------------
Dec. 26, 2009
-------------------------
Foundry
segment
and
Intersegment
Eliminations AMD
AMD(2) (3) Non-GAAP
------- ------- -------
Net revenue $ 1,646 $ - $ 1,646
Cost of sales 911 (56) 967
------- ------- -------
Gross margin 735 56 679
Gross margin % 45% 41%
Research and
development 432 131 301
Marketing, general
and administrative 239 30 209
Legal settlement (1,242) (1,242)
Amortization of
acquired intangible
assets 18 18
Restructuring charges
(reversal) - -
------- ------- -------
Operating income
(loss) 1,288 (105) 1,393
Interest income 3 3
Interest expense (119) (48) (71)
Other income
(expense), net 19 6 13
------- ------- -------
Income (loss) before
equity in net income
(loss) of investee
and income taxes 1,191 (147) 1,338
Provision (benefit)
for income taxes 11 (9) 20
Equity in net income
(loss) of investee - - -
------- ------- -------
Income (loss) from
continuing
operations 1,180 (138) 1,318
Income (loss) from
discountinued
operations, net of
tax (3) - (3)
------- ------- -------
Net income (loss) $ 1,177 $ (138) $ 1,315
Net Income (loss)
attributable to
non-controlling
interest 23
Class B preferred
accretion (22)
------- ------- -------
Net income (loss)
attributable to AMD
common stockholders $ 1,178 $ 1,315
Non-GAAP diluted
earnings per
share(4) $ 1.69
------- ------- -------
Year Ended
----------------------------------------------------
Dec. 25, 2010 Dec. 26, 2009
------------------------- -------------------------
Foundry
segment
GF and
related Intersegment
adjustments AMD Eliminations AMD
AMD(2) (3) Non-GAAP AMD(2) (3) Non-GAAP
------- ------- ------- ------- ------- -------
Net revenue $ 6,494 $ - $ 6,494 $ 5,403 $ - $ 5,403
Cost of sales 3,533 (69) 3,602 3,131 (159) 3,290
------- ------- ------- ------- ------- -------
Gross margin 2,961 69 2,892 2,272 159 2,113
Gross margin % 46% 46% 42% 39%
Research and
development 1,405 - 1,405 1,721 524 1,197
Marketing, general
and administrative 934 - 934 994 116 878
Legal settlement (283) - (283) (1,242) - (1,242)
Amortization of
acquired intangible
assets 61 - 61 70 - 70
Restructuring charges
(reversal) (4) - (4) 65 - 65
------- ------- ------- ------- ------- -------
Operating income
(loss) 848 69 779 664 (481) 1,145
Interest income 11 - 11 16 1 15
Interest expense (199) - (199) (438) (152) (286)
Other income
(expense), net 311 325 (14) 166 (55) 221
------- ------- ------- ------- ------- -------
Income (loss) before
equity in net income
(loss) of investee
and income taxes 971 394 577 408 (687) 1,095
Provision (benefit)
for income taxes 38 - 38 112 136 (24)
Equity in net income
(loss) of investee (462) (462) - - - -
------- ------- ------- ------- ------- -------
Income (loss) from
continuing
operations 471 (68) 539 296 (823) 1,119
Income (loss) from
discountinued
operations, net of
tax - - - (3) - (3)
------- ------- ------- ------- ------- -------
Net income (loss) $ 471 $ (68) $ 539 $ 293 $ (823) $ 1,116
Net Income (loss)
attributable to
non-controlling
interest - 83
Class B preferred
accretion - (72)
------- ------- ------- ------- ------- -------
Net income (loss)
attributable to AMD
common stockholders $ 471 $ 539 $ 304 $ 1,116
Non-GAAP diluted
earnings per
share(4) $ 0.73 $ 1.60
------- ------- ------- ------- ------- -------
(1) From March 2, 2009 through December 26, 2009, the Company consolidated
the operating results of GLOBALFOUNDRIES Inc. (GF). Starting in the
first fiscal quarter of 2010 the Company began to account for its
investment in GF under the equity method of accounting. The Company
believes this non-GAAP presentation makes it easier for investors to
compare current and historical period operating results, by excluding
our portion GF's results of operations in the fourth and third fiscal
quarters of 2010 and the year ended December 25, 2010, and Foundry
segment and Intersegment Eliminations in the fourth fiscal quarter of
2009 and the year ended December 26, 2009.
(2) Starting in the first fiscal quarter of 2010, the Company began to
account for its investment in GF under the equity method of accounting.
From March 2, 2009 through December 26, 2009 the operating results of
GF were included in the Foundry segment.
(3) For the fourth and third quarters of 2010, the Company excluded Equity
in net income (loss) of investee. For the year ended December 25, 2010,
the Company also excluded the gain recognized on the fair value
assessment of its investment in GF upon deconsolidation, and the gross
margin benefit due to the deconsolidation of GF. For the fourth fiscal
quarter of 2009 and the year ended December 26, 2009, the Company
excluded the Foundry segment and Intersegment Eliminations consisting
of revenues, cost of sales, and profit on inventory between the
Computing Solutions and the Foundry segments.
(4) The outstanding diluted share amount for the non-GAAP diluted earnings
per share calculation for the fourth fiscal quarter of 2010 is
758 million shares, including the 24 million shares related to the
Company's 5.75% convertible notes. The outstanding diluted share
amounts for non-GAAP diluted earnings per share calculation for the
third fiscal quarter and year ended December 25, 2010 is 731 million
shares and 733 million shares, respectively. These share amounts
exclude the 24 million shares related to the Company's 5.75%
convertible notes because the inclusion of these shares would be
anti-dilutive.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
Dec. 25, Sept. 25, Dec. 26,
2010 2010 2009*
--------- --------- ---------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $ 1,789 $ 1,726 $ 2,676
Accounts receivable, net 968 765 745
Inventories, net 632 622 567
Deferred income taxes - - 9
Prepaid expenses and other current
assets 205 99 278
--------- --------- ---------
Total current assets 3,594 3,212 4,275
Property, plant and equipment, net 700 723 3,809
Acquisition related intangible assets, net 37 48 98
Goodwill 323 323 323
Other assets 310 289 573
--------- --------- ---------
Total Assets $ 4,964 $ 4,595 $ 9,078
========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 376 $ 464 $ 647
Accounts payable to GLOBALFOUNDRIES 205 216 -
Accrued liabilities 698 601 795
Deferred income on shipments to
distributors 143 137 121
Other short-term obligations 229 209 171
Current portion of long-term debt and
capital lease obligations 4 3 308
Other current liabilities 19 35 168
--------- --------- ---------
Total current liabilities 1,674 1,665 2,210
Deferred income taxes - - 197
Long-term debt and capital lease
obligations, less current portion 2,188 2,185 4,252
Other long-term liabilities 82 102 695
Noncontrolling interest - - 1,076
Accumulated loss in excess of investment
in GLOBALFOUNDRIES 7 29 -
Stockholders' equity:
Capital stock:
Common stock, par value 7 7 7
Capital in excess of par value 6,575 6,540 6,524
Treasury stock, at cost (102) (102) (98)
Retained earnings (deficit) (5,468) (5,843) (5,939)
Accumulated other comprehensive income 1 12 154
--------- --------- ---------
Total stockholders' equity 1,013 614 648
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 4,964 $ 4,595 $ 9,078
========= ========= =========
* Includes the account balances of GF which were deconsolidated as of the
beginning of the first quarter of 2010.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Quarter Year
Ended Ended
---------- ----------
Dec. 25, Dec. 25,
2010 2010
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 375 $ 471
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Equity in net income (loss) of investee (27) 462
Gain on deconsolidation of GLOBALFOUNDRIES - (325)
Depreciation and amortization 89 383
Compensation recognized under employee stock
plans 22 87
Non-cash interest expense 5 30
Loss on debt redemption - 24
Provision for deferred income taxes 7 5
Amortization of foreign grant (7) (16)
Net gain on sale of marketable securities (9) (17)
Other (13) (15)
Changes in operating assets and liabilities
(excludes the effects of deconsolidation):
Accounts receivable (465) (1,138)
Inventories (10) (144)
Prepaid expenses and other current assets (111) (97)
Other assets (2) 11
Accounts payable to GLOBALFOUNDRIES (11) 55
Income taxes payable (1) 2
Accounts payable, accrued liabilities and other (55) (190)
---------- ----------
Net cash used in operating activities (213) (412)
---------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment (38) (148)
Purchases of available-for-sale securities (485) (1,800)
Cash decrease due to deconsolidation of
GLOBALFOUNDRIES - (904)
Proceeds from sale of property, plant and
equipment - 1
Proceeds from sale and maturity of
available-for-sale securities 424 1,640
Proceeds from sale of trading securities - 69
Other (4) 19
---------- ----------
Net cash used in investing activities (103) (1,123)
---------- ----------
Cash flows from financing activities:
Proceeds from borrowings, net of issuance cost 297 1,520
Net proceeds from foreign grants 8 19
Proceeds from issuance of AMD common stock 6 15
Repayments of debt and capital lease obligations (16) (1,074)
Other 7 4
---------- ----------
Net cash provided by financing activities 302 484
---------- ----------
Net decrease in cash and cash equivalents (14) (1,051)
---------- ----------
Cash and cash equivalents at beginning of period 620 1,657
---------- ----------
Cash and cash equivalents at end of period $ 606 $ 606
---------- ----------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Quarter Ended Year Ended
---------------------------- ------------------
Segment and Category Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26,
Information 2010 2010 2009 2010 2009
--------- -------- -------- --------- --------
Computing Solutions (1)
Net revenue $ 1,219 $ 1,226 $ 1,220 $ 4,817 $ 4,170
Operating income
(loss) 91 164 161 529 142
Graphics (2)
Net revenue 424 390 421 1,663 1,167
Operating income
(loss) 68 1 50 149 35
All Other (3)
Net revenue 6 2 5 14 66
Operating income
(loss) 254 (37) 1,182 170 968
Subtotal (excludes
Foundry segment and
Intersegment
Eliminations)
Net revenue 1,649 1,618 1,646 6,494 5,403
Operating income
(loss) 413 128 1,393 848 1,145
Foundry (4)
Net revenue - - 309 - 1,101
Operating income
(loss) - - (99) - (433)
Intersegment Eliminations (5)
Net revenue - - (309) - (1,101)
Operating income
(loss) - - (6) - (48)
Total AMD
Net revenue $ 1,649 $ 1,618 $ 1,646 $ 6,494 $ 5,403
Operating income
(loss) $ 413 $ 128 $ 1,288 $ 848 $ 664
--------- -------- -------- --------- --------
Other Data
Depreciation and
amortization (excluding
amortization of acquired
intangible assets) $ 78 $ 79 $ 266 $ 322 $ 1,058
Capital additions $ 38 $ 31 $ 173 $ 148 $ 466
Headcount (excludes
Foundry segment) 11,068 11,021 10,352 11,068 10,352
AMD non-GAAP comparison*
Depreciation and
amortization
(excluding amortization
of acquired
intangible assets) $ 78 $ 79 $ 95 $ 322 $ 398
Capital additions $ 38 $ 31 $ 37 $ 148 $ 88
Adjusted EBITDA (6) $ 241 $ 245 $ 282 $ 1,031 $ 527
Cash, cash
equivalents and
marketable
securities (7) $ 1,789 $ 1,726 $ 1,772 $ 1,789 $ 1,772
Adjusted free cash
flow (8) $ 11 $ 91 N/A $ 355 N/A
Total assets (7) $ 4,964 $ 4,595 $ 4,846 $ 4,964 $ 4,846
Long-term debt and
capital lease
obligations (7) $ 2,192 $ 2,188 $ 2,607 $ 2,192 $ 2,607
--------- -------- -------- --------- --------
* 2009 periods exclude Foundry segment and Intersegment Eliminations
See footnotes on the next page
(1) Computing Solutions segment includes microprocessors, chipsets and
embedded processors.
(2) Graphics segment includes graphics, video and multimedia products
developed for use in desktop and notebook computers, including home
media PCs, professional workstations, servers and also includes
royalties received in connection with the sale of game console systems
that incorporate the Company's graphics technology.
(3) All Other category includes non-Foundry segment employee stock-based
compensation expense and certain operating expenses and credits that
are not allocated to the operating segments. Also included in this
category is a gross margin benefit from the deconsolidation of GF,
amortization of acquired intangible assets, restructuring charges and
GF formation costs. The All Other category also includes the results of
our Handheld business unit.
(4) In 2009, Foundry segment included the operating results attributable to
the front end wafer manufacturing operations and related activities as
of the beginning of the first quarter of 2009, which includes the
operating results of GF from March 2, 2009 to December 26, 2009.
Starting with the first quarter of 2010, the Company began to account
for its investment in GF under the equity method of accounting.
(5) In 2009, Intersegment Eliminations represented eliminations in
revenue and in cost of sales and profits on inventory between the
Computing Solutions segment and the Foundry segment. For the fiscal
quarter and the year ended December 26, 2009, intersegment eliminations
of revenue was $309 million and $1,101 million, respectively. For the
fiscal quarter and year ended December 26, 2009, intersegment
eliminations of cost of sales and profits on inventory was $303 million
and $1,053 million, respectively.
(6) AMD reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
Quarter Ended Year Ended
Q410 Q310 Q409 2010 2009
------- ------- -------- ------- -------
GAAP operating
income (loss) $ 413 $ 128 $ 1,288 $ 848 $ 664
Foundry segment
and Intersegment
Eliminations
operating loss - - 105 - 481
Legal settlement (283) - (1,242) (283) (1,242)
Depreciation and
amortization 78 79 95 322 398
Employee stock-based
compensation expense 22 22 18 87 70
Amortization of acquired
intangible assets 11 16 18 61 70
Restructuring charges
(reversals) - - - (4) 65
GF formation costs - - - - 21
------- ------- -------- ------- -------
Adjusted EBITDA $ 241 $ 245 $ 282 $ 1,031 $ 527
======= ======= ======== ======= =======
(7) Reconciliation of select balance sheet items
Quarter Ended
Q409
-------------------------------
Cash, cash Long-term
equivalents and debt and
marketable Total capital lease
securities Assets obligations**
AMD GAAP $ 2,676 $ 9,078 $ 4,560
Foundry segment
and
Intersegment
Eliminations (904) (4,232) (1,953)
--------- --------- ---------
AMD Non-GAAP $ 1,772 $ 4,846 $ 2,607
========= ========= =========
(8) Non-GAAP adjusted free cash flow reconciliation***
Quarter Ended Year Ended
Q410 Q310 2010
--------- --------- ---------
GAAP net cash
used in
operating
activities $ (213) $ (124) $ (412)
Non-GAAP
adjustment 262 246 915
--------- --------- ---------
Non-GAAP net
cash provided
by operating
activities 49 122 503
Purchases of
property,
plant and
equipment (38) (31) (148)
--------- --------- ---------
Non-GAAP
adjusted free
Cash Flow $ 11 $ 91 $ 355
========= ========= =========
* Starting with the quarter ended December 26, 2009, the Company presented
"Adjusted EBITDA" as a supplemental measure of its performance. Adjusted
EBITDA for the Company was determined by adjusting operating income
(loss) for depreciation and amortization, employee stock-based
compensation expense and amortization of acquired intangible assets. In
addition: for the fourth fiscal quarter of 2010, the Company included an
adjustment related to its legal settlement with a third party; for the
fourth fiscal quarter of 2009, the Company included an adjustment related
to its legal settlement with Intel and for Foundry segment and
Intersegment Eliminations operating loss; for fiscal 2010, the Company
included adjustments related to its legal settlement with a third party
and for certain restructuring reversals; and for fiscal 2009, the Company
included adjustments related to its legal settlement with Intel, Foundry
segment and Intersegment Eliminations operating loss, certain
restructuring charges and GF formation costs. The Company calculates and
communicates Adjusted EBITDA in the financial schedules because the
Company's management believes it is of importance to investors and
lenders in relation to its overall capital structure and its ability to
borrow additional funds. In addition, the Company presents Adjusted
EBITDA because it believes this measure assists investors in comparing
its performance across reporting periods on a consistent basis by
excluding items that the Company does not believe are indicative of its
core operating performance. The Company's calculation of Adjusted EBITDA
may or may not be consistent with the calculation of this measure by
other companies in the same industry. Investors should not view Adjusted
EBITDA as an alternative to the GAAP operating measure of operating
income (loss) or GAAP liquidity measures of cash flows from operating,
investing and financing activities. In addition, Adjusted EBITDA does not
take into account changes in certain assets and liabilities as well as
interest and income taxes that can affect cash flows.
** Long-term debt and capital lease obligations also includes the current
portion.
*** Starting in the first quarter of 2010, the Company presents non-GAAP
adjusted free cash flow as a supplemental measure of its performance.
In 2008 and 2009 the Company and certain of its subsidiaries
(collectively, the "AMD Parties") entered into supplier agreements with
IBM Credit LLC and certain of its subsidiaries, (collectively, the
"IBM Parties"). Pursuant to these supplier agreements, the AMD Parties
sell to the IBM Parties invoices of selected distributor customers.
Because the Company does not recognize revenue until its distributors
sell its products to their customers, under U.S. GAAP, the Company
classifies funds received from the IBM Parties as debt on the balance
sheet. Moreover, for cash flow purposes, these funds are classified as
cash flows from financing activities. When a distributor pays the
applicable IBM Party, the Company reduces the distributor's accounts
receivable and the corresponding debt resulting in a non-cash
accounting entry. Because the Company does not receive the cash from
the distributor to reduce the accounts receivable, the distributor's
payment is never reflected in the Company's cash flows from operating
activities. Non-GAAP adjusted free cash flow for the Company was
determined by adjusting GAAP net cash provided by (used in) operating
activities by adding the distributors' payments to the IBM Parties to
GAAP net cash provided by (used in) operating activities. This amount
is then further adjusted by subtracting capital expenditures.
Generally, under U.S. GAAP, the reduction in accounts receivable is
assumed to be a source of operating cash flows. Therefore, the Company
believes that treating the payments from its distributor customers to
the IBM Parties as if the Company actually received the cash from the
distributor and then used that cash to pay down the debt is more
reflective of the economic substance of the transaction. The Company
calculates and communicates non-GAAP adjusted free cash flow in the
financial schedules because the Company's management believes it is of
importance to investors to understand the nature of these cash flows.
The Company's calculation of non-GAAP Adjusted free cash flow may or
may not be consistent with the calculation of this measure by other
companies in the same industry. Investors should not view non-GAAP
Adjusted Free Cash Flow as an alternative to GAAP liquidity measures of
cash flows from operating or financing activities.
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Media Contact Drew Prairie 512-602-4425 Email Contact Investor Contact Ruth Cotter 408-749-3887 Email Contact
Source: Advanced Micro Devices
Released January 20, 2011