AMD Reports Third Quarter Results
SUNNYVALE, CA -- (MARKET WIRE) -- 10/14/10 -- AMD (NYSE: AMD)
- AMD revenue $1.62 billion, 2 percent sequential decrease and 16 percent increase year-over-year
- Net loss $118 million, net loss per share $0.17, operating income $128 million
- Non-GAAP(1,2) net income $108 million, EPS $0.15, operating income $144 million
- Gross margin 46 percent
AMD (NYSE: AMD) today announced revenue for the third quarter of 2010 of $1.62 billion, a net loss of $118 million, or $0.17 per share, and operating income of $128 million. The company reported non-GAAP net income of $108 million, or $0.15 per share, and non-GAAP operating income of $144 million.
"AMD's third quarter performance was highlighted by solid gross margin and a continued focus on profitability, despite weaker than expected consumer demand," said Dirk Meyer, AMD president and CEO. "Our strategy to deliver platforms with superior visual experiences continues to resonate. We look forward to building on this momentum when we begin shipping our first AMD Fusion Accelerated Processor Units later this quarter."
GAAP Financial Results
Q3-10 Q2-10 Q3-09
-------------- -------------- --------------
Revenue $1.62B $1.65B $1.40B
-------------- -------------- --------------
Operating income (loss) $128M $125M $(77)M
-------------- -------------- --------------
Net loss attributable to
AMD common stockholders/
loss per share $(118)M/$(0.17) $ (43)M/$(0.06) $(128)M/$(0.18)
-------------- -------------- --------------
Non-GAAP Financial Results(1)
Q3-10 Q2-10 Q3-09
-------------- -------------- --------------
Revenue $1.62B $1.65B $1.40B
-------------- -------------- --------------
Operating income $144M $138M $47M
-------------- -------------- --------------
Net income / Earnings
per share $108M/$0.15 $83M/$0.11 $2M/$0.00
-------------- -------------- --------------
Quarterly Summary
- Gross margin was 46 percent.
- Cash, cash equivalents and marketable securities balance at the end of the quarter was $1.73 billion. The decrease from the second quarter was primarily due to the repurchase of $800 million aggregate principal amount of 6.00% Convertible Senior Notes due 2015 offset by proceeds from our issuance of $500 million of 7.75% Senior Notes due 2020.
- Approximately $780 million of the 6.00% Convertible Senior Notes remained outstanding as of September 25, 2010.
- Computing Solutions segment revenue was flat sequentially and up 13 percent year-over-year. The year-over-year increase was primarily driven by record notebook microprocessor unit shipments.
- Operating income was $164 million, compared with $128 million in Q2-10 and $82 million in Q3-09.
- Microprocessor average selling price (ASP) decreased slightly sequentially and increased year-over-year.
- AMD updated its desktop processor family with six new offerings, including the six-core AMD Phenom II X6 1075 processor with high-end features like Turbo CORE acceleration technology, and the unlocked, quad-core AMD Phenom II X2 560 Black Edition processor which enables performance-tuning capabilities.
- IBM joined the ranks of global customers offering AMD Opteron 6000 series platform-based systems. In total, more than 40 unique AMD Opteron 6000 series-based platforms are now available from leading server manufacturers, including the HP ProLiant DL385 G7, the Dell PowerEdge R815, and many others.
- AMD released significant technical details of two new x86 cores during the quarter. "Bulldozer" targets high-performance PC and server markets, while "Bobcat" is intended for low-power notebook and desktop markets. Both cores were designed from the ground up to address specific customer requirements and compute workloads.
- AMD demonstrated "Brazos", the upcoming platform combining low-power x86 processor cores and discrete-level graphics capabilities in a single AMD Fusion Accelerated Processing Unit (APU). "Brazos" platforms will feature the "Ontario" and "Zacate" APUs and are expected to bring many of the vivid digital computing experiences once reserved for high-end PCs to value and mainstream notebooks and desktops early next year.
- Graphics segment revenue decreased 11 percent sequentially but increased 33 percent year-over-year. The sequential decrease was driven by decreased mobile graphics processor unit (GPU) unit shipments and decreased ASP. The year-over-year increase was driven by an increase in GPU unit shipments and ASP.
- Operating income was $1 million, compared with $33 million in Q2-10 and $2 million in Q3-09.
- AMD has shipped more than 25 million DirectX11-capable GPUs since introduction in September 2009.
- AMD launched the ATI FirePro V9800, the company's flagship professional graphics card and the industry's only single-card solution for driving up to six monitors at a time.
- Apple refreshed its iMac and Mac Pro desktop computers, making ATI Radeon cards the only graphics solution for all configurations of these products.
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.
AMD expects revenue to be approximately flat sequentially for the fourth quarter of 2010.
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 third quarter 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) Q3-10 Q2-10 Q3-09
-------------- -------------- --------------
GAAP net income (loss)
attributable to AMD common
stockholders / Earnings
(loss) per share $ (118) $(0.17) $ (43) $(0.06) $ (128) $(0.18)
------ ------ ------ ------ ------ ------
Net impact of GF/Foundry
segment related items* (186) (0.25) (120) (0.16) (191) (0.27)
------ ------ ------ ------ ------ ------
Net (income) loss
attributable to
noncontrolling interest - - - - 29 0.04
------ ------ ------ ------ ------ ------
Class B preferred accretion - - - - (22) (0.03)
------ ------ ------ ------ ------ ------
Non-GAAP net income (loss)
excluding GF/Foundry
segment related items 68 0.09 77 0.11 56 0.08
------ ------ ------ ------ ------ ------
Gross margin benefit from
sales of inventory
written down in Q4-08 - - - - 9 0.01
------ ------ ------ ------ ------ ------
Amortization of acquired
intangible assets (16) (0.02) (17) (0.02) (17) (0.02)
------ ------ ------ ------ ------ ------
Restructuring (charges)
reversals - - 4 0.01 (4) (0.01)
------ ------ ------ ------ ------ ------
Gain on investment sale - - 7 0.01 - -
------ ------ ------ ------ ------ ------
Gain (loss) on debt
redemption (24) (0.03) - - 66 0.10
------ ------ ------ ------ ------ ------
Non-GAAP net income
(loss) / Earnings
(loss) per share $ 108 $ 0.15 $ 83 $ 0.11 $ 2 $ 0.00
------ ------ ------ ------ ------ ------
* Q3-10 and Q2-10 consist of equity losses related to GF. Q3-09 consists
of the Foundry segment and Intersegment Eliminations loss.
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) 1,3
(Millions) Q3-10 Q2-10 Q3-09
------ ------ ------
GAAP operating income (loss) $ 128 $ 125 $ (77)
------ ------ ------
Gross margin benefit from sales of inventory
written down in Q4-08 - - 9
------ ------ ------
Amortization of acquired intangible assets (16) (17) (17)
------ ------ ------
Restructuring (charges) reversals - 4 (4)
------ ------ ------
Operating income (loss) from Foundry segment and
Intersegment Eliminations - - (112)
------ ------ ------
Non-GAAP operating income (loss) $ 144 $ 138 $ 47
------ ------ ------
Reconciliation of GAAP to Non-GAAP Gross Margin 1,3
(Millions, except percentages) Q3-10 Q2-10 Q3-09
------ ------ ------
GAAP Gross Margin $ 739 $ 738 $ 585
------ ------ ------
GAAP Gross Margin % 46% 45% 42%
------ ------ ------
Gross margin benefit from sales of inventory
written down in Q4-08 - - 9
------ ------ ------
Gross margin from Foundry segment and
Intersegment Eliminations - - 49
------ ------ ------
Non-GAAP Gross Margin $ 739 $ 738 $ 527
------ ------ ------
Non-GAAP Gross Margin % 46% 45% 38%
------ ------ ------
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 AMD.
Cautionary Statement
This release contains forward-looking statements concerning AMD, its fourth
quarter 2010 revenue, the timing of the launch and ramp of new products and
technologies and the features of these 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 fourth quarter of 2010 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; 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 June 26, 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 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 Nine Months Ended
------------------------------ -------------------
Sept. 25, June 26, Sept. 26, Sept. 25, Sept. 26,
2010 2010 2009 2010 2009
--------- -------- --------- --------- --------
Net revenue $ 1,618 $ 1,653 $ 1,396 $ 4,845 $ 3,757
Cost of sales 879 915 811 2,627 2,220
--------- -------- --------- --------- --------
Gross margin 739 738 585 2,218 1,537
Gross margin % 46% 45% 42% 46% 41%
Research and
development 359 371 420 1,053 1,289
Marketing, general and
administrative 236 229 221 684 755
Amortization of
acquired intangible
assets 16 17 17 50 52
Restructuring charges
(reversal) - (4) 4 (4) 65
--------- -------- --------- --------- --------
Operating income
(loss) 128 125 (77) 435 (624)
Interest income 3 3 4 9 13
Interest expense (56) (55) (114) (160) (319)
Other income
(expense), net (6) (1) 47 297 147
--------- -------- --------- --------- --------
Income (loss) before
equity in net income
(loss) of investee
and income taxes 69 72 (140) 581 (783)
Provision (benefit)
for income taxes 1 (5) (5) (4) 101
Equity in net income
(loss) of investee (186) (120) - (489) -
--------- -------- --------- --------- --------
Net income (loss) $ (118) $ (43) $ (135) $ 96 $ (884)
Net (income) loss
attributable to
noncontrolling
interest - - 29 - 60
Class B preferred
accretion - - (22) - (50)
--------- -------- --------- --------- --------
Net income (loss)
attributable to AMD
common stockholders $ (118) $ (43) $ (128) $ 96 $ (874)
--------- -------- --------- --------- --------
Net income (loss)
attributable to AMD
common stockholders
per common share
Basic $ (0.17) $ (0.06) $ (0.18) $ 0.13 $ (1.32)
Diluted $ (0.17) $ (0.06) $ (0.18) $ 0.13 $ (1.32)
--------- -------- --------- --------- --------
Shares used in per
share calculation
Basic 713 709 694 710 662
Diluted 713 709 694 732 662
ADVANCED MICRO DEVICES, INC.
AMD NON-GAAP AND RECONCILIATIONS TO
CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(Millions except per share amounts and percentages)
Quarter Ended
----------------------------------------------------------
Sept. 25, 2010 June 26, 2010
---------------------------- ----------------------------
GF GF
related related
adjustments AMD adjustments AMD
AMD(2) (3) Non-GAAP AMD(2) (3) Non-GAAP
-------- -------- -------- -------- -------- --------
Net revenue $ 1,618 $ - $ 1,618 $ 1,653 $ - $ 1,653
Cost of sales 879 - 879 915 - 915
-------- -------- -------- -------- -------- --------
Gross margin 739 - 739 738 - 738
Gross margin % 46% 46% 45% 45%
Research and
development 359 - 359 371 - 371
Marketing,
general and
administrative 236 - 236 229 - 229
Amortization of
acquired
intangible
assets 16 - 16 17 - 17
Restructuring
charges
(reversal) - - - (4) - (4)
-------- -------- -------- -------- -------- --------
Operating
income (loss) 128 - 128 125 - 125
Interest income 3 - 3 3 - 3
Interest
expense (56) - (56) (55) - (55)
Other income
(expense), net (6) - (6) (1) - (1)
-------- -------- -------- -------- -------- --------
Income (loss)
before equity
in net income
(loss) of
investee and
income taxes 69 - 69 72 - 72
Provision
(benefit) for
income taxes 1 - 1 (5) - (5)
Equity in net
income (loss)
of investee (186) (186) - (120) (120) -
-------- -------- -------- -------- -------- --------
Net income
(loss) $ (118) $ (186) $ 68 $ (43) $ (120) $ 77
Net Income
(loss)
attributable
to non-
controlling
interest - -
Class B
preferred
accretion - -
-------- -------- -------- -------- -------- --------
Net income
(loss)
attributable
to AMD common
stockholders $ (118) $ 68 $ (43) $ 77
Non-GAAP
diluted
earnings per
share(4) $ 0.09 $ 0.11
-------- -------- -------- -------- -------- --------
Quarter Ended
----------------------------
Sept. 26, 2009
----------------------------
Foundry
segment
and
Intersegment
Eliminations AMD
AMD(2) (3) Non-GAAP
-------- -------- --------
Net revenue $ 1,396 $ - $ 1,396
Cost of sales 811 (49) 860
-------- -------- --------
Gross margin 585 49 536
Gross margin % 42% 38%
Research and
development 420 135 285
Marketing,
general and
administrative 221 26 195
Amortization of
acquired
intangible
assets 17 - 17
Restructuring
charges
(reversal) 4 - 4
-------- -------- --------
Operating
income (loss) (77) (112) 35
Interest income 4 1 3
Interest
expense (114) (44) (70)
Other income
(expense), net 47 (17) 64
-------- -------- --------
Income (loss)
before equity
in net income
(loss) of
investee and
income taxes (140) (172) 32
Provision
(benefit) for
income taxes (5) 19 (24)
Equity in net
income (loss)
of investee - - -
-------- -------- --------
Net income
(loss) $ (135) $ (191) $ 56
Net Income
(loss)
attributable
to non-
controlling
interest 29
Class B
preferred
accretion (22)
-------- -------- --------
Net income
(loss)
attributable
to AMD common
stockholders $ (128) $ 56
Non-GAAP
diluted
earnings per
share(4) $ 0.08
-------- -------- --------
Nine Months Ended
--------------------------------------------------------
Sept. 25, 2010 Sept. 26, 2009
--------------------------- ---------------------------
Foundry
GF segment and
related Intersegment
AMD adjustments AMD AMD Eliminations AMD
(2) (3) Non-GAAP (2) (3) Non-GAAP
------- --------- ------- ------- --------- -------
Net revenue $ 4,845 - $ 4,845 $ 3,757 $ - $ 3,757
Cost of sales 2,627 (69) 2,696 2,220 (103) 2,323
------- --------- ------- ------- --------- -------
Gross margin 2,218 69 2,149 1,537 103 1,434
Gross margin % 46% 44% 41% 38%
Research and
development 1,053 - 1,053 1,289 393 896
Marketing,
general and
administrative 684 - 684 755 86 669
Amortization of
acquired
intangible
assets 50 - 50 52 - 52
Restructuring
charges
(reversal) (4) - (4) 65 - 65
------- --------- ------- ------- --------- -------
Operating income
(loss) 435 69 366 (624) (376) (248)
Interest income 9 - 9 13 1 12
Interest expense (160) - (160) (319) (104) (215)
Other income
(expense), net 297 325 (28) 147 (61) 208
------- --------- ------- ------- --------- -------
Income (loss)
before equity in
net income
(loss) of
investee and
income taxes 581 394 187 (783) (540) (243)
Provision
(benefit) for
income taxes (4) - (4) 101 145 (44)
Equity in net
income (loss) of
investee (489) (489) - - - -
------- --------- ------- ------- --------- -------
Net income (loss) $ 96 $ (95) $ 191 $ (884) $ (685) $ (199)
Net Income (loss)
attributable to
non-controlling
interest - 60
Class B preferred
accretion - (50)
------- --------- ------- ------- --------- -------
Net income (loss)
attributable to
AMD common
stockholders $ 96 $ 191 $ (874) $ (199)
Non-GAAP diluted
earnings per
share(4) $ 0.26 $ (0.30)
------- --------- ------- ------- --------- -------
(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
the results of operations of GF in the third and second fiscal quarters
of 2010 and the nine months ended September 25, 2010, and Foundry
segment and Intersegment Eliminations in the third fiscal quarter of
2009 and nine months ended September 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 third and second fiscal quarters of 2010, the Company excluded
Equity in net income (loss) of investee. For the nine months ended
September 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
third fiscal quarter of 2009 and the nine months ended September 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 third fiscal quarter of 2010, the second
fiscal quarter of 2010, and the nine month period ended September 25,
2010 are 731 million shares, 733 million shares, and 732 million
shares, respectively. These share amounts exclude the 24 million
shares issuable upon conversion of 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)
Sept. 25, June 26, Dec. 26,
2010 2010 2009*
--------- --------- ---------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $ 1,726 $ 1,896 $ 2,676
Accounts receivable, net 765 725 745
Inventories, net 622 581 567
Deferred income taxes - - 9
Prepaid expenses and other current
assets 99 111 278
--------- --------- ---------
Total current assets 3,212 3,313 4,275
Property, plant and equipment, net 723 755 3,809
Investment in GLOBALFOUNDRIES - 148 -
Acquisition related intangible assets, net 48 64 98
Goodwill 323 323 323
Other assets 289 352 573
--------- --------- ---------
Total Assets $ 4,595 $ 4,955 $ 9,078
========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 464 $ 409 $ 647
Accounts payable to GLOBALFOUNDRIES 216 213 -
Accrued liabilities 601 663 795
Deferred income on shipments to
distributors 151 148 138
Other short-term obligations 209 159 171
Current portion of long-term debt and
capital lease obligations 3 3 308
Other current liabilities 21 35 151
--------- --------- ---------
Total current liabilities 1,665 1,630 2,210
Deferred income taxes - 1 197
Long-term debt and capital lease
obligations, less current portion 2,185 2,418 4,252
Other long-term liabilities 102 154 695
Noncontrolling interest - - 1,076
Accumulated loss in excess of investment
in GLOBALFOUNDRIES 29 - -
Stockholders' equity:
Capital stock:
Common stock, par value 7 7 7
Capital in excess of par value 6,540 6,562 6,524
Treasury stock, at cost (102) (99) (98)
Retained earnings (deficit) (5,843) (5,725) (5,939)
Accumulated other comprehensive income 12 7 154
--------- --------- ---------
Total stockholders' equity 614 752 648
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 4,595 $ 4,955 $ 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)
Nine
Quarter Months
Ended Ended
--------- ---------
Sept. 25, Sept. 25,
2010 2010
--------- ---------
Cash flows from operating activities:
Net income (loss) $ (118) $ 96
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Equity in net income (loss) of investee 186 489
Gain on deconsolidation of GLOBALFOUNDRIES - (325)
Depreciation and amortization 95 294
Compensation recognized under employee stock plans 22 65
Non-cash interest expense 8 25
Loss on debt redemption 24 24
Provision (benefit) for deferred income taxes 9 (2)
Amortization of foreign grant (5) (9)
Net (gain) on sale of marketable securities - (8)
Other - (2)
Changes in operating assets and liabilities
(excludes the effects of deconsolidation):
Accounts receivable (285) (673)
Inventories (41) (134)
Prepaid expenses and other current assets (5) 14
Other assets (1) 13
Accounts payable to GLOBALFOUNDRIES 3 66
Income taxes payable (2) 3
Accounts payable, accrued liabilities and other (14) (135)
--------- ---------
Net cash provided by (used in) operating activities (124) (199)
--------- ---------
Cash flows from investing activities:
Purchases of property, plant and equipment (31) (110)
Purchases of available-for-sale securities (647) (1,315)
Net cash impact of change in status of
GLOBALFOUNDRIES from consolidated entity to
unconsolidated investee - (904)
Proceeds from sale of property, plant and equipment - 1
Proceeds from sale and maturity of
available-for-sale securities 315 1,224
Proceeds from sale of trading securities 36 61
Other 6 23
--------- ---------
Net cash provided by (used in) investing activities (321) (1,020)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings, net of issuance cost 800 1,223
Net proceeds from foreign grants - 11
Proceeds from issuance of AMD common stock 2 9
Repayments of debt and capital lease obligations (818) (1,058)
Other (3) (3)
--------- ---------
Net cash provided by (used in) financing activities (19) 182
--------- ---------
Net increase (decrease) in cash and cash equivalents (464) (1,037)
--------- ---------
Cash and cash equivalents at beginning of period 1,084 1,657
--------- ---------
Cash and cash equivalents at end of period $ 620 $ 620
--------- ---------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Quarter Ended Nine Months Ended
------------------------- ----------------
Sept. June Sept. Sept. Sept.
Segment and Category 25, 26, 26, 25, 26,
Information 2010 2010 2009 2010 2009
------- ------- ------- ------- -------
Computing Solutions (1)
Net revenue $ 1,226 $ 1,212 $ 1,082 $ 3,598 $ 2,950
Operating income (loss) 164 128 82 438 (19)
Graphics (2)
Net revenue 390 440 293 1,239 746
Operating income (loss) 1 33 2 81 (15)
All Other (3)
Net revenue 2 1 21 8 61
Operating income (loss) (37) (36) (49) (84) (214)
Subtotal (excludes Foundry
segment and Intersegment
Eliminations)
Net revenue 1,618 1,653 1,396 4,845 3,757
Operating income (loss) 128 125 35 435 (248)
Foundry (4)
Net revenue - - 256 - 792
Operating income (loss) - - (101) - (334)
Intersegment Eliminations (5)
Net revenue - - (256) - (792)
Operating income (loss) - - (11) - (42)
Total AMD
Net revenue $ 1,618 $ 1,653 $ 1,396 $ 4,845 $ 3,757
Operating income (loss) $ 128 $ 125 $ (77) $ 435 $ (624)
------- ------- ------- ------- -------
Other Data
Depreciation and amortization
(excluding amortization
of acquired intangible
assets) $ 79 $ 83 $ 265 $ 244 $ 792
Capital additions $ 31 $ 31 $ 97 $ 110 $ 293
Headcount (excludes Foundry
segment) 11,021 10,649 10,412 11,021 10,412
AMD non-GAAP comparison*
Depreciation and
amortization
(excluding
amortization of
acquired intangible
assets) $ 79 $ 83 $ 96 $ 244 $ 303
Capital additions $ 31 $ 31 $ 19 $ 110 $ 51
Adjusted EBITDA (6) $ 245 $ 244 $ 169 $ 790 $ 245
Cash, cash equivalents
and marketable
securities (7) $ 1,726 $ 1,896 $ 1,536 $ 1,726 $ 1,536
Adjusted free cash flow
(8) $ 91 $ 76 N/A $ 344 N/A
Total assets (7) $ 4,595 $ 4,955 $ 4,376 $ 4,595 $ 4,376
Long-term debt and
capital lease
obligations(7) $ 2,188 $ 2,421 $ 3,541 $ 2,188 $ 3,541
------- ------- ------- ------- -------
* 2009 periods exclude Foundry segment and Intersegment Eliminations
See footnotes below.
(1) Computing Solutions segment includes microprocessors, chipsets and
embedded processors.
(2) Graphics segment includes graphics, video and multimedia products
and related revenue as well as revenue received in connection with
the development and 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
(reversals) 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 nine months ended September 26, 2009, Intersegment
Eliminations of revenue was $256 million and $792 million,
respectively. For the fiscal quarter and nine months ended September
26, 2009, Intersegment Eliminations of cost of sales and profits on
inventory was $245 million and $750 million, respectively.
(6) AMD reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
Quarter Ended Nine Months Ended
Q310 Q210 Q309 Q310 Q309
--------- --------- --------- --------- ---------
GAAP operating
income (loss) $ 128 $ 125 $ (77) $ 435 $ (624)
Foundry
segment and
Intersegment
Eliminations
operating
loss - - 112 - 376
Depreciation
and
amortization 79 83 96 244 303
Employee
stock-based
compensation
expense 22 23 17 65 52
Amortization
of acquired
intangible
assets 16 17 17 50 52
Restructuring
charges
(reversals) - (4) 4 (4) 65
GF formation
costs - - - - 21
--------- --------- --------- --------- ---------
Adjusted EBITDA $ 245 $ 244 $ 169 $ 790 $ 245
========= ========= ========= ========= =========
- - - - -
(7) Reconciliation of select balance sheet items
Quarter Ended
Q309
-------------------------------
Cash, cash
equivalents Long-term
and debt and
marketable Total capital lease
securities Assets obligations**
AMD GAAP $ 2,511 $ 8,747 $ 5,570
Foundry segment
and Intersegment
Eliminations (975) (4,371) (2,029)
--------- --------- ---------
AMD Non-GAAP $ 1,536 $ 4,376 $ 3,541
========= ========= =========
(8) Non-GAAP adjusted free cash flow reconciliation***
Quarter Ended
Q310 Q210
--------- ---------
GAAP net cash
provided by
(used in)
operating
activities $ (124) $ (98)
Non-GAAP
adjustment 246 205
--------- ---------
Non-GAAP net
cash provided
by (used in)
operating
activities 122 107
Purchases of
property,
plant and
equipment (31) (31)
--------- ---------
Non-GAAP
adjusted free
Cash Flow $ 91 $ 76
========= =========
*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 second quarter of 2010 and the nine months ended September 25, 2010,
the Company further included an adjustment for certain restructuring
reversals. For the third quarter and nine months ended September 26, 2009,
the Company further included adjustments for the Foundry segment and
Intersegment Eliminations operating loss and restructuring charges, and for
the nine months ended September 26, 2009, the Company further included an
adjustment for 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
Released October 14, 2010