AMD Reports Fourth Quarter and Annual Results
SUNNYVALE, Calif.--(BUSINESS WIRE)-- AMD (NYSE:AMD) today reported fourth quarter 2008 revenue from continuing operations1 of $1.162 billion. Fourth quarter 2008 revenue decreased 35 percent compared to the third quarter of 2008 and 33 percent compared to the fourth quarter of 2007. Fourth quarter 2008 revenue was down 28 percent sequentially, excluding third quarter 2008 process technology license revenue of $191 million.
In the fourth quarter of 2008, AMD reported a net loss of $1.424 billion, or $2.34 per share. For continuing operations, fourth quarter 2008 loss was $1.414 billion, or $2.32 per share, and the operating loss was $1.274 billion. The results for continuing operations include an unfavorable impact of $996 million, or $1.64 per share as described in the table below. Loss from discontinued operations was $10 million, or $0.02 a share.
For the year ended December 27, 2008, AMD achieved revenue of $5.808 billion. Fiscal 2008 net loss was $3.098 billion. AMD reported revenue of $5.858 billion and a net loss of $3.379 billion for fiscal 2007.
Reconciliation of GAAP to Non-GAAP Net Loss1, 2, 3 (Millions except Q4-08 Q3-08 Q4-07 per share amounts) GAAP net loss / EPS $ (1,424 ) $ (2.34 ) $ (127 ) $ (0.21 ) $ (1,772 ) $ (3.06 ) Loss from discontinued (10 ) (0.02 ) (150 ) (0.25 ) (474 ) (0.82 ) operations Income (loss) from continuing (1,414 ) (2.32 ) 23 0.04 (1,298 ) (2.24 ) operations ATI impairment of goodwill and (684 ) (1.12 ) (2 ) - (1,132 ) (1.96 ) acquired intangible assets Incremental write-down of (227 ) (0.37 ) - - - - inventory Process technology - - 191 0.31 - - license revenue Marketable securities net (21 ) (0.03 ) (9 ) (0.01 ) (69 ) (0.12 ) impairment charges Amortization of acquired intangibles, (30 ) (0.05 ) (30 ) (0.05 ) (50 ) (0.09 ) integration and other charges Restructuring (50 ) (0.08 ) (9 ) (0.01 ) - - charges Tax benefit from ATI - - - - 46 0.08 acquisition-related charges The Foundry Company (23 ) (0.04 ) (4 ) (0.01 ) (3 ) (0.01 ) formation costs Gain on debt 39 0.06 - - - - buyback Non-GAAP net loss $ (418 ) $ (114 ) $ (90 )
Reconciliation of GAAP to Non-GAAP Operating Income (Loss)1, 2, 3 (Millions) Q4-08 Q3-08 Q4-07 GAAP operating income (loss) $ (1,274 ) $ 122 $ (1,187 ) ATI impairment of goodwill and acquired (684 ) (2 ) (1,132 ) intangible assets Incremental write-down of inventory (227 ) - - Process technology license revenue - 191 - Amortization of acquired intangibles, (30 ) (30 ) (50 ) integration and other charges Restructuring charges (50 ) (9 ) - The Foundry Company formation costs (23 ) (4 ) (3 ) Cost of fair value adjustment of acquired - - - inventory Non-GAAP operating loss $ (260 ) $ (24 ) $ (2 )
In the third quarter of 2008, AMD had revenue from continuing operations of $1.797 billion, including process technology license revenue of $191 million, a net loss of $127 million, income from continuing operations of $23 million and operating income of $122 million. In the fourth quarter of 2007, AMD had revenue from continuing operations of $1.737 billion, a net loss of $1.772 billion, a loss from continuing operations of $1.298 billion and an operating loss of $1.187 billion.
"Although industry visibility is poor, our priorities remain clear and achievable," said Dirk Meyer, AMD's president and CEO. "We remain focused on further reducing our breakeven point through targeted restructuring actions while ensuring we execute our highly-competitive product and technology roadmaps. We made significant progress toward the creation of 'The Foundry Company' in the quarter, and anticipate closing the transaction in February. We expect our ongoing restructuring actions and asset smart strategy, combined with the strength of our innovative product offerings, will leave us well positioned for a global market recovery."
Fourth quarter 2008 gross margin was 23 percent, including a negative impact of 20 percentage points due to a $227 million incremental write down of inventory due to weak market conditions. Third quarter 2008 gross margin was 51 percent, 45 percent excluding process technology license revenue.
Reconciliation of GAAP to Non-GAAP Gross Margin2, 3 (Millions, except percentages) Q4-08 Q3-08 Q4-07 GAAP Gross Margin $ 272 $ 916 $ 769 GAAP Gross Margin % 23 % 51 % 44 % Incremental write-down of inventory (227 ) - - Process technology license revenue - 191 - Non-GAAP Gross Margin $ 499 $ 725 $ 769 Non-GAAP Gross Margin %* 43 % 45 % 44 % *For Q3-08 the revenue number used in the gross margin percent calculation excludes $191 million of process technology license revenue Segment Information3 (Millions) Q4-08 vs Q3-08 vs Q4-07 Computing Solutions (including process technology license revenue in Q3-08) Revenue $ 873 -37 % -38 % Microprocessor Units down down Microprocessor Average Selling Prices (ASP) down down Graphics(including game console royalties) Revenue $ 270 -30 % -8 % Graphic Processor Units down down Graphic Processor Average Selling Prices (ASP) up up
Current Outlook
AMD's outlook statements are based on current expectations of its continuing operations. 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.
In light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter 2008.
Additional Highlights
-- The formation of 'The Foundry Company' remains on track to close in
February. AMD and the Advanced Technology Investment Company (ATIC)
obtained clearance from the Committee on Foreign Investment in the
United States ("CFIUS") regarding the creation of "The Foundry Company".
In addition, the Empire State Development Corporation and the New York
Public Authorities Control Board approved the transfer of development
incentives from AMD to "The Foundry Company."
-- AMD announced the widespread availability and broad OEM, ISV, channel
and system builder support for its 45nm Quad-Core AMD Opteron(TM)
processor. HP, Dell, IBM and Sun Microsystems introduced more than a
dozen new systems designed to take advantage of the new Quad-Core AMD
Opteron(TM) processor's superior virtualization performance,
energy-efficiency and platform stability. Additionally, Microsoft(R)
selected the new AMD processor for its Windows(R) Azure(TM) cloud
computing service.
o Quad-Core AMD Opteron processor-based servers captured the top VMmark
virtualization performance scores for 2-, 4- and 8-socket servers
while two-socket servers based on the new processor have achieved the
four highest SPECweb2005 scores. SPECweb2005 is a leading performance
indicator for Web 2.0 and Cloud Computing environments.
-- AMD Opteron processors now help drive seven of the Top 10 supercomputer
systems in the world, including "Jaguar," the first ever wholly
x86-based supercomputer to achieve the petaflop performance milestone.
-- AMD announced the availability of the AMD platform for ultrathin
notebooks, codenamed "Yukon", based on the new AMD Athlon(TM) Neo
processor, ATI Radeon(TM) X1250 integrated graphics and optional ATI
Mobility Radeon(TM) HD 3410 discrete graphics. The first product
offering based on the Yukon platform will be the HP Pavilion dv2
Entertainment Notebook PC, which was named "Best Notebook of CES" by
Laptop magazine and is expected to be available in April.
-- AMD launched the "Dragon" platform for desktop PCs, featuring the new
AMD Phenom(TM) II X4 processor. HP, Dell and Alienware plan to offer
desktop systems based on the Dragon platform in the first quarter.
-- AMD continued to strengthen its leading-edge mobile graphics portfolio,
with the introduction of the ATI Mobility Radeon 4000, the world's first
TeraFLOPS class visual compute power in a notebook. Asus, MSI and
Toshiba all introduced new ATI Mobility Radeon 4000-powered laptops.
Additionally, Alienware and OCZ both released notebooks utilizing AMD's
CrossfireX(TM)dual-GPU configurations based on the ATI Radeon HD 3800
series.
-- AMD expanded ATI Radeon(TM) HD 4800 series with the launch of the ATI
Radeon HD 4830, which delivers exceptional game performance and is
designed for an expanded PC gaming market segment.
-- AMD announced plans to create, in partnership with OTOY, the "AMD Fusion
Render Cloud", a petaFLOPS-class supercomputer designed to process and
electronically distribute HD video and gaming content to thin clients
and handheld devices via HTML browsers when completed in the second half
of 2009.
-- As part of the Company's strategy to focus on x86 computing and graphics
technologies, AMD completed the sale of its Digital TV (DTV) processor
business to Broadcom Corporation for $141.5 million in cash and the sale
of technology assets, intellectual property and resources that formed
the basis of its Handheld business to Qualcomm for $65 million in cash.
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 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.
About AMD
Advanced Micro Devices (NYSE:AMD) is an innovative technology company dedicated to collaborating with customers and 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 the expected closing of The Foundry Company joint venture and the increased investment by the Mubadala Development Company, first quarter 2009 revenue, and the company's breakeven goals, restructuring actions, asset smart strategy and its future products and technologies, 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 first quarter of 2009 and beyond; the company's Asset Smart strategy will not reach fruition or will be less beneficial than anticipated; the announced transaction for the formation of The Foundry Company and the associated fourth-party investment will not occur as anticipated; 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's restructuring efforts will not be effective; 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 to advanced manufacturing process technologies in a timely and effective way, consistent with planned capital expenditures; 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 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 27, 2008.
AMD, the AMD Arrow logo, AMD Opteron, AMD Phenom, AMD Athlon and combinations thereof, and ATI, the ATI logo, FireGL, CrossFireX 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.
Reconciliation of GAAP to Non-GAAP Net Loss 1, 2 (Millions except Q4-08 Q3-08 Q4-07 2008 2007 per share amounts) GAAP net loss / EPS $ (1,424 ) $ (2.34 ) $ (127 ) $ (0.21 ) $ (1,772 ) $ (3.06 ) $ (3,098 ) $ (5.10 ) $ (3,379 ) $ (6.06 ) Loss from discontinued (10 ) (0.02 ) (150 ) (0.25 ) (474 ) (0.82 ) (684 ) (1.12 ) (551 ) (0.99 ) operations Income (loss) from continuing (1,414 ) (2.32 ) 23 0.04 (1,298 ) (2.24 ) (2,414 ) (3.98 ) (2,828 ) (5.07 ) operations ATI impairment of goodwill and (684 ) (1.12 ) (2 ) - (1,132 ) (1.96 ) (1,089 ) (1.79 ) (1,132 ) (2.03 ) acquired intangible assets Incremental write-down of (227 ) (0.37 ) - - - - (227 ) (0.37 ) - - inventory Process technology - - 191 0.31 - - 191 0.31 - - license revenue Gain on sale of 200 millimeter - - - - - - 193 0.32 - - equipment Marketable securities net (21 ) (0.03 ) (9 ) (0.01 ) (69 ) (0.12 ) (66 ) (0.11 ) (111 ) (0.20 ) impairment charges Amortization of acquired intangibles, (30 ) (0.05 ) (30 ) (0.05 ) (50 ) (0.09 ) (137 ) (0.23 ) (254 ) (0.46 ) integration and other charges Restructuring (50 ) (0.08 ) (9 ) (0.01 ) - - (90 ) (0.15 ) - - charges Tax benefit from ATI - - - - 46 0.08 - - 46 0.08 acquisition-related charges The Foundry Company (23 ) (0.04 ) (4 ) (0.01 ) (3 ) (0.01 ) (35 ) (0.06 ) (3 ) (0.01 ) formation costs Gain on debt 39 0.06 - - - - 39 0.06 - - buyback Cost of fair value adjustment of - - - - - - - - (25 ) (0.04 ) acquired inventory Debt issuance - - - - - - - - (5 ) (0.01 ) charges Non-GAAP net loss $ (418 ) $ (114 ) $ (90 ) $ (1,193 ) $ (1,344 )
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) 1, 2 (Millions) Q4-08 Q3-08 Q4-07 2008 2007 GAAP operating income $ (1,274) $ 122 $ (1,187) $ (1,955) $ (2,310) (loss) ATI impairment of goodwill and acquired intangible (684) (2) (1,132) (1,089) (1,132) assets Incremental write-down of (227) - - (227) - inventory Process technology license - 191 - 191 - revenue Gain on sale of 200 - - - 193 - millimeter equipment Amortization of acquired intangibles, integration (30) (30) (50) (137) (254) and other charges Restructuring charges (50) (9) - (90) - The Foundry Company (23) (4) (3) (35) (3) formation costs Cost of fair value adjustment of acquired - - - - (25) inventory Non-GAAP operating loss $ (260) $ (24) $ (2) $ (761) $ (896) Reconciliation of GAAP to Non-GAAP Gross Margin 2 (Millions, except Q4-08 Q3-08 Q4-07 2008 2007 percentages) GAAP Gross Margin $ 272 $ 916 $ 769 $ 2,320 $ 2,189 GAAP Gross Margin % 23% 51% 44% 40% 37% Incremental write-down of (227) - - (227) - inventory Process technology license - 191 - 191 - revenue Cost of fair value adjustment of acquired - - - - (25) inventory Non-GAAP Gross Margin $ 499 $ 725 $ 769 $ 2,356 $ 2,214 Non-GAAP Gross Margin %* 43% 45% 44% 42% 38% *For Q3-08 the revenue number used in the gross margin percent calculation excludes $191 million of process technology license revenue Segment Information (Millions) Q4-08 vs Q3-08 vs Q4-07 2008 vs 2007 Computing Solutions (including process technology license revenue in Q3-08) Revenue $ 873 -37% -38% $ 4,559 -3% Microprocessor Units down down down Microprocessor Average down down down Selling Prices (ASP) Graphics(including game console royalties) Revenue $ 270 -30% -8% $ 1,165 17% Graphic Processor Units down down up Graphic Processor Average up up up Selling Prices (ASP)
1 During the fourth quarter of 2008, the Company determined that the discontinued operation classification criteria for the Handheld business unit were no longer met. Accordingly, the results of the Handheld business have been reclassified from discontinued operations to continuing operations. Prior periods have been recast to conform to current period.
2 In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for net loss, operating income (loss) and gross margin. These non-GAAP financial measures exclude certain adjustments as reflected 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.
3 Refer to corresponding table at the end of this press release for annual data.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended Year Ended
Dec. 27, Sept. 27, Dec. 29, Dec. 27, Dec. 29,
2008 2008 2007 2008 2007*
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenue $ 1,162 $ 1,797 $ 1,737 $ 5,808 $ 5,858
Cost of sales 890 881 968 3,488 3,669
Gross margin 272 916 769 2,320 2,189
Gross margin % 23 % 51 % 44 % 40 % 37 %
Research and 465 438 455 1,848 1,771
development
Marketing, general 317 315 319 1,304 1,360
and administrative
Amortization of
acquired intangible 30 30 50 137 236
assets and
integration charges
Impairment of
goodwill and 684 2 1,132 1,089 1,132
acquired intangible
assets
Restructuring 50 9 - 90 -
charges
Gain on sale of 200 - - - (193 ) -
millimeter equipment
Operating income (1,274 ) 122 (1,187 ) (1,955 ) (2,310 )
(loss)
Interest income 7 7 19 39 73
Interest expense (89 ) (87 ) (95 ) (366 ) (367 )
Other income 37 (4 ) 1 22 (7 )
(expense), net
Income (loss) from
continuing
operations before
minority interest, (1,319 ) 38 (1,262 ) (2,260 ) (2,611 )
equity in net loss
of Spansion Inc. and
other and income
taxes
Minority interest in
consolidated (6 ) (7 ) (9 ) (33 ) (35 )
subsidiaries
Equity in net loss
of Spansion Inc. and (20 ) (9 ) (69 ) (53 ) (155 )
other
Income (loss) from
continuing (1,345 ) 22 (1,340 ) (2,346 ) (2,801 )
operations before
income taxes
Provision (benefit) 69 (1 ) (42 ) 68 27
for income taxes
Income (loss) from
continuing $ (1,414 ) $ 23 $ (1,298 ) $ (2,414 ) $ (2,828 )
operations
Income (loss) from
discontinued (10 ) (150 ) (474 ) (684 ) (551 )
operations, net of
tax
Net income (loss) $ (1,424 ) $ (127 ) $ (1,772 ) $ (3,098 ) $ (3,379 )
Net income (loss)
per common share
Basic and diluted
Continuing $ (2.32 ) $ 0.04 $ (2.24 ) $ (3.98 ) $ (5.07 )
operations
Discontinued $ (0.02 ) $ (0.25 ) $ (0.82 ) $ (1.12 ) $ (0.99 )
operations
Basic and diluted
net income (loss) $ (2.34 ) $ (0.21 ) $ (3.06 ) $ (5.10 ) $ (6.06 )
per common share
Shares used in per
share calculation
Basic and diluted 609 608 579 607 558
* Amounts for the year ended December 29, 2007 were derived from the December
29, 2007 audited financial statements, adjusted for discontinued operations.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
Dec. 27, Dec. 29,
2008 2007*
(Unaudited)
Assets
Current assets:
Cash, cash equivalents and marketable $ 1,096 $ 1,889
securities
Accounts receivable, net 320 640
Inventories 656 810
Prepaid expenses and other current assets 279 401
Deferred income taxes 28 64
Assets of discontinued operations - 759
Total current assets 2,379 4,563
Property, plant and equipment, net 4,296 4,716
Goodwill 323 1,286
Acquisition related intangible assets, net 168 465
Other assets 509 520
Total Assets $ 7,675 $ 11,550
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Accounts payable $ 631 $ 1,009
Accrued compensation and benefits 162 186
Accrued liabilities 785 821
Deferred income on shipments to 50 101
distributors
Current portion of long-term debt and capital lease 286 238
obligations
Other short-term obligations 86 -
Other current liabilities 226 270
Total current liabilities 2,226 2,625
Deferred income taxes 91 6
Long-term debt and capital lease obligations, less 4,702 5,031
current portion
Other long-term liabilities 569 633
Minority interest in consolidated 169 265
subsidiaries
Stockholders' equity (deficit):
Capital stock:
Common stock, par value 6 6
Capital in excess of par value 6,002 5,921
Retained earnings (deficit) (6,198 ) (3,100 )
Accumulated other comprehensive income 108 163
Total stockholders' equity (deficit) (82 ) 2,990
Total Liabilities and Stockholders' Equity $ 7,675 $ 11,550
(Deficit)
* Amounts for the year ended December 29, 2007 were derived from the December
29, 2007 audited financial statements, adjusted for discontinued operations.
ADVANCED MICRO
DEVICES, INC.
SELECTED CORPORATE DATA (1)
(Unaudited)
(Millions except headcount
and percentages)
Quarter Ended Year Ended
Dec. 27, Sept. 27, Dec. 29, Dec. 27, Dec. 29,
Segment
Information from 2008 2008 2007 2008 2007
Continuing
Operations
Computing
Solutions (2)
Net revenue $ 873 $ 1,391 $ 1,402 $ 4,559 $ 4,702
Operating
income $ (431 ) $ 143 $ 10 $ (461 ) $ (712 )
(loss)
Graphics (3)
Net revenue 270 385 295 1,165 992
Operating
income (10 ) 47 15 12 (39 )
(loss)
All Other (4)
Net revenue 19 21 40 84 164
Operating
income (833 ) (68 ) (1,212 ) (1,506 ) (1,559 )
(loss)
Total from
Continuing
Operations
Net revenue $ 1,162 $ 1,797 $ 1,737 $ 5,808 $ 5,858
Operating
income $ (1,274 ) $ 122 $ (1,187 ) $ (1,955 ) $ (2,310 )
(loss)
Revenue
Reconciliation
Revenue from
continuing $ 1,162 $ 1,797 $ 1,737 $ 5,808 $ 5,858
operations
Revenue from
discontinued 8 23 33 73 155
operations
Total $ 1,170 $ 1,820 $ 1,770 $ 5,881 $ 6,013
revenue
Components of
Discontinued
Operations
Operating income $ (10 ) $ (15 ) $ 2 $ (74 ) $ (75 )
(loss)
Impairment of
goodwill and
acquired - (135 ) (476 ) (609 ) (476 )
intangible
assets
Restructuring - - - (1 ) -
charges
Total loss
from $ (10 ) $ (150 ) $ (474 ) $ (684 ) $ (551 )
discontinued
operations
Other Data
Depreciation &
amortization
(excluding
amortization of
acquired $ 271 $ 266 $ 272 $ 1,068 $ 1,030
intangible
assets)
Capital $ 112 $ 83 $ 264 $ 621 $ 1,683
additions
Adjusted EBITDA $ (271 ) $ 406 $ 206 $ 313 $ (64 )
(5)
Headcount 14,652 15,460 16,420 14,652 16,420
(1) Comparative amounts adjusted for discontinued operations except for headcount
data.
Computing Solutions segment includes microprocessors, chipsets and embedded
processors. For the year ended December 27, 2008 , the operating loss includes
(2) a $193M gain on the sale of 200 mm equipment. For the quarter ended Sept. 27,
2008 and year ended December 27, 2008, net revenue includes $191M in
technology license revenue.
Graphics segment includes graphics, video and multimedia products developed
for use in desktop and notebook computers, including home media PCs,
(3) professional workstations and servers. Starting in the quarter ended June 28,
2008 this segment also includes royalties received in connection with the sale
of game console systems that incorporate the Company's graphics technology.
Prior periods have been recast to conform to current period presentation.
All Other category includes employee stock-based compensation expense and
certain operating expenses and credits that are not allocated to the operating
segments. Also included in this category are charges for the impairment of
goodwill and acquired intangible assets, amortization of acquired intangible
(4) assets and integration, restructuring, severance; The Foundry Company
formation costs; and the cost of fair value adjustment of acquired inventory.
Details of these significant items are shown below. Starting in the quarter
ended December 27, 2008, the All Other category includes the results of our
Handheld business. Prior periods have been recast to conform to current period
presentation.
Significant items in All Other Employee stock-based compensation expense:
Quarter Ended Year Ended Quarter Ended Year Ended
Q408 Q308 Q407 FY08 FY07 Q408 Q308 Q407 FY08 FY07
Impairment of
goodwill and
acquired $ 684 $ 2 $ 1,132 $ 1,089 $ 1,132 Cost of sales $ 2 $ 2 $ 5 $ 10 $ 11
intangible
assets
Amortization
of acquired
intangible 30 30 50 137 236 Research and 10 10 11 44 50
assets and development
integration
charges
Restructuring Marketing,
charges 50 9 - 90 - general and 8 7 10 23 48
administrative
The Foundry
Company 23 - - 23 - $ 20 $ 19 $ 26 $ 77 $ 109
formation
costs
Cost of fair
value
adjustment of - - - - 25
acquired
inventory
Severance - - - - 18
charges
$ 787 $ 41 $ 1,182 $ 1,339 $ 1,411
(5) Reconciliation of income (loss) from continuing
operations to Adjusted EBITDA*
Quarter Ended Year Ended
Q408 Q308 Q407 FY08 FY07
Income (loss)
from $ (1,414 ) $ 23 $ (1,298 ) $ (2,414 ) $ (2,828 )
continuing
operations
Impairment of
goodwill and
acquired 684 2 1,132 1,089 1,132
intangible
assets
Depreciation
and 271 266 272 1,068 1,030
amortization
Amortization
of acquired 30 29 47 136 208
intangible
assets
Interest 89 87 95 366 367
expense
Provision
(benefit) for 69 (1 ) (42 ) 68 27
income taxes
Adjusted $ (271 ) $ 406 $ 206 $ 313 $ (64 )
EBITDA
The Company defines Adjusted EBITDA as income (loss) from continuing operations adjusted for impairment of
goodwill and acquired intangible assets, depreciation and amortization, amortization of acquired intangible
assets, interest expense and taxes. 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 (loss) 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.
Source: Advanced Micro Devices
Released January 22, 2009