Q2-15 | Q1-15 | Q2-14 | ||||
Revenue | $942M | $1.03B | $1.44B | |||
Operating income (loss) | $(137)M | $(137)M | $63M | |||
Net (loss) / (Loss) per share | $(181)M/$(0.23) | $(180)M/$(0.23) | $(36)M/$(0.05) |
Q2-15 | Q1-15 | Q2-14 | ||||
Revenue | $942M | $1.03B | $1.44B | |||
Operating income (loss) | $(87)M | $(30)M | $88M | |||
Net income (loss) / Earnings (loss) per share | $(131)M/$(0.17) | $(73)M/$(0.09) | $38M/$0.05 |
• | Revenue of $942 million, down 8 percent sequentially and 35 percent year-over-year. The sequential decrease was primarily due to weaker than expected consumer PC demand impacting the Company’s Original Equipment Manufacturer (OEM) APU sales. The year-over-year decline was primarily due to decreased sales across client and graphics product lines. |
• | Gross margin of 25 percent, down 7 percentage points sequentially, primarily due to a higher mix of Enterprise, Embedded and Semi-Custom segment sales, lower than anticipated Computing and Graphics segment APU unit |
• | Operating loss of $137 million, compared to an operating loss of $137 million for the prior quarter. Non-GAAP(1) operating loss of $87 million, compared to non-GAAP(1) operating loss of $30 million in Q1 2015, primarily due to lower revenue and gross margin driven by lower sales to OEMs attributable to a weak consumer PC market. |
• | Net loss of $181 million, loss per share of $0.23, and non-GAAP(1) net loss of $131 million, non-GAAP(1) loss per share of $0.17, compared to a net loss of $180 million, loss per share of $0.23 and non-GAAP(1) net loss of $73 million, non-GAAP(1) loss per share of $0.09 in Q1 2015. |
• | Cash, cash equivalents and marketable securities were $829 million at the end of the quarter, down $77 million from the end of the prior quarter. |
• | Total debt at the end of the quarter was $2.27 billion, flat from the prior quarter. |
• | Computing and Graphics segment revenue decreased 29 percent sequentially and 54 percent from Q2 2014. The sequential decrease was primarily due to decreased sales to OEMs of client notebook processors and the annual decrease was driven by decreased sales across client and graphics product lines. |
◦ | Operating loss was $147 million, compared with an operating loss of $75 million in Q1 2015 and an operating loss of $6 million in Q2 2014. The sequential decrease was primarily driven by lower notebook processor sales. The year-over-year decrease was primarily driven by lower sales partially offset by lower operating expenses. |
◦ | Client average selling price (ASP) increased sequentially and year-over-year primarily driven by product mix. |
◦ | GPU ASP increased sequentially and year-over-year primarily due to higher channel and desktop GPU ASPs. |
• | Enterprise, Embedded and Semi-Custom segment revenue increased 13 percent sequentially, primarily driven by higher sales of semi-custom SoCs. The year-over-year decrease of 8 percent was primarily driven by decreased server sales and lower non-recurring engineering (NRE) revenue. |
◦ | Operating income was $27 million compared with $45 million in Q1 2015 and $97 million in Q2 2014. The sequential decrease was primarily driven by the technology node transition charge of $33 million. The year-over-year decrease was primarily driven by lower revenue and the technology node transition charge. |
• | All Other category operating loss was $17 million compared with operating losses of $107 million in Q1 2015 and $28 million in Q2 2014. The sequential improvement was primarily due to charges in Q1 2015 associated with exiting the dense server systems business. The year-over-year change was primarily due to lower stock-based compensation expense and the absence of amortization of acquired intangible assets. |
• | At its 2015 Financial Analyst Day event, AMD outlined a multi-year strategy to drive profitable growth based on delivering a broad set of high-performance, differentiated products across the key areas of gaming, immersive platforms, and the datacenter. AMD also provided a product roadmap update that included its upcoming x86 processor core (codenamed “Zen”) for high-performance client and server computing. |
• | AMD announced that Jim Anderson joined the company as senior vice president and general manager of AMD’s Computing and Graphics (CG) business group, responsible for managing all aspects of strategy, business management, engineering, and sales for AMD’s computing and graphics products and solutions. |
• | AMD was named to the Fortune 500 List for the 15th year in a row. |
• | AMD demonstrated technology leadership with the introduction of the industry’s first graphics chip to combine die-stacked high-bandwidth memory (HBM) with its new flagship AMD Radeon™ R9 Fury X GPU, which delivers 60 percent more memory bandwidth and 4x the performance-per-watt of GDDR5 memory2. AMD also announced a full family of new Radeon™ R9 and Radeon™ R7 Series graphics cards as well as the AMD Radeon™ 300 and M300 Series Graphics. |
• | AMD announced the AMD 6th Generation A-Series mobile processors, delivering a significant 2.4x improvement in energy efficiency over previous generation processors3 and 2x the gaming performance of competing platforms4. AMD also introduced the latest addition to its line of desktop A-Series processors, the AMD A10-7870K APU, providing a best-in-class experience for eSports and online gaming. All new APUs are designed for the future with Microsoft Windows® 10 compatibility. |
• | AMD expanded its leadership position in virtual reality (VR) as technology partners continue to realize the benefits of AMD LiquidVR™ technology across a variety of industries, including education, entertainment, gaming, and medical research. |
• | AMD continued to build on its No. 1 position in the thin client space with new designs introduced from HP and Samsung, both powered by the AMD Embedded G-Series SoC. |
• | AMD drove continued momentum for its AMD FirePro™ professional graphics with new design wins and support in key vertical categories, including: |
◦ | Powering one of the world’s largest and most technologically advanced display walls, located in New York’s Times Square. |
◦ | Delivering certified support for both the Windows and Mac versions of Avid® Media Composer® 8.4, the industry-leading video editing application for HD and 4K broadcast and digital content creation. |
• | AMD demonstrated its commitment to leadership in HPC with the announcement that the University of Warsaw’s new ORION supercomputer cluster uses 150 Dell PowerEdge R730 servers each featuring 2 AMD FirePro™ S9150 server GPUs to deliver a GPU peak compute performance of 1.52 petaFLOPS single precision and 0.76 petaFLOPS double precision for OpenCL™ applications5. |
• | At the Red Hat Developer Summit, AMD extended its efforts to grow the ARM®-based server ecosystem by showcasing new 64-bit ARM development platforms from Linaro and SoftIron featuring the AMD Opteron™ A1100 Series processor (codenamed “Seattle”). |
(Millions except percentages) | Q2-15 | Q1-15 | Q2-14 | |||||||||
GAAP Gross Margin | $ | 232 | $ | 326 | $ | 498 | ||||||
GAAP Gross Margin % | 25 | % | 32 | % | 35 | % | ||||||
Technology node transition charge | 33 | — | — | |||||||||
Stock-based compensation* | 1 | 1 | 1 | |||||||||
Non-GAAP Gross Margin | $ | 266 | $ | 327 | $ | 499 | ||||||
Non-GAAP Gross Margin % | 28 | % | 32 | % | 35 | % |
(Millions) | Q2-15 | Q1-15 | Q2-14 | |||||||||
GAAP operating income (loss) | $ | (137 | ) | $ | (137 | ) | $ | 63 | ||||
Technology node transition charge | 33 | — | — | |||||||||
Restructuring and other special charges, net | — | 87 | — | |||||||||
Amortization of acquired intangible assets | — | 3 | 4 | |||||||||
Stock-based compensation* | 17 | 17 | 21 | |||||||||
Non-GAAP operating income (loss) | $ | (87 | ) | $ | (30 | ) | $ | 88 |
(Millions except per share amounts) | Q2-15 | Q1-15 | Q2-14 | |||||||||||||||||||||
GAAP net loss / loss per share | $ | (181 | ) | $ | (0.23 | ) | $ | (180 | ) | $ | (0.23 | ) | $ | (36 | ) | $ | (0.05 | ) | ||||||
Technology node transition charge | 33 | 0.04 | — | — | — | — | ||||||||||||||||||
Restructuring and other special charges, net | — | — | 87 | 0.11 | — | — | ||||||||||||||||||
Amortization of acquired intangible assets | — | — | 3 | — | 4 | 0.01 | ||||||||||||||||||
Loss on debt redemption | — | — | — | — | 49 | 0.06 | ||||||||||||||||||
Stock-based compensation* | 17 | 0.02 | 17 | 0.02 | 21 | 0.03 | ||||||||||||||||||
Non-GAAP net income (loss) / earnings (loss) per share | $ | (131 | ) | $ | (0.17 | ) | $ | (73 | ) | $ | (0.09 | ) | $ | 38 | $ | 0.05 |
* | Beginning in Q1 2015, AMD started excluding the impact of stock-based compensation from non-GAAP results. Prior periods have been adjusted accordingly. |
1. | In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this earnings press release. AMD also provided adjusted EBITDA and non-GAAP 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 earnings press release. AMD 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 AMD believes it assists investors in comparing AMD’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. Refer to the data tables at the end of this earnings press release. |
2. | Testing conducted by AMD engineering on the AMD Radeon™ R9 290X GPU vs. the AMD Radeon™ R9 Fury X GPU. Data obtained through isolated direct measurement of GDDR5 and HBM power delivery rails at full memory utilization. Power efficiency calculated as GB/s of bandwidth delivered per watt of power consumed. AMD Radeon™ R9 290X (10.66 GB/s bandwidth per watt) and R9 Fury X (42.66 GB/s bandwidth per watt) GPU, AMD FX-8350, Gigabyte GA-990FX-UD5, 8GB DDR3-1866, Windows 8.1 x64 Professional, AMD Catalyst™ 15.20 Beta HBM-1 |
3. | Typical-use Energy Efficiency as defined by taking the ratio of compute capability as measured by common performance measures such as SpecIntRate, PassMark and PCMark, divided by typical energy use as defined by ETEC (Typical Energy Consumption for notebook computers) as specified in Energy Star Program Requirements Rev 6.0 10/2013. “Kaveri” relative compute capability (4.5) of baseline divided by relative energy efficiency (0.45) of baseline = 10X. “Carrizo” relative compute capability (5.8) of baseline divided by relative energy efficiency (0.23) of baseline = 25.2X (which is 2.4x that of “Kaveri”) CZN-59 |
4. | Testing by AMD Performance Labs using an AMD FX-8800P with AMD Radeon™ R7 graphics, 2x4 DDR3-2133, 256 GB SSD, Windows 8.1 64bit, driver 15.10 scored 2753 in 3DMark® 11 performance. Core™ i7 5500U with HD 5500 graphics, DDR3-1600, 256 SSD, Windows 8.1 64bit, driver 4156 scored 1350 in 3DMark 11 Performance CZN-58 |
5. | Results are based on theoretical performance. The ORION cluster features 300 of the AMD FirePro S9150 GPU installations. According to AMD specifications, the total of all 5.07 teraFLOPS of peak single-precision results in 1,521 petaFLOPS (300 x 5.07 TFLOPS) and the total of all 2.53 teraFLOPS peak double-precision results in 0.76 petaFLOPS (300 x 2.53 TFLOPS) of compute performance. |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 27, 2015 | March 28, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||||||
Net revenue | $ | 942 | $ | 1,030 | $ | 1,441 | $ | 1,972 | $ | 2,838 | ||||||||||
Cost of sales | 710 | 704 | 943 | $ | 1,414 | $ | 1,853 | |||||||||||||
Gross margin | 232 | 326 | 498 | 558 | 985 | |||||||||||||||
Gross margin % | 25 | % | 32 | % | 35 | % | 28 | % | 35 | % | ||||||||||
Research and development | 235 | 242 | 277 | 477 | 556 | |||||||||||||||
Marketing, general and administrative | 134 | 131 | 154 | 265 | 310 | |||||||||||||||
Amortization of acquired intangible assets | — | 3 | 4 | 3 | 7 | |||||||||||||||
Restructuring and other special charges, net | — | 87 | — | 87 | — | |||||||||||||||
Operating income (loss) | (137 | ) | (137 | ) | 63 | (274 | ) | 112 | ||||||||||||
Interest expense | (40 | ) | (40 | ) | (46 | ) | (80 | ) | (93 | ) | ||||||||||
Other expense, net | (3 | ) | — | (49 | ) | (3 | ) | (69 | ) | |||||||||||
Loss before income taxes | (180 | ) | (177 | ) | (32 | ) | (357 | ) | (50 | ) | ||||||||||
Provision for income taxes | 1 | 3 | 4 | 4 | 6 | |||||||||||||||
Net loss | $ | (181 | ) | $ | (180 | ) | $ | (36 | ) | $ | (361 | ) | $ | (56 | ) | |||||
Net loss per share | ||||||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.23 | ) | $ | (0.05 | ) | $ | (0.46 | ) | $ | (0.07 | ) | |||||
Diluted | $ | (0.23 | ) | $ | (0.23 | ) | $ | (0.05 | ) | $ | (0.46 | ) | $ | (0.07 | ) | |||||
Shares used in per share calculation | ||||||||||||||||||||
Basic | 778 | 777 | 764 | 778 | 762 | |||||||||||||||
Diluted | 778 | 777 | 764 | 778 | 762 | |||||||||||||||
ADVANCED MICRO DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Millions) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 27, 2015 | March 28, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||||||
Total comprehensive loss | $ | (174 | ) | $ | (187 | ) | $ | (32 | ) | $ | (361 | ) | $ | (53 | ) |
June 27, 2015 | March 28, 2015 | December 27, 2014 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 829 | $ | 677 | $ | 805 | ||||||
Marketable securities | — | 229 | 235 | |||||||||
Accounts receivable, net | 687 | 771 | 818 | |||||||||
Inventories, net | 799 | 688 | 685 | |||||||||
Prepayments to GLOBALFOUNDRIES | 19 | 44 | 113 | |||||||||
Prepaid expenses and other current assets | 117 | 88 | 80 | |||||||||
Total current assets | 2,451 | 2,497 | 2,736 | |||||||||
Property, plant and equipment, net | 289 | 297 | 302 | |||||||||
Acquisition related intangible assets, net | — | — | 65 | |||||||||
Goodwill | 320 | 320 | 320 | |||||||||
Other assets | 321 | 314 | 344 | |||||||||
Total Assets | $ | 3,381 | $ | 3,428 | $ | 3,767 | ||||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||||||
Current liabilities: | ||||||||||||
Short-term debt | $ | 235 | $ | 235 | $ | 177 | ||||||
Accounts payable | 454 | 381 | 415 | |||||||||
Payable to GLOBALFOUNDRIES | 197 | 121 | 218 | |||||||||
Accrued and other current liabilities | 462 | 494 | 558 | |||||||||
Deferred income on shipments to distributors | 51 | 61 | 72 | |||||||||
Total current liabilities | 1,399 | 1,292 | 1,440 | |||||||||
Long-term debt | 2,034 | 2,033 | 2,035 | |||||||||
Other long-term liabilities | 89 | 86 | 105 | |||||||||
Stockholders’ equity (deficit): | ||||||||||||
Capital stock: | ||||||||||||
Common stock, par value | 8 | 8 | 8 | |||||||||
Additional paid-in capital | 6,984 | 6,967 | 6,949 | |||||||||
Treasury stock, at cost | (121 | ) | (120 | ) | (119 | ) | ||||||
Accumulated deficit | (7,007 | ) | (6,826 | ) | (6,646 | ) | ||||||
Accumulated other comprehensive loss | (5 | ) | (12 | ) | (5 | ) | ||||||
Total stockholders’ equity (deficit) | (141 | ) | 17 | 187 | ||||||||
Total Liabilities and Stockholders’ Equity (Deficit) | $ | 3,381 | $ | 3,428 | $ | 3,767 |
Three Months Ended | Six Months Ended | |||||||
June 27, 2015 | June 27, 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (181 | ) | $ | (361 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 45 | 91 | ||||||
Stock-based compensation expense | 17 | 34 | ||||||
Non-cash interest expense | 3 | 6 | ||||||
Restructuring and other special charges, net | 1 | 72 | ||||||
Other | 2 | 1 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 83 | 129 | ||||||
Inventories | (111 | ) | (117 | ) | ||||
Prepayments to GLOBALFOUNDRIES | 26 | 94 | ||||||
Prepaid expenses and other assets | (57 | ) | (73 | ) | ||||
Accounts payable, accrued liabilities and other | 38 | (86 | ) | |||||
Payable to GLOBALFOUNDRIES | 76 | (21 | ) | |||||
Net cash used in operating activities | $ | (58 | ) | $ | (231 | ) | ||
Cash flows from investing activities: | ||||||||
Purchases of available-for-sale securities | (4 | ) | (227 | ) | ||||
Purchases of property, plant and equipment | (17 | ) | (39 | ) | ||||
Proceeds from maturity of available-for-sale securities | 232 | 462 | ||||||
Net cash provided by investing activities | $ | 211 | $ | 196 | ||||
Cash flows from financing activities: | ||||||||
Net proceeds from grants and allowances | $ | — | $ | 4 | ||||
Proceeds from issuance of common stock | 1 | 1 | ||||||
Proceeds from borrowings, net | 42 | 100 | ||||||
Repayments of long-term debt and capital lease obligations | (43 | ) | (44 | ) | ||||
Other | (1 | ) | (2 | ) | ||||
Net cash provided by (used in) financing activities | $ | (1 | ) | $ | 59 | |||
Net increase in cash and cash equivalents | 152 | 24 | ||||||
Cash and cash equivalents at beginning of period | $ | 677 | $ | 805 | ||||
Cash and cash equivalents at end of period | $ | 829 | $ | 829 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 27, 2015 | March 28, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||||||
Segment and Category Information | ||||||||||||||||||||
Computing and Graphics (1) | ||||||||||||||||||||
Net revenue | $ | 379 | $ | 532 | $ | 828 | $ | 911 | $ | 1,689 | ||||||||||
Operating loss | $ | (147 | ) | $ | (75 | ) | $ | (6 | ) | $ | (222 | ) | $ | (3 | ) | |||||
Enterprise, Embedded and Semi-Custom (2) | ||||||||||||||||||||
Net revenue | 563 | 498 | 613 | 1,061 | 1,149 | |||||||||||||||
Operating income | 27 | 45 | 97 | 72 | 182 | |||||||||||||||
All Other (3) | ||||||||||||||||||||
Net revenue | — | — | — | — | — | |||||||||||||||
Operating loss | (17 | ) | (107 | ) | (28 | ) | (124 | ) | (67 | ) | ||||||||||
Total | ||||||||||||||||||||
Net revenue | $ | 942 | $ | 1,030 | $ | 1,441 | $ | 1,972 | $ | 2,838 | ||||||||||
Operating income (loss) | $ | (137 | ) | $ | (137 | ) | $ | 63 | $ | (274 | ) | $ | 112 | |||||||
Other Data | ||||||||||||||||||||
Depreciation and amortization, excluding amortization of acquired intangible assets | $ | 45 | $ | 43 | $ | 49 | $ | 88 | $ | 99 | ||||||||||
Capital additions | $ | 17 | $ | 22 | $ | 23 | $ | 39 | $ | 44 | ||||||||||
Adjusted EBITDA (4) | $ | (42 | ) | $ | 13 | $ | 137 | $ | (29 | ) | $ | 276 | ||||||||
Cash, cash equivalents and marketable securities, including long-term marketable securities | $ | 829 | $ | 906 | $ | 948 | $ | 829 | $ | 948 | ||||||||||
Non-GAAP free cash flow (5) | $ | (75 | ) | $ | (195 | ) | $ | (51 | ) | $ | (270 | ) | $ | (276 | ) | |||||
Total assets | $ | 3,381 | $ | 3,428 | $ | 4,246 | $ | 3,381 | $ | 4,246 | ||||||||||
Total debt | $ | 2,269 | $ | 2,268 | $ | 2,210 | $ | 2,269 | $ | 2,210 | ||||||||||
Headcount | 9,469 | 9,583 | 10,300 | 9,469 | 10,300 |
(1) | Computing and Graphics segment primarily includes desktop and notebook processors, chipsets, discrete graphics processing units (GPUs) and professional graphics. |
(2) | Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. |
(3) | All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category are amortization of acquired intangible assets and stock-based compensation expense. In addition, the Company also included the following adjustments for the indicated periods: for the first quarter of 2015 and six months ended June 27, 2015, the Company included net restructuring and other special charges; and for the six months ended June 28, 2014, the Company included an adjustment for workforce rebalancing severance charges. |
(4) | Reconciliation of GAAP operating income (loss) to Adjusted EBITDA* |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 27, 2015 | March 28, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||||||
GAAP operating income (loss) | $ | (137 | ) | $ | (137 | ) | $ | 63 | $ | (274 | ) | $ | 112 | |||||||
Technology node transition charge | 33 | — | — | 33 | — | |||||||||||||||
Restructuring and other special charges, net | — | 87 | — | 87 | — | |||||||||||||||
Stock-based compensation expense | 17 | 17 | 21 | 34 | 44 | |||||||||||||||
Amortization of acquired intangible assets | — | 3 | 4 | 3 | 7 | |||||||||||||||
Depreciation and amortization | 45 | 43 | 49 | 88 | 99 | |||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | 14 | |||||||||||||||
Adjusted EBITDA | $ | (42 | ) | $ | 13 | $ | 137 | $ | (29 | ) | $ | 276 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 27, 2015 | March 28, 2015 | June 28, 2014 | June 27, 2015 | June 28, 2014 | ||||||||||||||||
GAAP net cash used in operating activities | $ | (58 | ) | $ | (173 | ) | $ | (28 | ) | $ | (231 | ) | $ | (232 | ) | |||||
Purchases of property, plant and equipment | (17 | ) | (22 | ) | (23 | ) | (39 | ) | (44 | ) | ||||||||||
Non-GAAP free cash flow | $ | (75 | ) | $ | (195 | ) | $ | (51 | ) | $ | (270 | ) | $ | (276 | ) |
* | The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting operating income (loss) for depreciation and amortization, stock-based compensation expense and amortization of acquired intangible assets. In addition, the Company also excluded the following adjustments for the indicated periods: for the second quarter of 2015 and six months ended June 27, 2015, the Company excluded a technology node transition charge and for the first quarter of 2015 and six months ended June 27, 2015, the Company excluded net restructuring and other special charges. The Company calculates and communicates Adjusted EBITDA 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. |
** | The Company also presents non-GAAP free cash flow as a supplemental measure of its performance. Non-GAAP free cash flow is determined by adjusting GAAP net cash used in operating activities for capital expenditures. The Company calculates and communicates non-GAAP free cash flow in the financial earnings press release 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 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 free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities. The Company has provided reconciliations within the earnings press release of these non-GAAP financial measures to the most directly comparable GAAP financial measures. |