Exhibit 99.1 NEWS RELEASE CONTACTS: John Greenagel AMD Public Relations (408) 749-3310 E-mail: john.greenagel@amd.com ---------------------- Toni Beckham AMD Investor Relations (408) 749-3127 E-Mail: investorrelations-ca.communications@amd.com AMD REPORTS THIRD QUARTER RESULTS -- Company Reports Lower Revenues on Record Unit Sales of AMD Athlon(TM) and AMD Duron(TM) Processors at Depressed Prices-- SUNNYVALE, CA - October 17, 2001 - AMD today reported results for the quarter ended September 30, 2001. Net sales for the third quarter of 2001 were $765,870,000, a decline of 22 percent compared with sales of $985,264,000 in the second quarter of 2001. AMD reported sales of $1,206,549,000 in the third quarter of 2000. The pro forma net loss for the quarter, which excludes one-time charges, amounted to $97,424,000, which was equivalent to $0.28 per share. The pro forma net loss excludes the effects of restructuring and other special charges amounting to $89.3 million and additional inventory provisions amounting to $6.9 million. These charges were associated with the company's previously announced plans to close wafer fabrication facilities and reduce other manufacturing activities and administrative support that primarily serve AMD foundry service operations. The pro forma net loss also excludes the effects of a charge amounting to $22 million for impaired investments. Total pro forma adjustments, net of tax credits, amounted to $89.5 million. -more- 2 The total net loss under GAAP (generally accepted accounting principles) for the third quarter of 2001 was $186,929,000, which amounted to $0.54 per share on 345,044,000 shares outstanding. In the second quarter of 2001, AMD reported net income of $17,352,000, which amounted to $0.05 per diluted share. Net sales for the first nine months of 2001 were $2,939,881,000, compared with $3,469,015,000 for the first nine months of 2000, a decline of 15 percent. Pro forma net income for the first nine months of 2001 amounted to $44,766,000, or $0.13 per diluted share. Pro forma net income for the first nine months of 2000 amounted to $615,792,000, or $1.81 per diluted share. The total net loss under GAAP for the first nine months of 2001 was $44,739,000, or $0.14 per share. Net income for the first nine months of 2000 was $805,058,000, or $2.36 per diluted share. Memory Group sales in the third quarter of 2001 at $210 million declined by 34 percent from the second quarter of 2001, reflecting continuing weakness in the communication sector and excess inventories of flash memory devices at major customers. The company reported record unit sales of AMD Athlon(TM) and AMD Duron(TM) processors in the quarter. Total PC processor unit sales for the third quarter of 2001, at more than 7.7 million units, remained at the record level of the immediate-prior quarter. In the face of very aggressive competition, average selling prices (ASPs) for PC processors declined by 20 percent sequentially. "AMD held market share in the 22 percent range in a very weak PC market made more difficult by our principal competitor's efforts to halt our forward momentum," said W. J. Sanders III, chairman and chief executive officer. "Those efforts have failed as the performance deficiencies of computers based on Intel's Pentium(R) 4 processors have become increasingly evident. Nevertheless, drastic price cuts and large, cash-backed marketing programs from Intel had the effect of driving down ASPs on PC processors in the market segments where we compete directly. -more- 3 "During the quarter, AMD commenced shipments of the newest member of the AMD Athlon processor family, the AMD Athlon XP processor, based on the `Palomino' core. AMD Athlon XP processors were designed to deliver extreme performance on the desktop running the new Microsoft(R) Windows(R) XP operating system. The AMD Athlon XP processor outperforms any other PC processor in the world, unlocking the full potential of a PC when combined with the Windows XP operating system," Sanders said. "Earlier this week at the Microprocessor Forum, the industry's leading microprocessor technical conference, AMD revealed more details about the architecture of the eighth-generation Hammer family of PC processors planned for introduction late next year. The Hammer family will feature on-chip memory control as well as a highly scalable system bus that uses HyperTransport(TM) technology, enabling the chips inside PCs to communicate with each other up to 24 times faster than with existing technologies. We believe the Hammer family will continue AMD's performance leadership in the PC processor market. "AMD employees throughout the world responded valiantly in the wake of the terrorist attacks in New York and Washington. Despite disruption of air transportation services following the attacks, AMD maintained its operational excellence and met all commitments to customers," Sanders concluded. The company also reported the repurchase of 6.3 million shares of its common stock during the quarter. Current Outlook The company's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially. The company's current outlook is based on the following projections: Demand for flash memory devices from new customers is expected to offset continuing weakness in demand from customers in the communications sector, where inventories continue to exceed desired levels. Uncertainty in the economy reflecting declining consumer sentiment suggests caution in attempting a precise forecast. Accordingly, the company projects that Memory Group sales in the fourth quarter will range from unchanged to growth of 10 percent over the level of the third quarter of 2001. -more- 4 The company expects that the normal seasonality that was to have benefited the PC market in the fourth quarter will be muted at best in light of the impact of global economic uncertainty on consumer spending. Unit sales of PCs are expected to grow only modestly in the fourth quarter of 2001 from the levels of the third quarter. The encouraging reception of the new AMD Athlon XP processor, the world's highest-performance PC processor; the acceptance of AMD's first multiprocessor server and workstation product, the AMD Athlon MP processor; and the growing success in commercial markets of the AMD Athlon family offerings presage continuing growth in unit shipments of AMD PC processors. In the current quarter, the company again expects to achieve record unit volume sales of AMD Athlon and AMD Duron processors. The company's strengthening competitive position is expected to result in attenuating price declines and to generate revenues ranging from the level of the third quarter of 2001 to as much as 10 percent growth sequentially. If current conditions prevail and as revenues from the company's other IC products and foundry services decline, the company expects that overall revenues will range from flat to high single-digit percentage growth in the fourth quarter. Revenues in this range would be insufficient to offset the current level of expenses, and therefore the company currently expects to report an operating loss in the fourth quarter. AMD Teleconference AMD will hold a teleconference for the financial community at 2:30 PM Pacific Daylight Time today to discuss 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 http://www.amd.com or --------------------- http://www.StreetEvents.com. The webcast will be available for two weeks after ---------------------------- the teleconference. -more- 5 Cautionary Statement This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Risks include the possibility that global business and economic conditions will worsen, and that consumer confidence will continue to decline, resulting in lower than expected sales in the quarter; that Intel Corporation pricing, marketing programs, product bundling, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current PC processor sales plans; that demand for personal computers and, in turn, demand for the company's seventh-generation PC processors will be lower than currently expected; that demand from new customers for the company's flash memory products will be lower than currently expected; that changes in customer needs will dampen anticipated demand for the company's flash memory products; that the company will not continue to be successful in ramping production of the company's highest-performance AMD Athlon processors in Fab 30 in Dresden, Germany; and that the company will not be able to maintain or grow revenues in the current quarter consistent with its current forecast. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the report on Form 10-K for the year ended December 31, 2000, and the report on Form 10-Q for the quarter ended July 1, 2001. About AMD AMD is a global supplier of integrated circuits for the personal and networked computer and communications markets with manufacturing facilities in the United States, Europe, Japan, and Asia. AMD, a Fortune 500 and Standard & Poor's 500 company, produces microprocessors, flash memory devices, and support circuitry for communications and networking applications. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of $4.6 billion in 2000. (NYSE: AMD). -more- 6 Visit AMD on the Web For more AMD news and product information, please visit our virtual pressroom at www.amd.com/news/virtualpress/index.html. Additional press releases ---------------------------------------- are available at www.amd.com/news/news.html. -------------------------- -30- AMD, the AMD logo, AMD Athlon, AMD Duron and combinations thereof are trademarks of Advanced Micro Devices, Inc. HyperTransport is a trademark of the HyperTransport Technology Consortium. Other product names used in this publication are for identification purposes only and may be trademarks of their respective companies. Advanced Micro Devices, Inc. CONSOLIDATED BALANCE SHEETS (Thousands)
Sept. 30, July 1, December 31, 2001 2001 2000* ------------------------------------------------------------------------------------------------------------------------------------ (unaudited) (unaudited) Assets Current assets: Cash, cash equivalents and short-term investments $ 903,534 $ 1,057,163 $ 1,293,165 Accounts receivable, net 588,563 728,356 547,200 Inventories 449,078 400,849 343,541 Deferred income taxes 168,846 188,946 218,527 Prepaid expenses and other current assets 289,722 175,522 255,256 ------------------------------------------------------------------------------------------------------------------------------------ Total current assets 2,399,743 2,550,836 2,657,689 Property, plant and equipment, net 2,715,292 2,668,271 2,636,467 Investment in joint venture 396,351 377,639 261,728 Other assets 227,819 234,207 211,851 ------------------------------------------------------------------------------------------------------------------------------------ $ 5,739,205 $ 5,830,953 $ 5,767,735 ==================================================================================================================================== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 369,064 $ 314,606 $ 477,369 Accrued compensation and benefits 143,987 121,523 172,815 Accrued liabilities 382,797 315,928 276,721 Income tax payable 49,591 38,184 74,806 Deferred income on shipments to distributors 34,620 67,407 92,828 Current portion of long-term debt, capital lease obligations and other 192,487 220,080 129,570 ------------------------------------------------------------------------------------------------------------------------------------ Total current liabilities 1,172,546 1,077,728 1,224,109 Deferred income taxes 139,850 198,203 203,986 Long-term debt, capital lease obligations and other, less current portion 796,021 754,717 1,167,973 Stockholders' equity: Capital stock: Common stock, par value 3,471 3,464 3,141 Capital in excess of par value 1,890,646 1,955,498 1,406,290 Retained earnings 1,811,522 1,998,450 1,856,261 Accumulated other comprehensive loss (74,851) (157,107) (94,025) ------------------------------------------------------------------------------------------------------------------------------------ Total stockholders' equity 3,630,788 3,800,305 3,171,667 ------------------------------------------------------------------------------------------------------------------------------------ $ 5,739,205 $ 5,830,953 $ 5,767,735 ====================================================================================================================================
*Derived from the December 31, 2000 audited financial statements of Advanced Micro Devices, Inc. Advanced Micro Devices, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Thousands except per share amounts)
Quarter Ended Nine Months Ended (Unaudited) (Unaudited) ------------------------------------------------------------------------------------------------------------------------------------ Sept. 30, July 1, Oct. 1, Sept. 30, Oct. 1, 2001 2001 2000 2001 2000 ------------------------------------------------------------------------------------------------------------------------------------ Net sales $ 765,870 $ 985,264 $ 1,206,549 $ 2,939,881 $ 3,469,015 Cost of sales 594,056 636,199 639,010 1,945,085 1,857,334 Research and development 161,185 171,114 162,764 490,059 479,712 Marketing, general and administrative 150,918 156,291 141,931 456,346 438,259 Restructuring and other special charges 89,305 -- -- 89,305 -- ------------------------------------------------------------------------------------------------------------------------------------ 995,464 963,604 943,705 2,980,795 2,775,305 ------------------------------------------------------------------------------------------------------------------------------------ Operating income (loss) (229,594) 21,660 262,844 (40,914) 693,710 Gain on sale of Legerity -- -- 336,899 -- 336,899 Interest and other income (expense), net (11,220) 12,308 19,789 19,911 60,852 Interest expense (9,946) (20,199) (17,382) (51,790) (40,105) ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) before income taxes, equity in joint venture and extraordinary item (250,760) 13,769 602,150 (72,793) 1,051,356 Provision (benefit) for income taxes (65,018) 3,717 175,009 (8,758) 226,787 ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) before equity in joint venture and extraordinary item (185,742) 10,052 427,141 (64,035) 824,569 Equity in net income (loss) in joint venture (1,187) 7,300 4,406 19,296 3,469 ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) before extraordinary item (186,929) 17,352 431,547 (44,739) 828,038 Extraordinary item - debt retirement, net of tax benefit -- -- 22,980 -- 22,980 ------------------------------------------------------------------------------------------------------------------------------------ Net income (loss) $ (186,929) $ 17,352 $ 408,567 $ (44,739) $ 805,058 ------------------------------------------------------------------------------------------------------------------------------------ Net income (loss) per common share Basic: Income (loss) before extraordinary item $ (0.54) $ 0.05 $ 1.38 $ (0.14) $ 2.69 Net income (loss) $ (0.54) $ 0.05 $ 1.31 $ (0.14) $ 2.61 Diluted: Income (loss) before extraordinary item $ (0.54) $ 0.05 $ 1.24 $ (0.14) $ 2.42 Net income (loss) $ (0.54) $ 0.05 $ 1.18 $ (0.14) $ 2.36 ------------------------------------------------------------------------------------------------------------------------------------ Shares used in per share calculation -Basic 345,044 330,120 311,943 329,837 307,942 -Diluted 345,044 340,533 352,893 329,837 350,082 ------------------------------------------------------------------------------------------------------------------------------------