Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 28, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-07882 | |
Entity Registrant Name | ADVANCED MICRO DEVICES, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-1692300 | |
Entity Address, Address Line One | 2485 Augustine Drive | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 408 | |
Local Phone Number | 749-4000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | AMD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,171,190,397 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000002488 | |
Current Fiscal Year End Date | --12-26 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Income Statement [Abstract] | ||
Net revenue | $ 1,786 | $ 1,272 |
Cost of sales | 968 | 751 |
Gross profit | 818 | 521 |
Research and development | 442 | 373 |
Marketing, general and administrative | 199 | 170 |
Licensing gain | 0 | (60) |
Operating income | 177 | 38 |
Interest expense | (13) | (27) |
Other income (expense), net | 4 | (7) |
Income before income taxes and equity loss | 168 | 4 |
Provision for (benefit from) income taxes | 6 | (13) |
Equity loss in investee | 0 | (1) |
Net income | $ 162 | $ 16 |
Earnings per share | ||
Basic (in usd per share) | $ 0.14 | $ 0.01 |
Diluted (in usd per share) | $ 0.14 | $ 0.01 |
Shares used in per share calculation | ||
Basic (in shares) | 1,170 | 1,044 |
Diluted (in shares) | 1,224 | 1,094 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 162 | $ 16 |
Net unrealized gains (losses) on cash flow hedges: | ||
Net unrealized gains (losses) arising during the period | (17) | 5 |
Net losses reclassified into income | 3 | 2 |
Total change in unrealized gains (losses) on cash flow hedges | (14) | 7 |
Total comprehensive income | $ 148 | $ 23 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 28, 2020 | Dec. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,330 | $ 1,466 |
Marketable securities | 55 | 37 |
Accounts receivable, net | 1,691 | 1,859 |
Inventories, net | 1,056 | 982 |
Prepayment and receivables—related parties | 17 | 20 |
Prepaid expenses and other current assets | 241 | 233 |
Total current assets | 4,390 | 4,597 |
Property and equipment, net | 540 | 500 |
Operating lease right-of-use assets | 221 | 205 |
Goodwill | 289 | 289 |
Investment: equity method | 58 | 58 |
Other assets | 366 | 379 |
Total assets | 5,864 | 6,028 |
Current liabilities: | ||
Accounts payable | 653 | 988 |
Payables to related parties | 187 | 213 |
Accrued liabilities | 1,070 | 1,084 |
Other current liabilities | 75 | 74 |
Total current liabilities | 1,985 | 2,359 |
Long-term debt, net | 488 | 486 |
Long-term operating lease liabilities | 211 | 199 |
Other long-term liabilities | 143 | 157 |
Contingencies (See Note 11) | ||
Capital stock: | ||
Common stock, par value $0.01; shares authorized: 2,250; shares issued: 1,176 and 1,175; shares outstanding: 1,171 and 1,170 | 12 | 12 |
Additional paid-in capital | 10,026 | 9,963 |
Treasury stock, at cost (shares issued: 5 and 5) | (54) | (53) |
Accumulated deficit | (6,933) | (7,095) |
Accumulated other comprehensive loss | (14) | 0 |
Total stockholders’ equity | 3,037 | 2,827 |
Total liabilities and stockholders’ equity | $ 5,864 | $ 6,028 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 28, 2020 | Dec. 28, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,250,000,000 | 2,250,000,000 |
Common stock, shares issued (in shares) | 1,176,000,000 | 1,175,000,000 |
Common stock, shares outstanding (in shares) | 1,171,000,000 | 1,170,000,000 |
Treasury stock, shares (in shares) | 5,000,000 | 5,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 162 | $ 16 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 68 | 46 |
Stock-based compensation | 59 | 41 |
Amortization of debt discount and issuance costs | 4 | 9 |
Amortization of operating lease right-of-use assets | 10 | 9 |
Loss on debt redemption | 0 | 8 |
Loss on sale/disposal of property and equipment | 18 | 6 |
Other | 3 | (1) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 168 | (5) |
Inventories, net | (74) | (110) |
Prepayment and receivables—related parties | 3 | (4) |
Prepaid expenses and other assets | (31) | (14) |
Payables to related parties | (26) | (6) |
Accounts payable, accrued liabilities and other | (429) | (208) |
Net cash used in operating activities | (65) | (213) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (55) | (62) |
Purchases of available-for-sale debt securities | (55) | (231) |
Proceeds from maturity of available-for-sale debt securities | 37 | 93 |
Collection of deferred proceeds on sale of receivables | 0 | 25 |
Other | 0 | 2 |
Net cash used in investing activities | (73) | (173) |
Cash flows from financing activities: | ||
Repayments of debt | 0 | (164) |
Proceeds from warrant exercise | 0 | 449 |
Proceeds from sales of common stock through employee equity plans | 3 | 1 |
Other | (1) | 0 |
Net cash provided by financing activities | 2 | 286 |
Net decrease in cash, cash equivalents, and restricted cash | (136) | (100) |
Cash, cash equivalents, and restricted cash at beginning of period | 1,470 | 1,083 |
Cash, cash equivalents, and restricted cash at end of period | 1,334 | 983 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment, accrued but not paid | 99 | 62 |
Transfer of assets for the acquisition of property and equipment | 13 | 0 |
Issuance of treasury stock to partially settle debt | 0 | 7 |
Operating lease right-of-use assets acquired by assuming related liabilities | 25 | 3 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 1,330 | 978 |
Restricted cash included in Prepaid expenses and other current assets | 4 | 5 |
Total cash, cash equivalents, and restricted cash | $ 1,334 | $ 983 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Treasury stock | Accumulated deficit | Accumulated other comprehensive income (loss) |
Beginning balance at Dec. 29, 2018 | $ 10 | $ 8,750 | $ (50) | $ (7,436) | $ (8) | |
Number of shares outstanding | ||||||
Common stock issued under employee equity plans | 1 | |||||
Stock-based compensation | 41 | |||||
Issuance of common stock upon warrant exercise | 1 | 448 | ||||
Issuance of treasury stock to partially settle debt | 5 | 2 | ||||
Other | 1 | |||||
Net income | $ 16 | 16 | ||||
Other comprehensive income (loss) | 7 | |||||
Ending balance at Mar. 30, 2019 | 1,788 | 11 | 9,246 | (48) | (7,420) | (1) |
Beginning balance at Dec. 28, 2019 | 2,827 | 12 | 9,963 | (53) | (7,095) | 0 |
Number of shares outstanding | ||||||
Common stock issued under employee equity plans | 3 | |||||
Stock-based compensation | 59 | |||||
Issuance of common stock warrant | 1 | |||||
Other | (1) | |||||
Net income | 162 | 162 | ||||
Other comprehensive income (loss) | (14) | |||||
Ending balance at Mar. 28, 2020 | $ 3,037 | $ 12 | $ 10,026 | $ (54) | $ (6,933) | $ (14) |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. and its subsidiaries (the Company or AMD) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three months ended March 28, 2020 shown in this report are not necessarily indicative of results to be expected for the full year ending December 26, 2020 . In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and s tockholders’ equity . All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019 . Certain prior period amounts have been reclassified to conform to current period presentation. The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. The three months ended March 28, 2020 and March 30, 2019 each consisted of 13 weeks. Principles of Consolidation. The condensed consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Significant Accounting Policies. There have been no material changes to the Company’s significant accounting policies in Note 2 - Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019. Recently Adopted Accounting Standards Financial Instruments. In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . This standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The Company adopted this standard in the first quarter of 2020 using the modified retrospective adoption method. This standard did not have an impact on the condensed consolidated financial statements upon adoption. Recently Issued Accounting Standards Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. This standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. While most aspects of this standard are prospective, upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed above. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its condensed consolidated financial statements. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 28, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Accounts Receivable, net As of March 28, 2020 and December 28, 2019 , Accounts receivable, net included unbilled accounts receivable of $188 million and $197 million , respectively. Unbilled receivables primarily represent work completed on semi-custom products under non-cancellable purchase orders that have no alternative use to the Company at contract inception, for which revenue has been recognized but not yet invoiced to customers. All unbilled accounts receivable are expected to be billed and collected within twelve months. Inventories, net March 28, December 28, (In millions) Raw materials $ 88 $ 94 Work in process 740 691 Finished goods 228 197 Total inventories, net $ 1,056 $ 982 Property and Equipment, net March 28, December 28, (In millions) Leasehold improvements $ 199 $ 203 Equipment 999 951 Construction in progress 136 114 Property and equipment, gross 1,334 1,268 Accumulated depreciation (794 ) (768 ) Total property and equipment, net $ 540 $ 500 Other Assets March 28, December 28, (In millions) Software technology and licenses, net $ 194 $ 210 Other 172 169 Total other assets $ 366 $ 379 Accrued Liabilities March 28, December 28, (In millions) Accrued compensation and benefits $ 205 $ 285 Marketing programs and advertising expenses 478 454 Other 387 345 Total accrued liabilities $ 1,070 $ 1,084 Remaining Performance Obligations Revenue allocated to remaining performance obligations that are unsatisfied (or partially unsatisfied) as of March 28, 2020 is $484 million , which may include amounts received from customers but not yet earned and amounts that will be invoiced and recognized as revenue in future periods associated with any combination of development services, IP licensing and product revenue. The Company expects to recognize $211 million of such amounts as revenue in the next 12 months . The revenue allocated to remaining performance obligations did not include amounts which have an original expected contractual duration of less than one year. |
Equity Joint Ventures
Equity Joint Ventures | 3 Months Ended |
Mar. 28, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Joint Ventures | Equity Joint Ventures ATMP Joint Ventures The Company holds a 15% equity interest in two joint ventures (collectively, the ATMP JV) with Tongfu Microelectronics Co., Ltd, a Chinese joint stock company, and as such, the ATMP JV is a related party of the Company. The Company has no obligation to fund the ATMP JV. The Company accounts for its equity interests in the ATMP JV under the equity method of accounting due to its significant influence over the ATMP JV. As of both March 28, 2020 and December 28, 2019 , the carrying value of the Company’s investment in the ATMP JV was $58 million . The ATMP JV provides assembly, test, mark and packaging (ATMP) services to the Company. The Company assists the ATMP JV in its management of certain raw material inventory. The purchases from and resales to the ATMP JV of inventory under the Company’s inventory management program are reported within purchases and resales with the ATMP JV and do not impact the Company’s condensed consolidated statement of operations. The Company’s total purchases from the ATMP JV during the three months ended March 28, 2020 and March 30, 2019 amounted to $151 million and $132 million , respectively. As of March 28, 2020 and December 28, 2019 , the amounts payable to the ATMP JV were $187 million and $213 million , respectively, and are included in Payables to related parties on the Company’s condensed consolidated balance sheets. The Company’s resales to the ATMP JV during the three months ended March 28, 2020 and March 30, 2019 amounted to $7 million and $26 million , respectively. As of March 28, 2020 and December 28, 2019 , the Company had receivables from the ATMP JV of $4 million and $7 million , respectively, included in Prepayment and receivables—related parties on the Company’s condensed consolidated balance sheets. THATIC Joint Ventures In February 2016, the Company and Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity (JV Partner), formed a joint venture comprised of two separate legal entities, China JV1 and China JV2 (collectively, the THATIC JV). The Company’s equity share in China JV1 and China JV2 is a majority and minority interest, respectively, funded by the Company’s contribution of certain of its patents. The JV Partner is responsible for the initial and on-going financing of the THATIC JV’s operations. The Company has no obligations to fund the THATIC JV. The Company does not consolidate either of these entities and accounts for its investments in the THATIC JV under the equity method of accounting. The THATIC JV is a related party of the Company. The Company’s share in the net losses of the THATIC JV for the three months ended March 28, 2020 is not recorded in the Company’s condensed consolidated statements of operations since the Company is not obligated to fund the THATIC JV’s losses in excess of the Company’s investment in the THATIC JV, which was zero as of March 28, 2020. In February 2016, the Company licensed certain of its intellectual property (Licensed IP) to the THATIC JV for a total of $293 million in license fees payable over several years upon achievement of certain milestones. The Company also expects to receive a royalty based on the sales of the THATIC JV’s products to be developed on the basis of such Licensed IP. The Company classifies Licensed IP income and royalty income, associated with the February 2016 agreement, as licensing gain within operating income. The Company recognized $60 million as licensing gain associated with the Licensed IP during the three months ended March 30, 2019 . In March 2017, the Company entered into a development and intellectual property agreement (Development and IP) with the THATIC JV, and also expects to receive a royalty based on the sales of the THATIC JV’s products to be developed on the basis of such agreement. The Company classifies Development and IP income and royalty income, associated with the March 2017 agreement, as revenue once earned. In addition, from time to time, the Company entered into certain agreements with the THATIC JV to provide other services primarily related to research and development. The Company’s receivable from the THATIC JV for the above agreements was $13 million as of both March 28, 2020 and December 28, 2019 , and was included in Prepayment and receivables—related parties on its condensed consolidated balance sheets. In June 2019, the U.S. Commerce Department’s Bureau of Industry and Security added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation. |
Debt and Secured Revolving Faci
Debt and Secured Revolving Facility | 3 Months Ended |
Mar. 28, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Secured Revolving Facility | Debt and Secured Revolving Facility Debt 2.125% Convertible Senior Notes Due 2026 In September 2016, the Company issued $805 million in aggregate principal amount of 2.125% Convertible Senior Notes which mature on September 1, 2026 ( 2.125% Notes). As of March 28, 2020 , the Company had $251 million aggregate principal amount of its 2.125% Notes outstanding. Pursuant to the indenture governing the 2.125% Notes, holders of the 2.125% Notes may convert them at their option during certain time periods and upon the occurrence of certain events, including; during any calendar quarter commencing after the calendar quarter ending on September 30, 2016 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (equivalent to an initial conversion price of approximately $8.00 per share of common stock). The above event was met during the first calendar quarter of 2020 and as a result, the 2.125% Notes are convertible at the option of the holder from April 1, 2020 until June 30, 2020. The Company may not redeem the 2.125% Notes prior to the maturity date, and no sinking fund is provided for the 2.125% Notes. The Company’s current intent is to deliver shares of its common stock upon conversion of the 2.125% Notes. The Company continued to classify the carrying value of the liability component of the 2.125% Notes as long-term debt and the equity component of the 2.125% Notes as permanent equity on its condensed consolidated balance sheet as of March 28, 2020 . The 2.125% Notes consisted of the following: March 28, December 28, (In millions) Principal $ 251 $ 251 Unamortized debt discount (1) (71 ) (73 ) Unamortized debt issuance costs (3 ) (3 ) Net carrying amount $ 177 $ 175 Carrying amount of the equity component, net (2) $ 95 $ 95 (1) Included in the condensed consolidated balance sheets within Long-term debt, net and amortized over the remaining life of the notes using the effective interest rate method. (2) Included in the condensed consolidated balance sheets within additional paid-in capital, net of $3 million in equity issuance costs as of March 28, 2020 and December 28, 2019 . Based on the closing price of the Company’s common stock of $46.58 on March 27, 2020, the last trading day of the three months ended March 28, 2020 , the if-converted value of the 2.125% Notes exceeded its principal amount by approximately $1.2 billion . The effective interest rate of the liability component of the 2.125% Notes is 8% . This interest rate was based on the interest rates of similar liabilities at the time of issuance that did not have associated conversion features. 7.50% Senior Notes Due 2022 On August 15, 2012, the Company issued $500 million of its 7.50% Senior Notes due 2022 ( 7.50% Notes). As of March 28, 2020 , the outstanding aggregate principal amount of the 7.50% Notes was $312 million . Potential Repurchase of Outstanding Notes The Company may elect to purchase or otherwise retire the 7.50% Notes and 2.125% Notes with cash, stock or other assets from time to time in open market or privately negotiated transactions, either directly or through intermediaries, or by tender offer when the Company believes the market conditions are favorable to do so. Secured Revolving Facility On June 7, 2019, the Company entered into a secured revolving credit facility for up to $500 million (the Secured Revolving Facility) pursuant to a credit agreement by and among the Company, as borrower, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (the Credit Agreement). The Secured Revolving Facility consists of a $500 million , five-year secured revolving loan facility, including a $50 million swingline subfacility and a $75 million sublimit for letters of credit. The Company’s obligations under the Credit Agreement are secured by a lien on substantially all the Company’s property, other than intellectual property. The Credit Agreement also provides the ability to increase the Secured Revolving Facility or incur incremental term loans or other incremental equivalent debt by an amount not to exceed certain amounts as set forth in the Credit Agreement. The Company’s available borrowings under the Secured Revolving Facility are also subject to reduction by an amount equal to the net cash proceeds of (i) any debt issuances not permitted by the Secured Revolving Facility and (ii) any non-ordinary course asset sales, in excess of $250 million , if such net cash proceeds are not reinvested by the Company within twelve months of receipt. As of March 28, 2020 , there were no borrowings outstanding under the Credit Agreement, and the Company was in compliance with all required covenants under the Credit Agreement. As of March 28, 2020 , the Company had $14 million of letters of credit outstanding under the Credit Agreement. As a precautionary measure given the current market environment, on April 6, 2020, the Company borrowed $200 million under the Credit Agreement via the LIBOR rate loan option. The borrowing carries an annual interest rate of 2.37% through the maturity date of July 6, 2020. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 28, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments Fair Value Measurements Financial Instruments Recorded at Fair Value on a Recurring Basis Financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 28, 2020 and December 28, 2019 are summarized below: Total Fair Cash and Marketable Securities Other Current Liabilities (In millions) March 28, 2020 Level 1 (1) Government money market funds $ 1 $ 1 $ — $ — Total level 1 $ 1 $ 1 $ — $ — Level 2 (2) Commercial paper $ 349 $ 294 $ 55 $ — Foreign currency derivative contracts 13 — — 13 Total level 2 $ 362 $ 294 $ 55 $ 13 Total $ 363 $ 295 $ 55 $ 13 Total Fair Cash and Marketable Securities Other Current Assets Other Current Liabilities (In millions) December 28, 2019 Level 1 (1) Government money market funds $ 1 $ 1 $ — $ — $ — Total level 1 $ 1 $ 1 $ — $ — $ — Level 2 (2) Commercial paper $ 37 $ — $ 37 $ — $ — Foreign currency derivative contracts 4 — $ — $ 2 2 Total level 2 $ 41 $ — $ 37 $ 2 $ 2 Total $ 42 $ 1 $ 37 $ 2 $ 2 (1) Level 1 fair value estimates are based on quoted prices for identical instruments in active markets. (2) Level 2 fair value estimates are based on quoted prices for identical or comparable instruments in markets that are not active or comparable instruments in active markets. In addition to the amounts presented above, as of both March 28, 2020 and December 28, 2019 , the Company had $4 million of investments in government money market funds, used as collateral for letters of credit deposits, which were included in Other current assets on the Company’s condensed consolidated balance sheets. As of March 28, 2020 and December 28, 2019 , the Company also had $33 million and $30 million , respectively, of investments in mutual funds held in a Rabbi trust established for the Company’s deferred compensation plan, which were included in Other assets on the Company’s condensed consolidated balance sheets. These government money market funds and mutual funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized cost approximates the fair value for all periods presented. The Company is restricted from accessing these investments. Financial Instruments Not Recorded at Fair Value on a Recurring Basis The Company carries its financial instruments at fair value with the exception of its debt. Financial instruments that are not recorded at fair value are measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values of the Company’s financial instruments not recorded at fair value are as follows: March 28, 2020 December 28, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (In millions) Long-term debt, net (1) $ 488 $ 1,810 $ 486 $ 1,823 (1) Carrying amounts of long-term debt are net of unamortized debt issuance costs of $4 million as of both March 28, 2020 and December 28, 2019 , and net of unamortized debt discount associated with the 2.125% Notes of $71 million as of March 28, 2020 and $73 million as of December 28, 2019 . The carrying amounts above do not include the equity component related to the conversion feature of the 2.125% Notes of $95 million as of both March 28, 2020 and December 28, 2019 . The estimated fair value of the Company’s long-term debt is based on Level 2 inputs. The Company’s 2.125% Notes, included in Long-term debt, net above, were convertible at the option of the holder as of March 28, 2020 . The estimated fair value of the 2.125% Notes considers the relationship between the Company’s stock price of $46.58 as of March 27, 2020, the last trading day of the three months ended March 28, 2020 and the equivalent initial conversion price of approximately $8.00 per share of common stock. The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing payment terms. Hedging Transactions and Derivative Financial Instruments Cash Flow Hedges Designated as Accounting Hedges and Foreign Currency Forward Contracts Not Designated as Accounting Hedges The Company hedges its exposure to foreign currency exchange rate risk related to future forecasted transaction cash flows denominated in currencies other than U.S. Dollars over a maximum of 12 months. The contracts generally mature within 12 months, and, upon maturity, the amounts recorded in Accumulated other comprehensive income (loss) are expected to be reclassified into earnings. The Company also enters into foreign currency forward contracts to reduce the short-term effects of foreign currency fluctuations on certain receivables or payables denominated in currencies other than U.S. Dollars. These forward contracts generally mature within 3 months. The gains or losses on these contracts are recognized in other income (expense), net in the condensed consolidated statements of operations based on the changes in fair value. As of March 28, 2020 and December 28, 2019 , the notional values of the Company’s outstanding foreign currency forward contracts were $583 million and $739 million , respectively. Unrealized and realized gains and losses for these contracts were not material for the three months ended March 28, 2020 and March 30, 2019 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The table below summarizes the changes in accumulated other comprehensive income (loss) for the quarters ended March 28, 2020 and March 30, 2019 : Three Months Ended March 28, March 30, (In millions) Beginning balance $ — $ (8 ) Net unrealized gains (losses) on cash flow hedges arising during the period (17 ) 5 Net losses reclassified into income 3 2 Total other comprehensive income (loss) (14 ) 7 Ending balance $ (14 ) $ (1 ) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus potentially dilutive shares outstanding during the period. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, the assumed issuance of common shares under the stock purchase plan, and the assumed exercise of warrants issued to purchase the Company’s common stock. Potentially dilutive shares issuable upon conversion of the 2.125% Notes are calculated using the if-converted method. The following table sets forth the components of basic and diluted earnings per share: Three Months Ended March 28, March 30, (In millions, except per share amounts) Numerator Net income for basic earnings per share $ 162 $ 16 Effect of potentially dilutive shares: Interest expense related to the 2.125% Notes 4 — Net income for diluted earnings per share $ 166 $ 16 Denominator Basic weighted average shares 1,170 1,044 Effect of potentially dilutive shares: Employee equity plans and warrants 23 50 2.125% Notes 31 — Diluted weighted average shares 1,224 1,094 Earnings per share: Basic $ 0.14 $ 0.01 Diluted $ 0.14 $ 0.01 Potential shares from employee equity plans and the conversion of the 2.125% Notes totaling 103 million shares for the three months ended March 30, 2019 were not included in the earnings per share calculation because their inclusion would have been anti-dilutive. |
Common Stock and Employee Equit
Common Stock and Employee Equity Plans | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Common Stock and Employee Equity Plans | Common Stock and Employee Equity Plans Shares of common stock outstanding were as follows: Three Months Ended March 28, March 30, (In millions) Number of shares outstanding Balance, beginning of period 1,170 1,005 Common stock issued under employee equity plans 1 1 Issuance of common stock upon warrant exercise — 75 Issuance of treasury stock to partially settle debt — 1 Balance, end of period 1,171 1,082 Stock-based compensation expense was allocated in the condensed consolidated statements of operations as follows: Three Months Ended March 28, March 30, (In millions) Cost of sales $ 2 $ 1 Research and development 37 27 Marketing, general and administrative 20 13 Total $ 59 $ 41 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 28, 2020 , the Company recorded an income tax expense of $6 million associated with foreign income taxes and withholding taxes. For the three months ended March 30, 2019 , the Company recorded an income tax benefit of $13 million associated with a credit to U.S. taxes due a reduction of U.S. income taxes accrued in the prior year. As of March 28, 2020 , substantially all the Company’s U.S. and foreign deferred tax assets, net of deferred tax liabilities, were subject to valuation allowances. After evaluating all available evidence, the Company determined that the valuation allowances should be maintained. The Company’s total gross unrecognized tax benefits were $66 million as of March 28, 2020 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Management, including the Chief Operating Decision Maker, who is the Company’s Chief Executive Officer, reviews and assesses operating performance using segment net revenue and operating income (loss). These performance measures include the allocation of expenses to the operating segments based on management’s judgment. The Company has the following two reportable segments: • the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs and development services. The Company also licenses portions of its IP portfolio; and • the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. The Company also licenses portions of its IP portfolio. In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. This category primarily includes stock-based compensation expense. The following table provides a summary of net revenue and operating income by segment: Three Months Ended March 28, March 30, (In millions) Net revenue: Computing and Graphics $ 1,438 $ 831 Enterprise, Embedded and Semi-Custom 348 441 Total net revenue $ 1,786 $ 1,272 Operating income (loss): Computing and Graphics $ 262 $ 16 Enterprise, Embedded and Semi-Custom (26 ) 68 All Other (1) (59 ) (46 ) Total operating income $ 177 $ 38 (1) For the three months ended March 28, 2020, All Other operating loss was related to stock-based compensation expense. All Other operating loss of $46 million for the three months ended March 28, 2019 consisted of $41 million stock-based compensation expense and $5 million co ntingent loss accrual on a legal matter. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Shareholder Derivative Lawsuits (Wessels, Hamilton and Ha) On March 20, 2014, a purported shareholder derivative lawsuit captioned Wessels v. Read, et al. , Case No. 1:14 cv-262486 (Wessels) was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the Santa Clara County Superior Court of the State of California. The complaint purports to assert claims against the Company and certain individual directors and officers for breach of fiduciary duty, waste of corporate assets and unjust enrichment. The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual directors and officers regarding its 32nm technology and “Llano” product, which statements and omissions, the plaintiffs claim, allegedly operated to artificially inflate the price paid for the Company’s common stock during the period. On April 27, 2015, a similar purported shareholder derivative lawsuit captioned Christopher Hamilton and David Hamilton v. Barnes, et al. , Case No. 5:15-cv-01890 (Hamilton) was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the United States District Court for the Northern District of California. On September 29, 2015, a similar purported shareholder derivative lawsuit captioned Jake Ha v Caldwell, et al., Case No. 3:15-cv-04485 (Ha) was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the United States District Court for the Northern District of California. The lawsuit also seeks a court order voiding the stockholder vote on the Company’s 2015 proxy. The case was transferred to the judge handling the Hamilton Lawsuit and is now Case No. 4:15-cv-04485. The Wessels, Hamilton and Ha shareholder derivative lawsuits were stayed pending resolution of a class action lawsuit captioned Hatamian v. AMD, et al. , C.A. No. 3:14-cv-00226 filed against the Company in the United States District Court for the Northern District of California (the Hatamian Lawsuit). The Hatamian Lawsuit asserted claims against the Company and certain of its officers for alleged violations of Section 10(b) of the Exchange Act of 1934, as amended (the Exchange Act), and SEC Rule 10b-5 concerning certain statements regarding its 32nm technology and “Llano” products. On October 9, 2017, the parties signed a definitive settlement agreement resolving the Hatamian Lawsuit and submitted it to the Court for approval. Under the terms of this agreement, the settlement was funded entirely by certain of the Company’s insurance carriers and the defendants continued to deny any liability or wrongdoing. On March 2, 2018, the court approved the settlement and entered a final judgment in the Hatamian Lawsuit. On January 30, 2018, the Wessels and Hamilton plaintiffs amended their complaints. On February 2, 2018, the Ha plaintiff also filed an amended complaint. On February 22, 2018, the Company filed motions to dismiss the Hamilton and Ha plaintiffs’ amended complaints. On April 2, 2018, the Company filed a demurrer seeking to dismiss the Wessels amended complaint. On July 23, 2018, the Santa Clara Superior Court sustained the Company’s demurrer in the Wessels case, dismissing all claims in that matter with prejudice. The Wessels plaintiff filed a Notice of Appeal on September 27, 2018. On October 4, 2018, the Federal Court issued an order dismissing the Hamilton and Ha amended complaints. The Hamilton plaintiffs filed a Notice of Appeal on October 8, 2018, and the Ha plaintiffs filed a Notice of Appeal on October 15, 2018. On November 19, 2018, the Hamilton and Ha plaintiffs filed a motion seeking summary reversal of the order dismissing their claims. The Company opposed this motion on December 13, 2018, and the Court denied it on February 25, 2019. The Wessels appeal is currently pending. On March 16, 2020, the Ninth Circuit reversed and remanded the district court’s dismissal of the Hamilton complaint and affirmed the district court’s dismissal of the Ha complaint. Based upon information presently known to management, the Company believes that the potential liability, if any, stemming from the above matters will not have a material adverse effect on its financial condition, cash flows or results of operations. Dickey Litigation On October 26, 2015, a putative class action complaint captioned Dickey et al. v. AMD , No. 15-cv-04922 was filed against the Company in the United States District Court for the Northern District of California. Plaintiffs allege that the Company misled consumers by using the term “eight cores” in connection with the marketing of certain AMD FX CPUs that are based on the Company’s “Bulldozer” core architecture. The plaintiffs allege these products cannot perform eight calculations simultaneously, without restriction. The plaintiffs seek to obtain damages under several causes of action for a nationwide class of consumers who allegedly were deceived into purchasing certain Bulldozer-based CPUs that were marketed as containing eight cores. The plaintiffs also seek attorneys’ fees. On December 21, 2015, the Company filed a motion to dismiss the complaint, which was granted on April 7, 2016. The plaintiffs then filed an amended complaint with a narrowed putative class definition, which the Court dismissed upon the Company’s motion on October 31, 2016. The plaintiffs subsequently filed a second amended complaint, and the Company filed a motion to dismiss the second amended complaint. On June 14, 2017, the Court issued an order granting in part and denying in part the Company’s motion to dismiss, and allowing the plaintiffs to move forward with a portion of their complaint. On March 27, 2018, plaintiffs filed their motion for class certification. On January 17, 2019, the Court granted plaintiffs’ motion for class certification. The class definition does not encompass the Company’s Ryzen or EPYC processors. On January 31, 2019, the Company filed a petition in the Ninth Circuit Court of Appeals, seeking review of certain aspects of the January 17, 2019 class certification order. On May 9, 2019, the parties attended mediation and reached a tentative settlement. On June 3, 2019, the Ninth Circuit Court of Appeals denied the Company’s petition seeking appellate review of the January 17, 2019 class certification order. On August 9, 2019, the parties executed a formal settlement agreement. On August 23, 2019, plaintiffs filed their motion for preliminary approval of the settlement agreement. On October 4, 2019, the Court granted the motion for preliminary approval of the settlement agreement. On February 21, 2020, the Court granted the plaintiff’s motion for final approval of the settlement agreement. On February 28, 2020, the Court issued a final order and judgment. The settlement of the above matter did not have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Monterey Research Litigation On November 15, 2019, Monterey Research, LLC filed a patent infringement complaint against the Company in the United States District Court for the District of Delaware. Monterey Research alleges that the Company infringes six U.S. patents: 6,534,805 (related to SRAM cell design); 6,629,226 (related to read interface protocols); 6,651,134 (related to memory devices); 6,765,407 (related to programmable digital circuits); 6,961,807 (related to integrated circuits and associated memory systems); and 8,373,455 (related to output buffer circuits). Monterey Research seeks unspecified monetary damages, enhanced damages, interest, fees, expenses, costs, and injunctive relief against the Company. On January 22, 2020, the Company filed a motion to dismiss part of Monterey Research’s complaint. On February 5, 2020, Monterey Research filed an amended complaint. On February 19, 2020, the Company filed a renewed motion to dismiss part of Monterey Research’s complaint. Based upon information presently known to management, the Company believes that the potential liability, if any, stemming from the above matters will not have a material adverse effect on its financial condition, cash flows or results of operations. Other Legal Matters The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With respect to these matters, based on the management’s current knowledge, the Company believes that the amount or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. and its subsidiaries (the Company or AMD) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three months ended March 28, 2020 shown in this report are not necessarily indicative of results to be expected for the full year ending December 26, 2020 . In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and s tockholders’ equity . All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019 . Certain prior period amounts have been reclassified to conform to current period presentation. |
Fiscal Period | The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. The three months ended March 28, 2020 and March 30, 2019 |
Principles of Consolidation | Principles of Consolidation. The condensed consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards Financial Instruments. In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . This standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The Company adopted this standard in the first quarter of 2020 using the modified retrospective adoption method. This standard did not have an impact on the condensed consolidated financial statements upon adoption. Recently Issued Accounting Standards Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. This standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. While most aspects of this standard are prospective, upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed above. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its condensed consolidated financial statements. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories, Net | Inventories, net March 28, December 28, (In millions) Raw materials $ 88 $ 94 Work in process 740 691 Finished goods 228 197 Total inventories, net $ 1,056 $ 982 |
Property and Equipment, Net | Property and Equipment, net March 28, December 28, (In millions) Leasehold improvements $ 199 $ 203 Equipment 999 951 Construction in progress 136 114 Property and equipment, gross 1,334 1,268 Accumulated depreciation (794 ) (768 ) Total property and equipment, net $ 540 $ 500 |
Other Assets | Other Assets March 28, December 28, (In millions) Software technology and licenses, net $ 194 $ 210 Other 172 169 Total other assets $ 366 $ 379 |
Accrued Liabilities | Accrued Liabilities March 28, December 28, (In millions) Accrued compensation and benefits $ 205 $ 285 Marketing programs and advertising expenses 478 454 Other 387 345 Total accrued liabilities $ 1,070 $ 1,084 |
Debt and Secured Revolving Fa_2
Debt and Secured Revolving Facility (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The 2.125% Notes consisted of the following: March 28, December 28, (In millions) Principal $ 251 $ 251 Unamortized debt discount (1) (71 ) (73 ) Unamortized debt issuance costs (3 ) (3 ) Net carrying amount $ 177 $ 175 Carrying amount of the equity component, net (2) $ 95 $ 95 (1) Included in the condensed consolidated balance sheets within Long-term debt, net and amortized over the remaining life of the notes using the effective interest rate method. (2) Included in the condensed consolidated balance sheets within additional paid-in capital, net of $3 million in equity issuance costs as of March 28, 2020 and December 28, 2019 . |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Assets and Liabilities Measured on a Recurring Basis | Financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 28, 2020 and December 28, 2019 are summarized below: Total Fair Cash and Marketable Securities Other Current Liabilities (In millions) March 28, 2020 Level 1 (1) Government money market funds $ 1 $ 1 $ — $ — Total level 1 $ 1 $ 1 $ — $ — Level 2 (2) Commercial paper $ 349 $ 294 $ 55 $ — Foreign currency derivative contracts 13 — — 13 Total level 2 $ 362 $ 294 $ 55 $ 13 Total $ 363 $ 295 $ 55 $ 13 Total Fair Cash and Marketable Securities Other Current Assets Other Current Liabilities (In millions) December 28, 2019 Level 1 (1) Government money market funds $ 1 $ 1 $ — $ — $ — Total level 1 $ 1 $ 1 $ — $ — $ — Level 2 (2) Commercial paper $ 37 $ — $ 37 $ — $ — Foreign currency derivative contracts 4 — $ — $ 2 2 Total level 2 $ 41 $ — $ 37 $ 2 $ 2 Total $ 42 $ 1 $ 37 $ 2 $ 2 (1) Level 1 fair value estimates are based on quoted prices for identical instruments in active markets. (2) Level 2 fair value estimates are based on quoted prices for identical or comparable instruments in markets that are not active or comparable instruments in active markets. |
Financial Instruments Not Recorded at Fair Value on a Recurring Basis | The carrying amounts and estimated fair values of the Company’s financial instruments not recorded at fair value are as follows: March 28, 2020 December 28, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (In millions) Long-term debt, net (1) $ 488 $ 1,810 $ 486 $ 1,823 (1) Carrying amounts of long-term debt are net of unamortized debt issuance costs of $4 million as of both March 28, 2020 and December 28, 2019 , and net of unamortized debt discount associated with the 2.125% Notes of $71 million as of March 28, 2020 and $73 million as of December 28, 2019 . The carrying amounts above do not include the equity component related to the conversion feature of the 2.125% Notes of $95 million as of both March 28, 2020 and December 28, 2019 . |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes the changes in accumulated other comprehensive income (loss) for the quarters ended March 28, 2020 and March 30, 2019 : Three Months Ended March 28, March 30, (In millions) Beginning balance $ — $ (8 ) Net unrealized gains (losses) on cash flow hedges arising during the period (17 ) 5 Net losses reclassified into income 3 2 Total other comprehensive income (loss) (14 ) 7 Ending balance $ (14 ) $ (1 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings (Loss) Per Share | The following table sets forth the components of basic and diluted earnings per share: Three Months Ended March 28, March 30, (In millions, except per share amounts) Numerator Net income for basic earnings per share $ 162 $ 16 Effect of potentially dilutive shares: Interest expense related to the 2.125% Notes 4 — Net income for diluted earnings per share $ 166 $ 16 Denominator Basic weighted average shares 1,170 1,044 Effect of potentially dilutive shares: Employee equity plans and warrants 23 50 2.125% Notes 31 — Diluted weighted average shares 1,224 1,094 Earnings per share: Basic $ 0.14 $ 0.01 Diluted $ 0.14 $ 0.01 |
Common Stock and Employee Equ_2
Common Stock and Employee Equity Plans (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Equity [Abstract] | |
Schedule of Common Shares Outstanding | Shares of common stock outstanding were as follows: Three Months Ended March 28, March 30, (In millions) Number of shares outstanding Balance, beginning of period 1,170 1,005 Common stock issued under employee equity plans 1 1 Issuance of common stock upon warrant exercise — 75 Issuance of treasury stock to partially settle debt — 1 Balance, end of period 1,171 1,082 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense was allocated in the condensed consolidated statements of operations as follows: Three Months Ended March 28, March 30, (In millions) Cost of sales $ 2 $ 1 Research and development 37 27 Marketing, general and administrative 20 13 Total $ 59 $ 41 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting [Abstract] | |
Summary of Net Revenue and Operating Income (Loss) by Segment | The following table provides a summary of net revenue and operating income by segment: Three Months Ended March 28, March 30, (In millions) Net revenue: Computing and Graphics $ 1,438 $ 831 Enterprise, Embedded and Semi-Custom 348 441 Total net revenue $ 1,786 $ 1,272 Operating income (loss): Computing and Graphics $ 262 $ 16 Enterprise, Embedded and Semi-Custom (26 ) 68 All Other (1) (59 ) (46 ) Total operating income $ 177 $ 38 (1) For the three months ended March 28, 2020, All Other operating loss was related to stock-based compensation expense. All Other operating loss of $46 million for the three months ended March 28, 2019 consisted of $41 million stock-based compensation expense and $5 million co ntingent loss accrual on a legal matter. |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Mar. 28, 2020 | Dec. 28, 2019 |
Accounts Receivable, Net | ||
Unbilled accounts receivables | $ 188 | $ 197 |
Inventories, Net | ||
Raw materials | 88 | 94 |
Work in process | 740 | 691 |
Finished goods | 228 | 197 |
Total inventories, net | 1,056 | 982 |
Property and Equipment, Net | ||
Leasehold improvements | 199 | 203 |
Equipment | 999 | 951 |
Construction in progress | 136 | 114 |
Property and equipment, gross | 1,334 | 1,268 |
Accumulated depreciation | (794) | (768) |
Total property and equipment, net | 540 | 500 |
Other Assets | ||
Software technology and licenses, net | 194 | 210 |
Other | 172 | 169 |
Total other assets | 366 | 379 |
Accrued Liabilities | ||
Accrued compensation and benefits | 205 | 285 |
Marketing programs and advertising expenses | 478 | 454 |
Other | 387 | 345 |
Total accrued liabilities | $ 1,070 | $ 1,084 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Remaining Performance Obligations) (Details) $ in Millions | Mar. 28, 2020USD ($) |
Balance Sheet Related Disclosures [Abstract] | |
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 484 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-29 | |
Balance Sheet Related Disclosures [Abstract] | |
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 211 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 12 months |
Equity Joint Ventures (Details)
Equity Joint Ventures (Details) | 3 Months Ended | |||
Mar. 28, 2020USD ($)joint_venturelegal_entity | Mar. 30, 2019USD ($) | Dec. 28, 2019USD ($) | Feb. 29, 2016USD ($) | |
Investment Holdings [Line Items] | ||||
Carrying value of investment | $ 58,000,000 | $ 58,000,000 | ||
Payables to related parties | 187,000,000 | 213,000,000 | ||
Receivables from related parties | $ 17,000,000 | 20,000,000 | ||
ATMP JV | ||||
Investment Holdings [Line Items] | ||||
Number of joint ventures | joint_venture | 2 | |||
Carrying value of investment | $ 58,000,000 | 58,000,000 | ||
ATMP JV | Joint Venture | ||||
Investment Holdings [Line Items] | ||||
Ownership percentage | 15.00% | |||
Purchases from related party | $ 151,000,000 | $ 132,000,000 | ||
Payables to related parties | 187,000,000 | 213,000,000 | ||
Revenue from related parties | 7,000,000 | 26,000,000 | ||
Receivables from related parties | 4,000,000 | 7,000,000 | ||
THATIC JV | ||||
Investment Holdings [Line Items] | ||||
Carrying value of investment | 0 | |||
Receivables from related parties | $ 13,000,000 | $ 13,000,000 | ||
Number of legal entities | legal_entity | 2 | |||
Licensing gain | THATIC JV | ||||
Investment Holdings [Line Items] | ||||
Estimated license fees expected to be earned over several years pursuant to a licensing agreement | $ 293,000,000 | |||
Operating income | $ 60,000,000 |
Debt and Secured Revolving Fa_3
Debt and Secured Revolving Facility (Narrative) (Details) | Apr. 06, 2020USD ($) | Jun. 07, 2019USD ($) | Sep. 30, 2016USD ($)day$ / shares | Mar. 28, 2020USD ($)$ / shares | Dec. 28, 2019USD ($) | Aug. 15, 2012USD ($) |
2.125% Convertible Senior Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 2.125% | 2.125% | ||||
Principal amount | $ 805,000,000 | $ 251,000,000 | $ 251,000,000 | |||
Conversion price (in usd per share) | $ / shares | $ 8 | |||||
Share price (in usd per share) | $ / shares | $ 46.58 | |||||
If-converted value in excess of principal | $ 1,200,000,000 | |||||
Effective interest rate | 8.00% | |||||
2.125% Convertible Senior Notes due 2026 | Debt Instrument, circumstance 1 | ||||||
Debt Instrument [Line Items] | ||||||
Threshold trading days | day | 20 | |||||
Threshold consecutive trading days | day | 30 | |||||
Threshold percentage of conversion price | 130.00% | |||||
7.50% Senior Notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 7.50% | |||||
Principal amount | $ 500,000,000 | |||||
Outstanding aggregate principal amount | $ 312,000,000 | |||||
Secured Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding, amount | 14,000,000 | |||||
Secured Revolving Credit Facility | Secured Revolving Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Debt instrument, term | 5 years | |||||
Amount of assets sales that must be reinvested within twelve month period | $ 250,000,000 | |||||
Long-term line of credit | $ 0 | |||||
Secured Revolving Credit Facility | Secured Revolving Line of Credit | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 2.37% | |||||
Proceeds from lines of credit | $ 200,000,000 | |||||
Secured Revolving Credit Facility | Swingline Subfacility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 50,000,000 | |||||
Secured Revolving Credit Facility | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 |
Debt and Secured Revolving Fa_4
Debt and Secured Revolving Facility (Convertible Debt) (Details) - 2.125% Convertible Senior Notes due 2026 - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||
Principal | $ 251,000,000 | $ 251,000,000 | $ 805,000,000 |
Unamortized debt discount | (71,000,000) | (73,000,000) | |
Unamortized debt issuance costs | (3,000,000) | (3,000,000) | |
Net carrying amount | 177,000,000 | 175,000,000 | |
Carrying amount of the equity component, net | 95,000,000 | 95,000,000 | |
Equity issuance costs | $ 3,000,000 | $ 3,000,000 |
Financial Instruments (Cash, Ca
Financial Instruments (Cash, Cash Equivalents, and Marketable Securities Fair Value Measurements) (Details) - USD ($) $ in Millions | Mar. 28, 2020 | Dec. 28, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | $ 363 | $ 42 |
Cash and Cash Equivalents | 295 | 1 |
Marketable Securities | 55 | 37 |
Other Current Assets | 2 | |
Other Current Liabilities | 13 | 2 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | 1 | 1 |
Cash and Cash Equivalents | 1 | 1 |
Marketable Securities | 0 | 0 |
Other Current Assets | 0 | |
Other Current Liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | 362 | 41 |
Cash and Cash Equivalents | 294 | 0 |
Marketable Securities | 55 | 37 |
Other Current Assets | 2 | |
Other Current Liabilities | 13 | 2 |
Government money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | 1 | 1 |
Cash and Cash Equivalents | 1 | 1 |
Marketable Securities | 0 | 0 |
Other Current Assets | 0 | |
Other Current Liabilities | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | 349 | 37 |
Cash and Cash Equivalents | 294 | 0 |
Marketable Securities | 55 | 37 |
Other Current Assets | 0 | |
Other Current Liabilities | 0 | 0 |
Foreign Exchange Contract [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value Asset (Liability) | (13) | 4 |
Cash and Cash Equivalents | 0 | 0 |
Marketable Securities | 0 | 0 |
Other Current Assets | 2 | |
Other Current Liabilities | $ 13 | $ 2 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Dec. 28, 2019 | |
Foreign Currency Forward Contracts | ||
Schedule of Investments [Line Items] | ||
Derivative, notional amount | $ 583 | $ 739 |
Cash Flow Hedging | Foreign Currency Forward Contracts | ||
Schedule of Investments [Line Items] | ||
Derivative, term of contract | 12 months | |
Contracts not designated as hedging instruments: | Foreign Currency Forward Contracts | ||
Schedule of Investments [Line Items] | ||
Derivative, term of contract | 3 months | |
2.125% Convertible Senior Notes due 2026 | ||
Schedule of Investments [Line Items] | ||
Stated interest rate | 2.125% | |
Share price (in usd per share) | $ 46.58 | |
Conversion price (in usd per share) | $ 8 | |
Level 1 | Government money market funds | ||
Schedule of Investments [Line Items] | ||
Investment in money market fund and bank guarantee | $ 4 | 4 |
Mutual Fund | Level 1 | ||
Schedule of Investments [Line Items] | ||
Other assets | $ 33 | $ 30 |
Financial Instruments (Schedule
Financial Instruments (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments not Recorded at Fair Value) (Details) - USD ($) $ in Millions | Mar. 28, 2020 | Dec. 28, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unamortized debt issuance costs | $ 4 | $ 4 |
2.125% Convertible Senior Notes due 2026 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate | 2.125% | |
Unamortized debt discount | $ 71 | 73 |
Carrying amount of the equity component, net | 95 | 95 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, net | 488 | 486 |
Estimated Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, net | $ 1,810 | $ 1,823 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Number of shares outstanding | ||
Beginning balance | $ 2,827 | |
Ending balance | 3,037 | $ 1,788 |
AOCI Attributable to Parent | ||
Number of shares outstanding | ||
Beginning balance | 0 | (8) |
Total other comprehensive income (loss) | (14) | 7 |
Ending balance | (14) | (1) |
Net unrealized gains (losses) on cash flow hedges arising during the period | ||
Number of shares outstanding | ||
Net unrealized gains (losses) on cash flow hedges arising during the period | (17) | 5 |
Net losses reclassified into income | 3 | 2 |
Total other comprehensive income (loss) | $ (14) | $ 7 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Numerator | ||
Net income for basic earnings per share | $ 162 | $ 16 |
Effect of potentially dilutive shares: | ||
Interest expense related to the 2.125% Notes | 4 | 0 |
Net income for diluted earnings per share | $ 166 | $ 16 |
Denominator | ||
Basic weighted-average shares (in shares) | 1,170 | 1,044 |
Effect of potentially dilutive shares: | ||
Employee equity plans and warrants (in shares) | 23 | 50 |
2.125% Notes (in shares) | 31 | 0 |
Diluted weighted-average shares (in shares) | 1,224 | 1,094 |
Earnings per share: | ||
Basic (in usd per share) | $ 0.14 | $ 0.01 |
Diluted (in usd per share) | $ 0.14 | $ 0.01 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) shares in Millions | 3 Months Ended |
Mar. 28, 2020shares | |
Stock Options, Restricted Stock Units, Conversion of Notes, and Warrants Under Warrant Agreement | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive shares (in shares) | 103 |
2.125% Convertible Senior Notes due 2026 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Stated interest rate | 2.125% |
Common Stock and Employee Equ_3
Common Stock and Employee Equity Plans (Schedule of Common Shares Outstanding) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Number of shares outstanding | ||
Balance, beginning of period (in shares) | 1,175 | |
Balance, end of period (in shares) | 1,176 | |
Common stock | ||
Number of shares outstanding | ||
Balance, beginning of period (in shares) | 1,170 | 1,005 |
Common stock issued under employee equity plans (in shares) | 1 | 1 |
Issuance of common stock upon warrant exercise (in shares) | 0 | 75 |
Balance, end of period (in shares) | 1,171 | 1,082 |
Treasury stock | ||
Number of shares outstanding | ||
Issuance of treasury stock to partially settle debt (in shares) | 0 | 1 |
Common Stock and Employee Equ_4
Common Stock and Employee Equity Plans (Schedule of Stock-based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 59 | $ 41 |
Cost of sales | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 2 | 1 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 37 | 27 |
Marketing, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 20 | $ 13 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 6 | $ (13) |
Unrecognized tax benefits | $ 66 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | |
Mar. 28, 2020USD ($)segment | Mar. 30, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 1,786 | $ 1,272 |
Total operating income (loss) | 177 | 38 |
Share-based compensation expense | 59 | 41 |
Computing and Graphics | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 1,438 | 831 |
Enterprise, Embedded and Semi-Custom | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 348 | 441 |
Operating Segments | Computing and Graphics | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | 262 | 16 |
Operating Segments | Enterprise, Embedded and Semi-Custom | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | (26) | 68 |
All Other | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | (59) | (46) |
Share-based compensation expense | $ 59 | 41 |
Loss contingency | $ 5 |
Contingencies (Details)
Contingencies (Details) | Nov. 15, 2019patent |
Monterey Research Litigation | |
Loss Contingencies [Line Items] | |
Patents allegedly infringed, number | 6 |