Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 27, 2021 | Apr. 23, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 27, 2021 | |
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, $0.01 par value | |
Trading Symbol | AMD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,215,020,976 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000002488 | |
Current Fiscal Year End Date | --12-25 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 3,445 | $ 1,786 |
Cost of sales | 1,858 | 968 |
Gross profit | 1,587 | 818 |
Research and development | 610 | 442 |
Marketing, general and administrative | 319 | 199 |
Licensing gain | (4) | 0 |
Operating income | 662 | 177 |
Interest expense | (9) | (13) |
Other income (expense), net | (11) | 4 |
Income before income taxes and equity income | 642 | 168 |
Income tax provision | 89 | 6 |
Equity income in investee | 2 | 0 |
Net income | $ 555 | $ 162 |
Earnings per share | ||
Basic (in usd per share) | $ 0.46 | $ 0.14 |
Diluted (in usd per share) | $ 0.45 | $ 0.14 |
Shares used in per share calculation | ||
Basic (in shares) | 1,213 | 1,170 |
Diluted (in shares) | 1,231 | 1,224 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 555 | $ 162 |
Other comprehensive loss, net of tax: | ||
Net change in unrealized losses on cash flow hedges | (11) | (14) |
Total comprehensive income | $ 544 | $ 148 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,763 | $ 1,595 |
Short-term investments | 1,353 | 695 |
Accounts receivable, net | 2,178 | 2,066 |
Inventories | 1,653 | 1,399 |
Receivables from related parties | 7 | 10 |
Prepaid expenses and other current assets | 243 | 378 |
Total current assets | 7,197 | 6,143 |
Property and equipment, net | 681 | 641 |
Operating lease right-of-use assets | 241 | 208 |
Goodwill | 289 | 289 |
Investment: equity method | 65 | 63 |
Deferred tax assets | 1,162 | 1,245 |
Other non-current assets | 412 | 373 |
Total assets | 10,047 | 8,962 |
Current liabilities: | ||
Accounts payable | 949 | 468 |
Payables to related parties | 40 | 78 |
Accrued liabilities | 1,779 | 1,796 |
Other current liabilities | 96 | 75 |
Total current liabilities | 2,864 | 2,417 |
Long-term debt, net | 313 | 330 |
Long-term operating lease liabilities | 238 | 201 |
Other long-term liabilities | 155 | 177 |
Contingencies (See Note 12) | ||
Capital stock: | ||
Common stock, par value $0.01; shares authorized: 2,250; shares issued: 1,221 and 1,217; shares outstanding: 1,215 and 1,211 | 12 | 12 |
Additional paid-in capital | 10,658 | 10,544 |
Treasury stock, at cost (shares held: 6 and 6) | (141) | (131) |
Accumulated deficit | (4,058) | (4,605) |
Accumulated other comprehensive income | 6 | 17 |
Total stockholders’ equity | 6,477 | 5,837 |
Total liabilities and stockholders’ equity | $ 10,047 | $ 8,962 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 2,250 | 2,250 |
Common stock, issued (in shares) | 1,221 | 1,217 |
Common stock, outstanding (in shares) | 1,215 | 1,211 |
Treasury stock (in shares) | 6 | 6 |
Cash and cash equivalents | $ 1,763 | $ 1,595 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 555 | $ 162 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 95 | 68 |
Stock-based compensation | 85 | 59 |
Amortization of debt discount and issuance costs | 2 | 4 |
Amortization of operating lease right-of-use assets | 12 | 10 |
Loss on debt conversion | 6 | 0 |
Loss on sale/disposal of property and equipment | 8 | 18 |
Deferred income taxes | 73 | 0 |
Impairment of investment | 8 | 0 |
Other | (3) | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (112) | 168 |
Inventories | (254) | (74) |
Receivables from related parties | 3 | 3 |
Prepaid expenses and other assets | 33 | (31) |
Payables to related parties | (38) | (26) |
Accounts payable | 466 | (369) |
Accrued liabilities and other | (41) | (60) |
Net cash provided by (used in) operating activities | 898 | (65) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (66) | (55) |
Purchases of short-term investments | (858) | (55) |
Proceeds from maturity of short-term investments | 200 | 37 |
Other | 2 | 0 |
Net cash used in investing activities | (722) | (73) |
Cash flows from financing activities: | ||
Proceeds from sales of common stock through employee equity plans | 2 | 3 |
Common stock repurchases for tax withholding on employee equity plans | (10) | (1) |
Net cash provided by (used in) financing activities | (8) | 2 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 168 | (136) |
Cash, cash equivalents, and restricted cash at beginning of period | 1,595 | 1,470 |
Cash, cash equivalents, and restricted cash at end of period | 1,763 | 1,334 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment, accrued but not paid | 34 | 99 |
Issuance of common stock to settle convertible debt | 24 | 0 |
Transfer of assets for acquisition of property and equipment | 34 | 13 |
Operating lease right-of-use assets acquired by assuming related liabilities | 58 | 25 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 1,763 | 1,330 |
Restricted cash included in Prepaid expenses and other current assets | 0 | 4 |
Total cash, cash equivalents, and restricted cash | $ 1,763 | $ 1,334 |
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. 28, 2019 | $ 12 | $ 9,963 | $ (53) | $ (7,095) | $ 0 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Cumulative effect of adoption of accounting standard | 0 | |||||
Common stock issued under employee equity plans | 3 | |||||
Stock-based compensation | 59 | |||||
Issuance of common stock to settle convertible debt | $ 0 | 0 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | 1 | |||||
Common stock repurchases for tax withholding on employee equity plans | 1 | (1) | ||||
Net income | 162 | 162 | ||||
Other comprehensive loss | (14) | |||||
Ending balance at Mar. 28, 2020 | 3,037 | 12 | 10,026 | (54) | (6,933) | (14) |
Beginning balance at Dec. 26, 2020 | 5,837 | 12 | 10,544 | (131) | (4,605) | 17 |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Cumulative effect of adoption of accounting standard | (8) | |||||
Common stock issued under employee equity plans | 2 | |||||
Stock-based compensation | 85 | |||||
Issuance of common stock to settle convertible debt | 24 | 24 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | 3 | |||||
Common stock repurchases for tax withholding on employee equity plans | 10 | (10) | ||||
Net income | 555 | 555 | ||||
Other comprehensive loss | (11) | |||||
Ending balance at Mar. 27, 2021 | $ 6,477 | $ 12 | $ 10,658 | $ (141) | $ (4,058) | $ 6 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 27, 2021 | |
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 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 27, 2021 shown in this report are not necessarily indicative of results to be expected for the full year ending December 25, 2021 or any other future period. 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 stockholders’ 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 26, 2020. Certain prior period amounts have been reclassified to conform to the 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 27, 2021 and March 28, 2020 each consisted of 13 weeks. 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020. Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies various aspects of accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this standard in the first quarter of 2021 using the modified retrospective adoption method through a cumulative-effect adjustment to accumulated deficit as of the beginning of the period. The adoption of this new standard resulted in the recognition of an $8 million deferred tax liability associated with book-tax differences in foreign equity method investments. Recently Issued Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This standard simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity by eliminating some of the models that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and enhances disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The standard is effective for fiscal years beginning after December 15, 2021, and can be adopted through either a modified retrospective method with a cumulative effect adjustment to opening accumulated deficit or a full retrospective method. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 27, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Financial Statement Information Short-term Investments March 27, December 26, (In millions) Commercial paper $ 1,003 $ 295 Time deposits 350 400 Total short-term investments $ 1,353 $ 695 Accounts Receivable, net As of March 27, 2021 and December 26, 2020, Accounts receivable, net included unbilled accounts receivable of $150 million and $123 million, respectively. Unbilled receivables primarily represent work completed on development services recognized as revenue but not yet invoiced to customers and 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 12 months. Inventories March 27, December 26, (In millions) Raw materials $ 89 $ 93 Work in process 1,376 1,139 Finished goods 188 167 Total inventories $ 1,653 $ 1,399 Property and Equipment, net March 27, December 26, (In millions) Leasehold improvements $ 211 $ 208 Equipment 1,265 1,209 Construction in progress 180 136 Property and equipment, gross 1,656 1,553 Accumulated depreciation (975) (912) Total property and equipment, net $ 681 $ 641 Other Non-Current Assets March 27, December 26, (In millions) Software technology and licenses, net $ 203 $ 229 Other 209 144 Total other non-current assets $ 412 $ 373 Accrued Liabilities March 27, December 26, (In millions) Accrued compensation and benefits $ 334 $ 513 Accrued marketing programs and advertising expenses 836 839 Other accrued and current liabilities 609 444 Total accrued liabilities $ 1,779 $ 1,796 Revenue Revenue allocated to remaining performance obligations that were unsatisfied (or partially unsatisfied) as of March 27, 2021 was $292 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 $159 million of revenue allocated to remaining performance obligations in the next 12 months. The revenue allocated to remaining performance obligations does not include amounts which have an original expected duration of one year or less. Revenue recognized over time associated with custom products and development services accounted for approximately 22% and 5% of the Company’s revenue for the three months ended March 27, 2021 and March 28, 2020, respectively. |
Related Parities - Equity Joint
Related Parities - Equity Joint Ventures | 3 Months Ended |
Mar. 27, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Related Parities - Equity Joint Ventures | Related Parties — Equity Joint Ventures ATMP Joint Ventures The Company holds a 15% equity interest in two joint ventures (collectively, the ATMP JV) with affiliates of Tongfu Microelectronics Co., Ltd, a Chinese joint stock 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. The ATMP JV provides assembly, testing, marking and packaging 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 purchases from the ATMP JV during the three months ended March 27, 2021 and March 28, 2020 amounted to $246 million and $151 million, respectively. As of March 27, 2021 and December 26, 2020, the amounts payable to the ATMP JV were $40 million and $78 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 27, 2021 and March 28, 2020 amounted to $10 million and $7 million, respectively. As of March 27, 2021 and December 26, 2020, the Company’s receivables from the ATMP JV were $7 million and $10 million, respectively, and were included in Receivables from related parties on the Company’s condensed consolidated balance sheets. During the three months ended March 27, 2021, the Company recorded a gain of $2 million in Equity income in investee on its condensed consolidated statements of operations. During the three months ended March 28, 2020, the Company did not record any gain or loss in Equity income in investee. As of March 27, 2021 and December 26, 2020, the carrying value of the Company’s investment in the ATMP JV was $65 million and $63 million, respectively. THATIC Joint Ventures The Company holds equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity. As of both March 27, 2021 and December 26, 2020, the carrying value of the investment was zero. In February 2016, the Company licensed certain of its intellectual property (Licensed IP) to the THATIC JV, payable over several years upon achievement of certain milestones. The Company also receives a royalty based on the sales of the THATIC JV’s products developed on the basis of such Licensed IP. The Company classifies Licensed IP and royalty income associated with the February 2016 agreement as Licensing gain within operating income. During the three months ended March 27, 2021, the Company recognized $4 million of licensing gain from royalty income under the agreement. As of both March 27, 2021 and December 26, 2020, the Company had no receivables from the THATIC JV. In June 2019, the Bureau of Industry and Security of the United States Department of Commerce 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 Revolving Facility
Debt and Revolving Facility | 3 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Revolving Facility | Debt and Revolving Credit Facility Debt The Company’s total debt as of March 27, 2021 and December 26, 2020 consisted of the following: March 27, December 26, (In millions) 7.50% Senior Notes Due 2022 (7.50% Notes) $ 312 $ 312 2.125% Convertible Senior Notes Due 2026 (2.125% Notes) 2 26 Total debt (principal amount) 314 338 Unamortized debt discount for 2.125% Notes — (7) Unamortized debt issuance costs for 7.50% Notes (1) (1) Total long-term debt (net) $ 313 $ 330 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 due 2026. The 2.125% Notes are general unsecured senior obligations of the Company. During the three months ended March 27, 2021, holders of the 2.125% Notes converted $24 million principal amount of notes, in exchange for which the Company issued approximately 3 million shares of the Company’s common stock at the conversion price of $8.00 per share. The Company recorded a loss of $6 million from these conversions in Other income (expense), net on its condensed consolidated statements of operations. As of March 27, 2021, the outstanding aggregate principal amount of the 2.125% Notes was $2 million. 7.50% Senior Notes Due 2022 On August 15, 2012, the Company issued $500 million of its 7.50% Senior Notes due 2022. As of March 27, 2021, the outstanding aggregate principal amount of the 7.50% Notes was $312 million. Revolving Credit Facility The Company is party to a $500 million unsecured revolving credit facility (the Revolving Credit Facility), including a $50 million swingline sub-facility and a $75 million sublimit for letters of credit pursuant to a credit agreement with a syndicate of banks (expiring in June 2024). Borrowings under the Revolving Credit Facility bear interest at either the LIBOR rate or the base rate at the Company’s option (in each case, as customarily defined) plus an applicable margin. As of March 27, 2021, there were no borrowings outstanding under the Revolving Credit Facility and the Company was in compliance with all required covenants. As of March 27, 2021, the Company had $13 million of letters of credit outstanding under the Revolving Credit Facility. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 27, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments Fair Value Measurements Financial Instruments Recorded at Fair Value on a Recurring Basis As of March 27, 2021 and December 26, 2020, the Company had $1.0 billion and $295 million of commercial paper, respectively, included in Short-term investments on the Company’s condensed consolidated balance sheets. The commercial paper is classified within Level 2 as its fair value estimates were based on quoted prices for comparable instruments . As of March 27, 2021 and December 26, 2020, the Company also had approximately $59 million and $46 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 non-current assets on the Company’s condensed consolidated balance sheets. These 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 both periods presented. The Company is restricted from accessing these investments. Financial Instruments Recorded at Fair Value on a Non-recurring Basis During the three months ended March 27, 2021, the Company recorded in Other income (expense), net an impairment charge of $8 million associated with an equity investment. Financial Instruments Not Recorded at Fair Value The Company carries its financial instruments at fair value except for its long-term debt. The carrying amounts and estimated fair values of the Company’s long-term debt are as follows: March 27, 2021 December 26, 2020 Carrying Estimated Carrying Estimated (In millions) Long-term debt, net $ 313 $ 361 $ 330 $ 642 The estimated fair values of the Company’s long-term debt are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets. The estimated fair value of the 2.125% Notes takes into account the current value of the Company’s stock price compared to the initial conversion price of approximately $8.00 per share of common stock. The fair value of the Company’s time deposits, accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing 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 enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate risk related to future forecasted transactions denominated in currencies other than the U.S. Dollar. These contracts generally mature within 18 months and are designated as accounting hedges. As of March 27, 2021 and December 26, 2020, the notional value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges was $811 million and $501 million, respectively. The fair value of these contracts was not material as of March 27, 2021 and December 26, 2020. 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 the U.S. Dollar. These forward contracts generally mature within 3 months and are not designated as accounting hedges. As of March 27, 2021 and December 26, 2020, the notional values of these outstanding contracts were $443 million and $254 million, respectively. The fair value of these contracts was not material as of March 27, 2021 and December 26, 2020. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 27, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The table below summarizes the changes in accumulated other comprehensive Income (loss): Three Months Ended March 27, March 28, Gains (losses) on cash flow hedges: (In millions) Beginning balance $ 17 $ — Net unrealized losses arising during the period — (17) Net losses (gains) reclassified into income during the period (10) 3 Tax effect (1) — Total other comprehensive income (loss) (11) (14) Ending balance $ 6 $ (14) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 27, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the components of basic and diluted earnings per share: Three Months Ended March 27, March 28, (In millions, except per share amounts) Numerator Net income for basic earnings per share $ 555 $ 162 Effect of potentially dilutive shares: Interest expense related to the 2.125% Notes — 4 Net income for diluted earnings per share $ 555 $ 166 Denominator Basic weighted average shares 1,213 1,170 Effect of potentially dilutive shares: Employee equity plans and warrants 18 23 2.125% Notes — 31 Diluted weighted average shares 1,231 1,224 Earnings per share: Basic $ 0.46 $ 0.14 Diluted $ 0.45 $ 0.14 |
Common Stock and Employee Equit
Common Stock and Employee Equity Plans | 3 Months Ended |
Mar. 27, 2021 | |
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 27, March 28, (In millions) Balance, beginning of period 1,211 1,170 Common stock issued under employee equity plans 1 1 Issuance of common stock to settle convertible debt 3 — Balance, end of period 1,215 1,171 Stock-based compensation expense was as follows: Three Months Ended March 27, March 28, (In millions) Cost of sales $ 1 $ 2 Research and development 55 37 Marketing, general and administrative 29 20 Total stock-based compensation expense before income taxes 85 59 Income tax benefit (13) — Total stock-based compensation expense after income taxes $ 72 $ 59 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded an income tax provision of $89 million and $6 million for the three months ended March 27, 2021 and March 28, 2020, respectively, representing effective tax rates of 13.8% and 3.3%, respectively. The increase in income tax expense and effective tax rate was due to significantly higher income in the United States in the current period, partially offset by the foreign derived intangible income benefit, research and development tax credits, and excess tax benefit for stock-based compensation. The lower income tax expense and effective tax rate for the prior year period was due to a full valuation allowance in the United States during 2020, a significant portion of which was released by the Company in the fourth quarter of 2020. The Company’s effective tax rate for the three months ended March 27, 2021 and March 28, 2020 was lower than the United States federal statutory rate primarily due to the tax benefits recognized for the three months ended March 27, 2021 discussed above, and due to the maintenance of a full valuation allowance during the three months ended March 28, 2020. As of March 27, 2021, the Company continues to maintain a valuation allowance for certain federal, state, and foreign tax attributes. The federal valuation allowance maintained is due to limitations under Internal Revenue Code Section 382 or 383, separate return loss year rules, or dual consolidated loss rules. The state and foreign valuation allowance maintained is due to a lack of sufficient sources of taxable income. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 27, 2021 | |
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 microprocessors, accelerated processing units that integrate microprocessors and graphics, chipsets, discrete graphics processing units (GPUs), data center and professional GPUs and development services. From time to time, the Company may also sell or license portions of its IP portfolio. • 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. From time to time, the Company may also sell or license 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 employee stock-based compensation expense and acquisition-related costs. The following table provides a summary of net revenue and operating income by segment: Three Months Ended March 27, March 28, (In millions) Net revenue: Computing and Graphics $ 2,100 $ 1,438 Enterprise, Embedded and Semi-Custom 1,345 348 Total net revenue $ 3,445 $ 1,786 Operating income (loss): Computing and Graphics $ 485 $ 262 Enterprise, Embedded and Semi-Custom 277 (26) All Other (1) (100) (59) Total operating income $ 662 $ 177 (1) For the three months ended March 27, 2021, all other operating losses included $85 million of stock-based compensation expense and $15 million of acquisition-related costs. For the three months ended March 28, 2020, all other operating losses were related to stock-based compensation expense. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 27, 2021 | |
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 32 nm 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 32 nm 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 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 California Court of Appeal affirmed this decision on August 27, 2020 and issued its remittitur on September 9, 2020, which foreclosed further appeals in the state court litigation. On October 4, 2018, the district court issued an order dismissing the Hamilton and Ha amended complaints and both plaintiffs appealed. On March 16, 2020, the Ninth Circuit affirmed the district court’s dismissal of the Ha complaint and the time to seek further appeals has since expired. On the same day, the Ninth Circuit also reversed and remanded the district court’s dismissal of the Hamilton complaint for further consideration of defendants’ motion to dismiss. Following supplemental briefing, the district court entered an order on April 5, 2021 dismissing with prejudice all claims in the Hamilton action as precluded by the decision in the Wessels case. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Quarterhill Inc. Litigation On July 2, 2018, three entities named Aquila Innovations, Inc. (Aquila), Collabo Innovations, Inc. (Collabo), and Polaris Innovations, Ltd. (Polaris), filed separate patent infringement complaints against the Company in the United States District Court for the Western District of Texas. Aquila alleges that the Company infringes two patents (6,239,614 and 6,895,519) relating to power management; Collabo alleges that the Company infringes one patent (7,930,575) related to power management; and Polaris alleges that the Company infringes two patents (6,728,144 and 8,117,526) relating to control or use of dynamic random-access memory, or DRAM. Each of the three complaints seeks unspecified monetary damages, interest, fees, expenses, and costs against the Company; Aquila and Collabo also seek enhanced damages. Aquila, Collabo, and Polaris each appear to be related to a patent assertion entity named Quarterhill Inc. (formerly WiLAN Inc.). On November 16, 2018, AMD filed answers in the Collabo and Aquila cases and filed a motion to dismiss in the Polaris case. On January 25, 2019, the Company filed amended answers and counterclaims in the Collabo and Aquila cases. On July 22, 2019, the Company’s motion to dismiss in the Polaris case was denied. On August 23, 2019, the Court held a claim construction hearing in each case. On May 14, 2020, at the request of Polaris, the Court dismissed all claims related to one of the two patents in suite in the Polaris case. On June 10, 2020, the Court granted AMD’s motions to stay the Polaris and Aquila cases pending the completion of inter partes review of each of the patents-in-suit in those cases by the Patent Trial and Appeal Board. On February 22, 2021, February 26, 2021, and March 10, 2021, the Patent Trial and Appeal Board issued final written decisions in inter partes reviews invalidating all asserted claims of the remaining Polaris and Aquila patents. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. City of Pontiac Police and Fire Retirement System Litigation On September 29, 2020, the City of Pontiac Police and Fire Retirement System, an AMD shareholder, filed a shareholder derivative complaint (the “Complaint”) against AMD and the members of its Board of Directors (collectively, “Defendants”) in the United States District Court for the Northern District of California. See City of Pontiac Police and Fire Retirement System v. Caldwell, et al., No. 5:20-cv-6794 (N.D. Cal.). The Complaint alleges that Defendants breached their fiduciary duties, violated Section 14(a) of the Exchange Act of 1934, and were unjustly enriched by misrepresenting the Company’s commitment to diversity, particularly with respect to the composition of the membership of AMD’s Board of Directors and senior leadership team. On December 18, 2020, Defendants filed a motion to dismiss the Complaint. On February 12, 2021, Plaintiff filed an opposition to Defendants’ motion to dismiss, and on March 12, 2021, Defendants filed a reply brief in support of the motion to dismiss. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Xilinx Acquisition Litigation On October 26, 2020, the Company, its wholly-owned subsidiary, Thrones Merger Sub, Inc., and Xilinx, Inc. (“Xilinx”) entered a definitive agreement (the “Merger Agreement”) in which the Company will acquire Xilinx by merging Thrones Merger Sub, Inc. with and into Xilinx, with Xilinx continuing as the surviving corporation and becoming a wholly-owned subsidiary of the Company (the “Proposed Transaction”). See Note 13 of Notes to Condensed Consolidated Financial Statements for additional information. On December 3, 2020, the Company and Xilinx filed a Registration Statement on Form S-4 (together with the joint proxy statement and prospectus contained therein, the “Registration Statement”) describing the Proposed Transaction and other related matters. On December 11, 2020, a Xilinx shareholder filed a putative class action in the New York State Supreme Court, New York County, regarding the Proposed Transaction. Nunez v. Xilinx , Case No. 656971/2020 (N.Y. Sup. Ct.) (“Nunez”). The lawsuit alleges that the Board of Directors of Xilinx breached their fiduciary duties to Xilinx shareholders in connection with the Proposed Transaction by allegedly failing to obtain fair, adequate and maximum consideration for Xilinx shareholders in connection with the Proposed Transaction and by not disclosing certain material information about the Proposed Transaction in the Registration Statement. The lawsuit asserts a single claim against the Company, alleging that it aided and abetted the Xilinx directors’ breach of their fiduciary duties. The lawsuit seeks to enjoin or rescind any transaction with Xilinx as well as certain other equitable relief, unspecified damages and attorneys’ fees and costs. On December 15, 2020, a Xilinx shareholder filed a lawsuit in the United States District Court for the Southern District of New York, regarding the Proposed Transaction. Shumacher v. Xilinx , Case No. 1:20-cv-10595 (S.D.N.Y.) (“Shumacher”). The lawsuit alleges that Xilinx and its Board of Directors disseminated a false and misleading Registration Statement that omitted material information regarding the Proposed Transaction, thereby violating Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The lawsuit also asserts a single claim against the Company, alleging that it acted as a controlling person of Xilinx within the meaning of Section 20(a) of the Exchange Act by virtue of its supervisory control over the composition of the Registration Statement. The lawsuit seeks to enjoin or rescind any transaction with Xilinx as well as certain other equitable relief, unspecified damages and attorneys’ fees and costs. On December 23, 2020, a shareholder of the Company filed a lawsuit in the United States District Court of the Southern District of New York regarding the Proposed Transaction. Vazirani v. Advanced Micro Devices, Case No. 1:20-cv-10894 (S.D.N.Y) (“Vazirani”). The lawsuit alleges that the Company and its Board of Directors disseminated a false and misleading Registration Statement that omitted material information regarding the Proposed Transaction, thereby violating Sections 14(a) and 20(a) of the Exchange Act. The lawsuit seeks to enjoin or rescind any transaction with Xilinx as well as certain other equitable relief, unspecified damages and attorneys’ fees and costs. On March 22, 2021, the Nunez complaint was voluntarily dismissed, and on March 25, 2021, the Vazirani complaint was voluntarily dismissed. The Shumacher complaint was voluntarily dismissed on April 9, 2021. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Future Link Systems Litigation On December 21, 2020, Future Link Systems, LLC filed a patent infringement complaint against the Company in the United States District Court for the Western District of Texas. Future Link Systems alleges that the Company infringes three U.S. patents: 7,983,888 (related to simulated PCI express circuitry); 6,363,466 (related to out of order data transactions); and 6,622,108 (related to interconnect testing). Future Link Systems seeks unspecified monetary damages, enhanced damages, interest, fees, expenses, costs, and injunctive relief against the Company. On March 22, 2021, the Company filed its answer to Future Link Systems’ complaint and also filed counterclaims based on Future Link Systems’ breach of the parties’ pre-suit non-disclosure agreement. Based upon information presently known to management, the Company believes that the potential liability, if any, 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. |
Pending Acquisition
Pending Acquisition | 3 Months Ended |
Mar. 27, 2021 | |
Business Combinations [Abstract] | |
Pending Acquisition | Pending AcquisitionOn October 26, 2020, the Company entered into an Agreement and Plan of Merger (the Merger Agreement), with Thrones Merger Sub, Inc., a wholly-owned subsidiary of the Company (Merger sub), and Xilinx, Inc. (Xilinx), whereby Merger Sub will merge with and into Xilinx (the Merger), with Xilinx surviving such Merger as a wholly-owned subsidiary of the Company. Under the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of common stock of Xilinx (Xilinx Common Stock) issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of Xilinx Common Stock held directly by the Company or Merger Sub) will be converted into the right to receive 1.7234 fully paid and non-assessable shares of common stock of the Company and, if applicable, cash in lieu of fractional shares, subject to any applicable withholding. As of the signing of the Merger Agreement, the transaction was valued at $35 billion. The actual valuation of the transaction could differ significantly from the estimated amount due to movements in the price of the Company’s common stock, the number of shares of Xilinx common stock outstanding on the closing date of the Merger and other factors. Under the Merger Agreement, the Company will be required to pay a termination fee to Xilinx equal to $1.5 billion if the Merger Agreement is terminated in certain circumstances, including if the Merger Agreement is terminated because the Company’s board of directors has changed its recommendation. The Company will be required to pay a termination fee equal to $1 billion if the Merger Agreement is terminated in certain circumstances related to the failure to obtain required regulatory approvals prior to October 26, 2021 (subject to automatic extension first to January 26, 2022 and then to April 26, 2022, in each case, to the extent the regulatory closing conditions remain outstanding). On April 7, 2021, the Company’s and Xilinx’s stockholders voted to approve their respective proposals relating to the pending acquisition of Xilinx by the Company. The closing of the Merger is subject to customary conditions, including regulatory approval, and is currently expected to occur by the end of calendar year 2021. |
The Company
The Company | 3 Months Ended |
Mar. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The CompanyAdvanced Micro Devices, Inc. is a global semiconductor company. References herein to AMD or the Company mean Advanced Micro Devices, Inc. and its consolidated subsidiaries. AMD’s products include x86 microprocessors (CPUs), accelerated processing units which integrate microprocessors and graphics (APUs), discrete graphics processing units (GPUs), semi-custom System-on-Chip (SOC) products and chipsets for the PC, gaming, datacenter and embedded markets. In addition, AMD provides development services and sells or licenses portions of its intellectual property portfolio. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of 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 27, 2021 shown in this report are not necessarily indicative of results to be expected for the full year ending December 25, 2021 or any other future period. 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 stockholders’ 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 26, 2020. Certain prior period amounts have been reclassified to conform to the 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 27, 2021 and March 28, 2020 each consisted of 13 weeks |
Significant Accounting Policies, Recently Adopted Accounting Standards and Recently Issued Accounting Standards | 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020. Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies various aspects of accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this standard in the first quarter of 2021 using the modified retrospective adoption method through a cumulative-effect adjustment to accumulated deficit as of the beginning of the period. The adoption of this new standard resulted in the recognition of an $8 million deferred tax liability associated with book-tax differences in foreign equity method investments. Recently Issued Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This standard simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity by eliminating some of the models that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and enhances disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The standard is effective for fiscal years beginning after December 15, 2021, and can be adopted through either a modified retrospective method with a cumulative effect adjustment to opening accumulated deficit or a full retrospective method. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Short-term Investments | March 27, December 26, (In millions) Commercial paper $ 1,003 $ 295 Time deposits 350 400 Total short-term investments $ 1,353 $ 695 |
Inventories | Inventories March 27, December 26, (In millions) Raw materials $ 89 $ 93 Work in process 1,376 1,139 Finished goods 188 167 Total inventories $ 1,653 $ 1,399 |
Property and Equipment, Net | Property and Equipment, net March 27, December 26, (In millions) Leasehold improvements $ 211 $ 208 Equipment 1,265 1,209 Construction in progress 180 136 Property and equipment, gross 1,656 1,553 Accumulated depreciation (975) (912) Total property and equipment, net $ 681 $ 641 |
Other Non-Current Assets | Other Non-Current Assets March 27, December 26, (In millions) Software technology and licenses, net $ 203 $ 229 Other 209 144 Total other non-current assets $ 412 $ 373 |
Accrued Liabilities | Accrued Liabilities March 27, December 26, (In millions) Accrued compensation and benefits $ 334 $ 513 Accrued marketing programs and advertising expenses 836 839 Other accrued and current liabilities 609 444 Total accrued liabilities $ 1,779 $ 1,796 |
Debt and Revolving Facility (Ta
Debt and Revolving Facility (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s total debt as of March 27, 2021 and December 26, 2020 consisted of the following: March 27, December 26, (In millions) 7.50% Senior Notes Due 2022 (7.50% Notes) $ 312 $ 312 2.125% Convertible Senior Notes Due 2026 (2.125% Notes) 2 26 Total debt (principal amount) 314 338 Unamortized debt discount for 2.125% Notes — (7) Unamortized debt issuance costs for 7.50% Notes (1) (1) Total long-term debt (net) $ 313 $ 330 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments Not Recorded at Fair Value | The Company carries its financial instruments at fair value except for its long-term debt. The carrying amounts and estimated fair values of the Company’s long-term debt are as follows: March 27, 2021 December 26, 2020 Carrying Estimated Carrying Estimated (In millions) Long-term debt, net $ 313 $ 361 $ 330 $ 642 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes the changes in accumulated other comprehensive Income (loss): Three Months Ended March 27, March 28, Gains (losses) on cash flow hedges: (In millions) Beginning balance $ 17 $ — Net unrealized losses arising during the period — (17) Net losses (gains) reclassified into income during the period (10) 3 Tax effect (1) — Total other comprehensive income (loss) (11) (14) Ending balance $ 6 $ (14) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
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 27, March 28, (In millions, except per share amounts) Numerator Net income for basic earnings per share $ 555 $ 162 Effect of potentially dilutive shares: Interest expense related to the 2.125% Notes — 4 Net income for diluted earnings per share $ 555 $ 166 Denominator Basic weighted average shares 1,213 1,170 Effect of potentially dilutive shares: Employee equity plans and warrants 18 23 2.125% Notes — 31 Diluted weighted average shares 1,231 1,224 Earnings per share: Basic $ 0.46 $ 0.14 Diluted $ 0.45 $ 0.14 |
Common Stock and Employee Equ_2
Common Stock and Employee Equity Plans (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Equity [Abstract] | |
Schedule of Common Shares Outstanding | Shares of common stock outstanding were as follows: Three Months Ended March 27, March 28, (In millions) Balance, beginning of period 1,211 1,170 Common stock issued under employee equity plans 1 1 Issuance of common stock to settle convertible debt 3 — Balance, end of period 1,215 1,171 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense was as follows: Three Months Ended March 27, March 28, (In millions) Cost of sales $ 1 $ 2 Research and development 55 37 Marketing, general and administrative 29 20 Total stock-based compensation expense before income taxes 85 59 Income tax benefit (13) — Total stock-based compensation expense after income taxes $ 72 $ 59 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
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 27, March 28, (In millions) Net revenue: Computing and Graphics $ 2,100 $ 1,438 Enterprise, Embedded and Semi-Custom 1,345 348 Total net revenue $ 3,445 $ 1,786 Operating income (loss): Computing and Graphics $ 485 $ 262 Enterprise, Embedded and Semi-Custom 277 (26) All Other (1) (100) (59) Total operating income $ 662 $ 177 (1) For the three months ended March 27, 2021, all other operating losses included $85 million of stock-based compensation expense and $15 million of acquisition-related costs. For the three months ended March 28, 2020, all other operating losses were related to stock-based compensation expense. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) $ in Millions | Mar. 27, 2021USD ($) |
Cumulative Effect, Period of Adoption, Adjustment | |
Disaggregation of Revenue [Line Items] | |
Deferred tax liabiilty | $ 8 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Cash and Cash Equivalents [Line Items] | ||
Short-term investments | $ 1,353 | $ 695 |
Accounts Receivable, Net | ||
Unbilled contracts receivable | 150 | 123 |
Inventories | ||
Raw materials | 89 | 93 |
Work in process | 1,376 | 1,139 |
Finished goods | 188 | 167 |
Inventories, Total | 1,653 | 1,399 |
Property and Equipment, Net | ||
Leasehold improvements | 211 | 208 |
Equipment | 1,265 | 1,209 |
Construction in progress | 180 | 136 |
Property and equipment, gross | 1,656 | 1,553 |
Accumulated depreciation | (975) | (912) |
Total property and equipment, net | 681 | 641 |
Other Assets | ||
Software technology and licenses, net | 203 | 229 |
Other | 209 | 144 |
Total other non-current assets | 412 | 373 |
Accrued Liabilities | ||
Accrued compensation and benefits | 334 | 513 |
Accrued marketing programs and advertising expenses | 836 | 839 |
Other accrued and current liabilities | 609 | 444 |
Total accrued liabilities | 1,779 | 1,796 |
Commercial paper | ||
Cash and Cash Equivalents [Line Items] | ||
Short-term investments | 1,003 | 295 |
Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Short-term investments | $ 350 | $ 400 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Balance Sheet Related Disclosures [Abstract] | ||
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 292 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 292 | |
Transferred over Time | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percentage of Revenue to Total Revenue | 22.00% | 5.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-28 | ||
Balance Sheet Related Disclosures [Abstract] | ||
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 159 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations expected to be satisfied, expected timing | 12 months | |
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 159 |
Related Parities - Equity Joi_2
Related Parities - Equity Joint Ventures (Details) $ in Millions | 3 Months Ended | ||
Mar. 27, 2021USD ($)joint_venture | Mar. 28, 2020USD ($) | Dec. 26, 2020USD ($) | |
Investment Holdings [Line Items] | |||
Payables to related parties | $ 40 | $ 78 | |
Receivables from related parties | 7 | 10 | |
Equity income in investee | 2 | $ 0 | |
Carrying value of investment | 65 | 63 | |
Estimated license fees expected to be earned over several years pursuant to a licensing agreement | $ 4 | ||
Joint Venture | ATMP JV | |||
Investment Holdings [Line Items] | |||
Ownership percentage | 15.00% | ||
Number of joint ventures | joint_venture | 2 | ||
Purchases from related party | $ 246 | 151 | |
Payables to related parties | 40 | 78 | |
Resale to ATMP JV | 10 | $ 7 | |
Receivables from related parties | 7 | 10 | |
Equity income in investee | 2 | ||
Carrying value of investment | $ 65 | 63 | |
Joint Venture | THATIC JV | |||
Investment Holdings [Line Items] | |||
Number of joint ventures | joint_venture | 2 | ||
Receivables from related parties | $ 0 | ||
Carrying value of investment | $ 0 | $ 0 |
Debt and Revolving Facility - S
Debt and Revolving Facility - Schedule of Debt (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 | Sep. 30, 2016 | Aug. 15, 2012 |
Debt Instrument [Line Items] | ||||
Total debt (principal amount) | $ 314 | $ 338 | ||
Long-term debt, net | $ 313 | 330 | ||
2.125% Convertible Senior Notes due 2026 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 2.125% | 2.125% | ||
Total debt (principal amount) | $ 2 | 26 | ||
Unamortized debt discount | $ 0 | (7) | ||
7.50% Senior Notes due 2022 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 7.50% | 7.50% | ||
Total debt (principal amount) | $ 312 | 312 | ||
Unamortized debt issuance costs | $ (1) | $ (1) |
Debt and Revolving Facility - N
Debt and Revolving Facility - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | |||||
Mar. 27, 2021 | Mar. 28, 2020 | Dec. 26, 2020 | Jun. 07, 2019 | Sep. 30, 2016 | Aug. 15, 2012 | |
Debt Instrument [Line Items] | ||||||
Gain (Loss) on Extinguishment of Debt | $ 6,000,000 | $ 0 | ||||
Total debt (principal amount) | $ 314,000,000 | $ 338,000,000 | ||||
2.125% Convertible Senior Notes due 2026 | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 2.125% | 2.125% | ||||
Principal amount | $ 2,000,000 | $ 805,000,000 | ||||
Principal amount of notes converted | $ 24,000,000 | |||||
Issuance of common stock to settle convertible debt (in shares) | 3,000 | |||||
Conversion price (in usd per share) | $ 8 | |||||
Total debt (principal amount) | $ 2,000,000 | 26,000,000 | ||||
7.50% Senior Notes due 2022 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 7.50% | 7.50% | ||||
Principal amount | $ 500,000,000 | |||||
Total debt (principal amount) | $ 312,000,000 | $ 312,000,000 | ||||
Revolving Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Letters of credit outstanding, amount | $ 13,000,000 | |||||
Revolving Credit Facility | Swingline Subfacility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 50,000,000 | |||||
Revolving Credit Facility | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Dec. 26, 2020 | |
Other Fair Value Disclosure [Line Items] | |||
Short-term investments | $ 1,353 | $ 695 | |
Impairment of investment | 8 | $ 0 | |
Commercial paper | |||
Other Fair Value Disclosure [Line Items] | |||
Short-term investments | 1,003 | 295 | |
Commercial paper | Level 2 | |||
Other Fair Value Disclosure [Line Items] | |||
Short-term investments | 1,000 | 295 | |
Mutual Fund | Level 1 | |||
Other Fair Value Disclosure [Line Items] | |||
Other assets | $ 59 | $ 46 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, net | $ 313 | $ 330 |
Estimated Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, net | $ 361 | $ 642 |
Financial Instruments - Cash, C
Financial Instruments - Cash, Cash Equivalents, and Marketable Securities Fair Value Measurements (Details) - Foreign Exchange Contract - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Dec. 26, 2020 | |
Cash Flow Hedging | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, term of contract | 18 months | |
Derivative, notional amount | $ 811 | $ 501 |
Contracts not designated as hedging instruments: | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, term of contract | 3 months | |
Derivative, notional amount | $ 443 | $ 254 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 5,837 | |
Ending balance | 6,477 | $ 3,037 |
AOCI Attributable to Parent | ||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | 17 | 0 |
Other comprehensive loss | (11) | (14) |
Ending balance | 6 | (14) |
Net unrealized losses arising during the period | ||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Net unrealized losses arising during the period | 0 | (17) |
Net losses (gains) reclassified into income during the period | (10) | 3 |
Tax effect | (1) | 0 |
Other comprehensive loss | $ (11) | $ (14) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Numerator | ||
Net income for basic earnings per share | $ 555 | $ 162 |
Effect of potentially dilutive shares: | ||
Interest expense related to the 2.125% Notes | 0 | 4 |
Net income for diluted earnings per share | $ 555 | $ 166 |
Denominator | ||
Basic weighted-average shares (in shares) | 1,213 | 1,170 |
Effect of potentially dilutive shares: | ||
Employee equity plans and warrants (in shares) | 18 | 23 |
2.125% Notes (in shares) | 0 | 31 |
Diluted weighted-average shares (in shares) | 1,231 | 1,224 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Basic (in usd per share) | $ 0.46 | $ 0.14 |
Diluted (in usd per share) | $ 0.45 | $ 0.14 |
Common Stock and Employee Equ_3
Common Stock and Employee Equity Plans - Common Stock Activity (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of period (in shares) | 1,217,000 | |
Balance, end of period (in shares) | 1,221,000 | |
Common stock | ||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance, beginning of period (in shares) | 1,211,000 | 1,170,000 |
Common stock issued under employee equity plans (in shares) | 1,000 | 1,000 |
Issuance of common stock to settle convertible debt (in shares) | 3,000 | 0 |
Balance, end of period (in shares) | 1,215,000 | 1,171,000 |
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. 27, 2021 | Mar. 28, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 85 | $ 59 |
Income tax benefit | (13) | 0 |
Total stock-based compensation expense after income taxes | 72 | 59 |
Cost of sales | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1 | 2 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 55 | 37 |
Marketing, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 29 | $ 20 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 89 | $ 6 |
Effective tax rate | 13.80% | 3.30% |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | |
Mar. 27, 2021USD ($)segment | Mar. 28, 2020USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total net revenue | $ 3,445 | $ 1,786 |
Total operating income (loss) | 662 | 177 |
Share-based compensation expense | 85 | 59 |
All Other | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | (100) | (59) |
Share-based compensation expense | 85 | 15 |
Computing and Graphics | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 2,100 | 1,438 |
Computing and Graphics | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | 485 | 262 |
Enterprise, Embedded and Semi-Custom | ||
Segment Reporting Information [Line Items] | ||
Total net revenue | 1,345 | 348 |
Enterprise, Embedded and Semi-Custom | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total operating income (loss) | $ 277 | $ (26) |
Pending Acquisition (Details)
Pending Acquisition (Details) $ in Millions | Oct. 26, 2020USD ($)shares |
Business Acquisition, Contingent Consideration [Line Items] | |
Termination fee to be paid, failure to obtain regulatory approval | $ 1,000 |
Xilinx, Inc. | |
Business Acquisition, Contingent Consideration [Line Items] | |
Business acquisition, conversion ratio | shares | 1.7234 |
Transaction value | $ 35,000 |
Date of acquisition agreement | Oct. 26, 2020 |
Termination fee to be paid, change in recommendation | $ 1,500 |