Exhibit 99.1
AMD News Release
| | | | |
| EDITORIAL CONTACT: | | INVESTOR CONTACT: | | |
| Drew Prairie | | Ruth Cotter | | |
| (512) 602-4425 | | (408) 749-3887 | | |
| drew.prairie@amd.com | | ruth.cotter@amd.com | | |
AMD Reports Third Quarter Results
SUNNYVALE, Calif. — Oct. 15, 2009 — AMD1 (NYSE:AMD) today reported revenue for the third quarter of 2009 of $1.396 billion. Third quarter 2009 revenue increased 18 percent compared to the second quarter of 2009 and decreased 22 percent compared to the third quarter of 2008.
In the third quarter of 2009, AMD reported a net loss attributable to AMD common stockholders of $128 million, or $0.18 per share, which includes a net favorable impact of $54 million, or $0.08 per share, primarily from a $66 million gain from the repurchase of debt as described in the table below2. AMD’s operating loss was $77 million.
In the second quarter of 2009, AMD had revenue of $1.184 billion, a net loss attributable to AMD common stockholders of $330 million and an operating loss of $249 million. In the third quarter of 2008, AMD had revenue from continuing operations of $1.797 billion, a net loss attributable to AMD common stockholders of $134 million and an operating income of $122 million.
In the third quarter of 2009, AMD Product Company reported non-GAAP net income of $2 million and non-GAAP operating income of $47 million. In the second quarter of 2009, AMD Product Company reported a non-GAAP net loss of $244 million and a non-GAAP operating loss of $205 million3.
2
“Strong demand for our product and platform offerings combined with disciplined execution resulted in AMD Product Company achieving profitability in the third quarter,” said Dirk Meyer, AMD president and CEO. “Growth in microprocessor and graphics unit shipments drove an 18 percent sequential revenue increase, while improved factory utilization rates, higher microprocessor average selling price and an increase in 45nm product shipments resulted in a gross margin improvement from the prior quarter.”
Third quarter 2009 AMD gross margin was 42 percent compared to 37 percent in the prior quarter. Third quarter 2009 AMD Product Company non-GAAP gross margin was 38 percent compared to 27 percent in the prior quarter.
Current Outlook
AMD’s outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions and the factors set forth under the “Cautionary Statement” below.
AMD expects its Product Company revenue to be up modestly for the fourth quarter of 2009.
Additional Highlights
| | • | | AMD introduced theATI Radeon HD 5000 family of graphics processors, the industry’s only graphics chips that support the Direct X11 technology featured in Microsoft’s upcoming Windows 7 operating system. The flagshipATI Radeon™ HD 5870 captured the graphics performance title and has won more than 50 industry awards to date. The new ATI Radeon HD 5000 family of graphics cards also includesATI Eyefinity multi-display technology, allowing a single graphics card to drive up to six monitors. |
| | • | | AMD delivered several new computing platforms in the quarter. |
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| | • | | For the notebook market, global computer manufacturers including HP, Acer, Toshiba, Asus and MSI announced plans to introduce more than 70 notebooks based on AMD’s latestmainstream andultrathin platforms. |
| | • | | For the server market, AMD began shipping server platforms with the introduction of three new AMDserver chipsets. |
| | • | | For the commercial client market, HP began selling theCompaq 6005Pro Business PC based on the newAMD Business Class Desktop Platform. |
| | • | | For the embedded market, AMD announced dual- and quad-core platforms for client and high-end commercialembedded solutions. |
| | • | | AMD launchedVISION Technology from AMD, a differentiated approach to retail merchandising designed to reinforce the value proposition of AMD platforms and simplify the consumer buying experience by highlighting what can be done with a PC rather than what is inside the PC. |
| | • | | AMD launched theAMD Fusion Partner Program, a business acceleration program designed to help AMD channel partners gain sales traction and speed the delivery of AMD platforms. |
| | • | | AMD joined with GLOBALFOUNDRIES to break ground onFab 2 in New York,GLOBALFOUNDRIES’ state-of-the-art semiconductor manufacturing facility that AMD expects will provide additional leading-edge manufacturing capacity when the facility enters production, scheduled for 2012. |
AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its third quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its Web site atwww.amd.com. The webcast will be available for 10 days after the conference call.
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Reconciliation of GAAP Net Income (Loss) Attributable to AMD Common Stockholders to AMD Product Company
Non-GAAP Net Income (Loss) 1,2,3,4
| | | | | | | | | | | | | | | | | | | | | | | | |
(Millions except per share amounts) | | Q3-09 | | | Q2-09 | | | Q3-08 | |
GAAP net income (loss) attributable to AMD common stockholders / EPS | | $ | (128 | ) | | $ | (0.18 | ) | | $ | (330 | ) | | $ | (0.49 | ) | | $ | (134 | ) | | $ | (0.22 | ) |
Loss from discontinued operations | | | — | | | | — | | | | — | | | | — | | | | (150 | ) | | | (0.25 | ) |
Income (loss) attributable to AMD stockholders from continuing operations | | $ | (128 | ) | | $ | (0.18 | ) | | $ | (330 | ) | | $ | (0.49 | ) | | $ | 16 | | | $ | 0.03 | |
Process technology license revenue | | | — | | | | — | | | | — | | | | — | | | | 191 | | | | 0.31 | |
Gross margin benefit from sales of inventory written down in Q4-08 | | | 9 | | | | 0.01 | | | | 98 | | | | 0.15 | | | | — | | | | — | |
Amortization of acquired intangibles | | | (17 | ) | | | (0.02 | ) | | | (17 | ) | | | (0.03 | ) | | | (30 | ) | | | (0.05 | ) |
ATI impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | — | | | | — | | | | (2 | ) | | | — | |
Restructuring charges | | | (4 | ) | | | (0.01 | ) | | | (1 | ) | | | — | | | | (9 | ) | | | (0.01 | ) |
Investment net charges | | | — | | | | — | | | | — | | | | — | | | | (9 | ) | | | (0.01 | ) |
Gain on debt buyback | | | 66 | | | | 0.10 | | | | 6 | | | | 0.01 | | | | — | | | | — | |
Net favorable (unfavorable) impact subtotal | | $ | 54 | | | $ | 0.08 | | | $ | 86 | | | $ | 0.13 | | | $ | 141 | | | $ | 0.23 | |
| | | | | | |
Non-GAAP net income (loss) attributable to AMD common stockholders | | $ | (182 | ) | | | | | | $ | (416 | ) | | | | | | $ | (125 | ) | | | — | |
Net income (loss) from Foundry segment and intersegment eliminations | | | (191 | ) | | | (0.28 | ) | | | (177 | ) | | | (0.27 | ) | | | — | | | | — | |
Net (income) loss attributable to noncontrolling interest | | | 29 | | | | 0.04 | | | | 25 | | | | 0.04 | | | | — | | | | — | |
Class B preferred accretion | | | (22 | ) | | | (0.03 | ) | | | (20 | ) | | | (0.03 | ) | | | — | | | | — | |
AMD Product Company non-GAAP net income (loss) | | $ | 2 | | | | | | | $ | (244 | ) | | | — | | | | — | | | | — | |
Reconciliation of GAAP to AMD Product Company Non-GAAP Operating Income (Loss) 1,2,3,4
| | | | | | | | | | | | |
(Millions) | | Q3-09 | | | Q2-09 | | | Q3-08 | |
GAAP operating income (loss) | | $ | (77 | ) | | $ | (249 | ) | | $ | 122 | |
Process technology license revenue | | | — | | | | — | | | | 191 | |
Gross margin benefit from sales of inventory written down in Q4-08 | | | 9 | | | | 98 | | | | — | |
Amortization of acquired intangibles | | | (17 | ) | | | (17 | ) | | | (30 | ) |
ATI impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | (2 | ) |
Restructuring charges | | | (4 | ) | | | (1 | ) | | | (9 | ) |
Non-GAAP operating income (loss) | | $ | (65 | ) | | $ | (329 | ) | | $ | (28 | ) |
Operating income (loss) from Foundry segment and intersegment eliminations | | | (112 | ) | | | (124 | ) | | | — | |
AMD Product Company non-GAAP operating income (loss) | | $ | 47 | | | $ | (205 | ) | | | — | |
Reconciliation of GAAP to AMD Product Company Non-GAAP Gross Margin1,2,3,4
| | | | | | | | | | | | |
(Millions, except percentages) | | Q3-09 | | | Q2-09 | | | Q3-08 | |
GAAP Gross Margin | | $ | 585 | | | $ | 441 | | | $ | 916 | |
GAAP Gross Margin % | | | 42 | % | | | 37 | % | | | 51 | % |
Process technology license revenue | | | — | | | | — | | | | 191 | |
Gross margin benefit from sales of inventory written down in Q4-08 | | | 9 | | | | 98 | | | | — | |
Non-GAAP Gross Margin | | $ | 576 | | | $ | 343 | | | $ | 725 | |
Non-GAAP Gross Margin % | | | 41 | % | | | 29 | % | | | 45 | % |
Gross margin from Foundry segment and intersegment eliminations | | | 49 | | | | 20 | | | | — | |
AMD Product Company non-GAAP Gross Margin | | $ | 527 | | | $ | 323 | | | | — | |
AMD Product Company non-GAAP Gross Margin % | | | 38 | % | | | 27 | % | | | — | |
Select Segment Information 4
| | | | | | | | | |
(Millions, except percentages) | | Q3-09 | | vs Q2-09 | | | vs Q3-08 | |
Computing Solutions (includes process technology license revenue in Q3-08)* | | | | | | | | | |
Revenue | | $ | 1,069 | | 17 | % | | -23 | % |
Microprocessor Units | | | | | up | | | flat | |
Microprocessor Average Selling Prices (ASP) | | | | | up | | | down | |
Graphics | | | | | | | | | |
Revenue | | $ | 306 | | 22 | % | | -21 | % |
Graphic Processor Units | | | | | up | | | flat | |
Graphic Processor Average Selling Prices (ASP) | | | | | down | | | down | |
| * | Computing Solutions Q3-09 revenue decreased 11% compared to Q3-08, excluding the $191 million process technology license revenue in Q3-08. |
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About AMD
Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and technology partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visithttp://www.amd.com
Cautionary Statement
This release contains forward-looking statements concerning AMD Product Company, its fourth quarter 2009 revenue, future financial results, the planned availability of its future products, technologies and manufacturing capacity and production, and its planned positioning for future growth, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “would,” “may,” “expects,” “believes,” “plans,” “intends,” “projects,” and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation’s pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities targeting the company’s business will prevent attainment of the company’s current plans; global business and economic conditions will continue in their current state or worsen resulting in lower than currently expected revenue in the fourth quarter of 2009 and beyond; demand for computers and consumer electronics products and, in turn, demand for the company’s products will be lower than currently expected; customers stop buying the company’s products or materially reduce their demand for its products; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; there will be unexpected variations in market growth and demand for the company’s products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; the company will be unable to transition its products to advanced manufacturing process technologies in a timely and effective way; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will under-utilize its commitment with respect to GLOBALFOUNDRIES’ microprocessor manufacturing facilities. Investors are urged to review in detail the risks and uncertainties in the company’s Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended June 27, 2009.
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AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, and ATI, the ATI logo, and Radeon are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.
| 1 | For financial reporting purposes, AMD consolidates the operating results of GLOBALFOUNDRIES Inc. in its results as of March 2, 2009 and created the Foundry segment as of the start of the fiscal year. References to “AMD” in this announcement include these consolidated operating results which are reported for GAAP purposes. “AMD Product Company” refers to AMD, excluding the operating results of the Foundry segment and Intersegment eliminations. Foundry segment includes the operating results attributable to the front end wafer manufacturing operations and related activities as of the beginning of the first quarter of 2009, which includes the operating results of GLOBALFOUNDRIES from March 2, 2009 through September 26, 2009. Intersegment eliminations consist of revenues, cost of sales and profits on inventory between AMD Product Company and the Foundry segment. |
| 2 | In this press release, in addition to GAAP financial results, the Company has provided non-GAAP financial measures for AMD net income (loss) attributable to AMD common stockholders, operating income (loss) and gross margin. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this press release. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results by, among other things, excluding items that are not indicative of ongoing operating performance. |
| 3 | The Company is providing non-GAAP financial measures for AMD Product Company such as a statement of operations and selected balance sheet items as reflected in this press release. In addition, for AMD Product Company, the Company is providing non-GAAP financial measures such as net income (loss), operating income (loss) and gross margin which exclude certain adjustments as reflected in the tables above. AMD is providing these financial measures because it believes it is important for investors to have visibility into AMD’s financial results excluding the Foundry segment, intersegment eliminations and certain adjustments as reflected in the tables in this press release and to better understand the Company’s financial results absent the requirement to consolidate the financial results of GLOBALFOUNDRIES. |
| 4 | Refer to corresponding tables at the end of this press release for additional AMD and AMD Product Company data. |
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Millions except per share amounts and percentages)
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended | |
| | | Sept. 26, | | | June 27, | | | Sept. 27, | | | Sept. 26, | | | Sept. 27, | |
| | | 2009 | | | 2009 | | | 2008(1) | | | 2009 | | | 2008(1) | |
Net revenue | | $ | 1,396 | | | $ | 1,184 | | | $ | 1,797 | | | $ | 3,757 | | | $ | 4,646 | |
Cost of sales | | | 811 | | | | 743 | | | | 881 | | | | 2,220 | | | | 2,598 | |
| | | | | | | | | | | | | | | | | | | | |
Gross margin | | | 585 | | | | 441 | | | | 916 | | | | 1,537 | | | | 2,048 | |
Gross margin % | | | 42 | % | | | 37 | % | | | 51 | % | | | 41 | % | | | 44 | % |
Research and development | | | 420 | | | | 425 | | | | 438 | | | | 1,289 | | | | 1,383 | |
Marketing, general and administrative | | | 221 | | | | 247 | | | | 315 | | | | 755 | | | | 987 | |
Amortization of acquired intangible assets | | | 17 | | | | 17 | | | | 30 | | | | 52 | | | | 107 | |
Impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | 2 | | | | — | | | | 405 | |
Restructuring charges | | | 4 | | | | 1 | | | | 9 | | | | 65 | | | | 40 | |
Gain on sale of 200 millimeter equipment | | | — | | | | — | | | | — | | | | — | | | | (193 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | (77 | ) | | | (249 | ) | | | 122 | | | | (624 | ) | | | (681 | ) |
| | | | | |
Interest income | | | 4 | | | | 6 | | | | 7 | | | | 13 | | | | 32 | |
Interest expense | | | (114 | ) | | | (108 | ) | | | (94 | ) | | | (319 | ) | | | (296 | ) |
Other income (expense), net | | | 47 | | | | 6 | | | | (13 | ) | | | 147 | | | | (48 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | (140 | ) | | | (345 | ) | | | 22 | | | | (783 | ) | | | (993 | ) |
Provision (benefit) for income taxes | | | (5 | ) | | | (10 | ) | | | (1 | ) | | | 101 | | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | (135 | ) | | | (335 | ) | | | 23 | | | | (884 | ) | | | (992 | ) |
Income (loss) from discontinued operations, net of tax | | | — | | | | — | | | | (150 | ) | | | — | | | | (674 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (135 | ) | | $ | (335 | ) | | $ | (127 | ) | | $ | (884 | ) | | $ | (1,666 | ) |
| | | | | |
Net (income) loss attributable to noncontrolling interest | | | 29 | | | | 25 | | | | (7 | ) | | | 60 | | | | (27 | ) |
Class B preferred accretion | | | (22 | ) | | | (20 | ) | | | — | | | | (50 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Net Income (loss) attributable to AMD common stockholders | | $ | (128 | ) | | $ | (330 | ) | | $ | (134 | ) | | $ | (874 | ) | | $ | (1,693 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to AMD common stockholders per common share | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Basic and diluted | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | (0.18 | ) | | $ | (0.49 | ) | | $ | 0.03 | | | $ | (1.32 | ) | | $ | (1.68 | ) |
Discontinued operations | | | — | | | | — | | | | (0.25 | ) | | | — | | | | (1.11 | ) |
| | | | | | | | | | | | | | | | | | | | |
Basic and diluted net income (loss) attributable to AMD common stockholders per common share | | $ | (0.18 | ) | | $ | (0.49 | ) | | $ | (0.22 | ) | | $ | (1.32 | ) | | $ | (2.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
Shares used in per share calculation | | | | | | | | | | | | | | | | | | | | |
Basic and diluted | | | 694 | | | | 667 | | | | 608 | | | | 662 | | | | 607 | |
| (1) | Includes retrospective adoption of FASB Staff Position Accounting Principles Board No. 14-1,Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1) codified principally in Accounting Standards Codification (ASC) Topic 470, Debt (ASC 470) and FASB Statement No. 160,Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51 (SFAS 160)now codified in ASC Topic 810, Consolidation (ASC 810) in the first quarter of 2009. |
ADVANCED MICRO DEVICES, INC.
AMD NON-GAAP AND RECONCILIATIONS TO CONSOLIDATED STATEMENTS OF OPERATIONS(2)
(Millions except per share amounts and percentages)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended | |
| | | Sept. 26, 2009 | | | June 27, 2009 | | | Sept. 26, 2009 | |
| | | AMD Product
Company (3) | | | Foundry
segment and
intersegment
eliminations (4) | | | AMD | | | AMD Product
Company (3) | | | Foundry
segment and
intersegment
eliminations (4) | | | AMD | | | AMD Product
Company (3) | | | Foundry
segment and
intersegment
eliminations (4) | | | AMD | |
Net revenue | | $ | 1,396 | | | $ | — | | | $ | 1,396 | | | $ | 1,184 | | | $ | — | | | $ | 1,184 | | | $ | 3,757 | | | $ | — | | | $ | 3,757 | |
Cost of sales | | | 860 | | | | (49 | ) | | | 811 | | | | 763 | | | | (20 | ) | | | 743 | | | | 2,323 | | | | (103 | ) | | | 2,220 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross margin | | | 536 | | | | 49 | | | | 585 | | | | 421 | | | | 20 | | | | 441 | | | | 1,434 | | | | 103 | | | | 1,537 | |
Gross margin % | | | 38 | % | | | | | | | 42 | % | | | 36 | % | | | | | | | 37 | % | | | 38 | % | | | | | | | 41 | % |
Research and development | | | 285 | | | | 135 | | | | 420 | | | | 306 | | | | 119 | | | | 425 | | | | 896 | | | | 393 | | | | 1,289 | |
Marketing, general and administrative | | | 195 | | | | 26 | | | | 221 | | | | 222 | | | | 25 | | | | 247 | | | | 669 | | | | 86 | | | | 755 | |
Amortization of acquired intangible assets | | | 17 | | | | — | | | | 17 | | | | 17 | | | | — | | | | 17 | | | | 52 | | | | — | | | | 52 | |
Restructuring charges | | | 4 | | | | — | | | | 4 | | | | 1 | | | | — | | | | 1 | | | | 65 | | | | — | | | | 65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | 35 | | | | (112 | ) | | | (77 | ) | | | (125 | ) | | | (124 | ) | | | (249 | ) | | | (248 | ) | | | (376 | ) | | | (624 | ) |
| | | | | | | | | |
Interest income | | | 3 | | | | 1 | | | | 4 | | | | 3 | | | | 3 | | | | 6 | | | | 12 | | | | 1 | | | | 13 | |
Interest expense | | | (70 | ) | | | (44 | ) | | | (114 | ) | | | (71 | ) | | | (37 | ) | | | (108 | ) | | | (215 | ) | | | (104 | ) | | | (319 | ) |
Other income (expense), net | | | 64 | | | | (17 | ) | | | 47 | | | | 16 | | | | (10 | ) | | | 6 | | | | 208 | | | | (61 | ) | | | 147 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 32 | | | | (172 | ) | | | (140 | ) | | | (177 | ) | | | (168 | ) | | | (345 | ) | | | (243 | ) | | | (540 | ) | | | (783 | ) |
Provision (benefit) for income taxes | | | (24 | ) | | | 19 | | | | (5 | ) | | | (19 | ) | | | 9 | | | | (10 | ) | | | (44 | ) | | | 145 | | | | 101 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 56 | | | $ | (191 | ) | | $ | (135 | ) | | $ | (158 | ) | | $ | (177 | ) | | $ | (335 | ) | | $ | (199 | ) | | $ | (685 | ) | | $ | (884 | ) |
| | | | | | | | | |
Net (income) loss attributable to noncontrolling interest | | | | | | | | | | | 29 | | | | | | | | | | | | 25 | | | | | | | | | | | | 60 | |
Class B preferred accretion | | | | | | | | | | | (22 | ) | | | | | | | | | | | (20 | ) | | | | | | | | | | | (50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to AMD common stockholders | | | | | | | | | | $ | (128 | ) | | | | | | | | | | $ | (330 | ) | | | | | | | | | | $ | (874 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | The Company believes this non-GAAP presentation makes it easier for investors to understand what AMD financial results would be if it were not required to consolidate the operations of GLOBALFOUNDRIES. |
| (3) | Consists of the results of the Computing Solutions and Graphics segments and the All other category. |
| (4) | See footnotes 3 and 5 in Selected Corporate Data |
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
| | | | | | | | |
| | | Sept. 26,
2009
(Unaudited) | | | Dec. 27,
2008(5) | |
| Assets | | | | | | | | |
| | |
Current assets: | | | | | | | | |
Cash, cash equivalents and marketable securities | | $ | 2,511 | | | $ | 1,096 | |
Accounts receivable, net | | | 572 | | | | 320 | |
Inventories | | | 515 | | | | 656 | |
Deferred income taxes | | | 41 | | | | 28 | |
Prepaid expenses and other current assets | | | 279 | | | | 279 | |
| | | | | | | | |
Total current assets | | | 3,918 | | | | 2,379 | |
| | |
Property, plant and equipment, net | | | 3,895 | | | | 4,296 | |
Acquisition related intangible assets, net | | | 116 | | | | 168 | |
Goodwill | | | 323 | | | | 323 | |
Other assets | | | 495 | | | | 506 | |
| | | | | | | | |
Total Assets | | $ | 8,747 | | | $ | 7,672 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity (Deficit) | | | | | | | | |
| | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 589 | | | $ | 631 | |
Accrued compensation and benefits | | | 176 | | | | 162 | |
Accrued liabilities | | | 605 | | | | 785 | |
Deferred income on shipments to distributors | | | 127 | | | | 50 | |
Other short-term obligations | | | 125 | | | | 86 | |
Current portion of long-term debt and capital lease obligations | | | 295 | | | | 286 | |
Other current liabilities | | | 159 | | | | 226 | |
| | | | | | | | |
Total current liabilities | | | 2,076 | | | | 2,226 | |
| | |
Deferred income taxes | | | 243 | | | | 91 | |
Long-term debt and capital lease obligations, less current portion | | | 5,275 | | | | 4,490 | |
Other long-term liabilities | | | 645 | | | | 569 | |
Noncontrolling interest | | | 1,077 | | | | 169 | |
| | |
Stockholders’ equity (deficit): | | | | | | | | |
Capital stock: | | | | | | | | |
Common stock, par value | | | 7 | | | | 6 | |
Capital in excess of par value | | | 6,412 | | | | 6,264 | |
Retained earnings (deficit) | | | (7,125 | ) | | | (6,251 | ) |
Accumulated other comprehensive income | | | 137 | | | | 108 | |
| | | | | | | | |
Total stockholders’ equity (deficit) | | | (569 | ) | | | 127 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity (Deficit) | | $ | 8,747 | | | $ | 7,672 | |
| | | | | | | | |
| (5) | Amounts for the year ended December 27, 2008 were derived from the December 27, 2008 audited financial statements, including retrospective adoption of FSP APB 14-1 (now codified in ASC 470) and SFAS 160 (now codified in ASC 810) implemented in the first quarter of 2009. |
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Unaudited)
(Millions except headcount and percentages)
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended | |
| | | Sept. 26,
2009 | | | June 27,
2009 | | | Sept 27,
2008 | | | Sept. 26,
2009 | | | Sept 27,
2008 | |
Segment and Category Information from Continuing Operations | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Computing Solutions (1) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | $ | 1,069 | | | $ | 910 | | | $ | 1,391 | | | $ | 2,917 | | | $ | 3,686 | |
Operating income (loss) | | $ | 76 | | | $ | (72 | ) | | $ | 143 | | | $ | (31 | ) | | $ | (30 | ) |
| | | | | |
Graphics (2) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 306 | | | | 251 | | | | 385 | | | | 779 | | | | 895 | |
Operating income (loss) | | | 8 | | | | (12 | ) | | | 47 | | | | (3 | ) | | | 22 | |
| | | | | |
Foundry (3) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 256 | | | | 253 | | | | | | | | 792 | | | | | |
Operating income (loss) | | | (101 | ) | | | (101 | ) | | | | | | | (334 | ) | | | | |
| | | | | |
All Other (4) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 21 | | | | 23 | | | | 21 | | | | 61 | | | | 65 | |
Operating income (loss) | | | (49 | ) | | | (41 | ) | | | (68 | ) | | | (214 | ) | | | (673 | ) |
| | | | | |
Intersegment eliminations (5) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | (256 | ) | | | (253 | ) | | | | | | | (792 | ) | | | | |
Operating income (loss) | | | (11 | ) | | | (23 | ) | | | | | | | (42 | ) | | | | |
| | | | | |
Total from Continuing Operations | | | | | | | | | | | | | | | | | | | | |
Net revenue | | $ | 1,396 | | | $ | 1,184 | | | $ | 1,797 | | | $ | 3,757 | | | $ | 4,646 | |
Operating income (loss) | | $ | (77 | ) | | $ | (249 | ) | | $ | 122 | | | $ | (624 | ) | | $ | (681 | ) |
| | | | | |
Revenue Reconciliation | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Revenue from continuing operations | | $ | 1,396 | | | $ | 1,184 | | | $ | 1,797 | | | $ | 3,757 | | | $ | 4,646 | |
Revenue from discontinued operations | | | — | | | | — | | | | 23 | | | | — | | | | 65 | |
| | | | | | | | | | | | | | | | | | | | |
Total revenue | | $ | 1,396 | | | $ | 1,184 | | | $ | 1,820 | | | $ | 3,757 | | | $ | 4,711 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
AMD Product Company (excludes Foundry segment and intersegment eliminations) | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
(excluding amortization of acquired intangible assets) | | $ | 96 | | | $ | 103 | | | | | | | $ | 303 | | | | | |
Capital additions | | $ | 19 | | | $ | 15 | | | | | | | $ | 51 | | | | | |
Adjusted EBITDA (6) | | $ | 215 | | | $ | 14 | | | | | | | $ | 327 | | | | | |
Cash, cash equivalents and marketable securities (7) | | $ | 1,536 | | | $ | 1,637 | | | | | | | $ | 1,536 | | | | | |
Total assets (7) | | $ | 4,376 | | | $ | 4,405 | | | | | | | $ | 4,376 | | | | | |
Long-term debt (7) | | $ | 3,541 | | | $ | 3,703 | | | | | | | $ | 3,541 | | | | | |
Headcount | | | 10,412 | | | | 10,366 | | | | | | | | 10,412 | | | | | |
| | | | | |
AMD | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
(excluding amortization of acquired intangible assets) | | $ | 265 | | | $ | 265 | | | $ | 266 | | | $ | 792 | | | $ | 797 | |
Capital additions | | $ | 97 | | | $ | 112 | | | $ | 83 | | | $ | 293 | | | $ | 509 | |
Adjusted EBITDA (6) | | $ | 263 | | | $ | 50 | | | $ | 407 | | | $ | 390 | | | $ | 585 | |
Headcount | | | 13,379 | | | | 13,281 | | | | 15,460 | | | | 13,379 | | | | 15,460 | |
See footnotes on the next page
| (1) | Computing Solutions segment includes microprocessors, chipsets and embedded processors. |
| (2) | Graphics segment includes graphics, video and multimedia products developed for use in desktop and notebook computers, including home media PCs, professional workstations, servers and also includes royalties received in connection with the sale of game console systems that incorporate the Company’s graphics technology. |
| (3) | Foundry segment includes the operating results attributable to the front end wafer manufacturing operations and related activities as of the beginning of the first quarter of 2009, which includes the operating results of GLOBALFOUNDRIES from March 2, 2009 onward. Prior periods have not been recast. |
| (4) | All Other category includes non-Foundry segment employee stock-based compensation expense and certain operating expenses and credits that are not allocated to the operating segments. Also included in this category are charges for the impairment of goodwill and acquired intangible assets for prior periods, amortization of acquired intangible assets, restructuring and AMD Product Company formation costs associated with GLOBALFOUNDRIES. Details of these significant items are shown below. The All Other category also includes the results of our Handheld business unit. |
Employee stock-based compensation expense, ATI acquisition-related charges, restructuring charges and AMD Product Company formation costs associated with GLOBALFOUNDRIES:
| | | | | | | | | | | | | | | |
| | | Quarter Ended | | Nine Months Ended |
| | | Q309 | | Q209 | | Q308 | | Q309 | | Q308 |
Employee stock-based compensation expense | | $ | 17 | | $ | 18 | | $ | 20 | | $ | 52 | | $ | 59 |
Impairment of goodwill and acquired intangible assets | | | — | | | — | | | 2 | | | — | | | 405 |
Amortization of acquired intangible assets | | | 17 | | | 17 | | | 30 | | | 52 | | | 107 |
Restructuring charges | | | 4 | | | 1 | | | 9 | | | 65 | | | 40 |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | — | | | — | | | 21 | | | — |
| | | | | | | | | | | | | | | |
| | $ | 38 | | $ | 36 | | $ | 61 | | $ | 190 | | $ | 611 |
| | | | | | | | | | | | | | | |
| (5) | Represents intersegment eliminations in revenue and in cost of sales and profits on inventory between AMD Product Company and the Foundry segment. For the quarters ended September 26, 2009, June 27, 2009, and nine months ended September 26, 2009, intersegment eliminations of revenue was $256 million, $253 million and $792 million, respectively. For the quarters ended September 26, 2009, June 27, 2009, and nine months ended September 26, 2009, intersegment eliminations of cost of sales and profits on inventory was $245 million, $230 million and $750 million, respectively. |
| (6) | AMD reconciliation of net income (loss) attributable to AMD common stockholders to AMD Product Company (excluding Foundry segment and intersegment eliminations) Adjusted EBITDA* |
| | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended
Q309 | |
| | | Q309 | | | Q209 | | |
Net income (loss) attributable to AMD common stockholders | | $ | (128 | ) | | $ | (330 | ) | | $ | (874 | ) |
Net income (loss) attributable to noncontrolling interest | | | (29 | ) | | | (25 | ) | | | (60 | ) |
Class B preferred accretion | | | 22 | | | | 20 | | | | 50 | |
Foundry segment and intersegment eliminations net loss | | | 191 | | | | 177 | | | | 685 | |
AMD Product Company net income (loss) | | $ | 56 | | | $ | (158 | ) | | $ | (199 | ) |
Depreciation and amortization | | | 96 | | | | 103 | | | | 303 | |
Amortization of acquired intangible assets | | | 17 | | | | 17 | | | | 52 | |
Interest expense | | | 70 | | | | 71 | | | | 215 | |
Provision (benefit) for income taxes | | | (24 | ) | | | (19 | ) | | | (44 | ) |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | 215 | | | $ | 14 | | | $ | 327 | |
| | | | | | | | | | | | |
AMD reconciliation of net income (loss) attributable to AMD common stockholders to Adjusted EBITDA*
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended | |
| | | Q309 | | | Q209 | | | Q308 | | | Q309 | | | Q308 | |
Net income (loss) attributable to AMD common stockholders | | $ | (128 | ) | | $ | (330 | ) | | $ | (134 | ) | | $ | (874 | ) | | $ | (1,693 | ) |
Impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | 2 | | | | — | | | | 405 | |
Depreciation and amortization | | | 265 | | | | 265 | | | | 266 | | | | 792 | | | | 797 | |
Amortization of acquired intangible assets | | | 17 | | | | 17 | | | | 30 | | | | 52 | | | | 107 | |
Interest expense | | | 114 | | | | 108 | | | | 94 | | | | 319 | | | | 296 | |
Provision (benefit) for income taxes | | | (5 | ) | | | (10 | ) | | | (1 | ) | | | 101 | | | | (1 | ) |
Income (loss) from discontinued operations, net of tax | | | — | | | | — | | | | 150 | | | | — | | | | 674 | |
| | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 263 | | | $ | 50 | | | $ | 407 | | | $ | 390 | | | $ | 585 | |
| | | | | | | | | | | | | | | | | | | | |
| (7) | Reconciliation of select balance sheet items |
| | | | | | | | | | | | | | | | | | |
| | | Q309 | | Q209 |
| | | Cash, cash
equivalents and
marketable securities | | Total Assets | | Long-term debt** | | Cash, cash equivalents
and marketable
securities | | Total Assets | | Long-term debt** |
AMD Product Company | | $ | 1,536 | | $ | 4,376 | | $ | 3,541 | | $ | 1,637 | | $ | 4,405 | | $ | 3,703 |
Foundry segment and intersegment eliminations | | | 975 | | | 4,371 | | | 2,029 | | | 877 | | | 4,278 | | | 1,829 |
| | | | | | | | | | | | | | | | | | |
AMD | | $ | 2,511 | | $ | 8,747 | | $ | 5,570 | | $ | 2,514 | | $ | 8,683 | | $ | 5,532 |
| | | | | | | | | | | | | | | | | | |
| * | The Company defines Adjusted EBITDA as net income (loss) attributable to AMD common stockholders adjusted for impairment of goodwill and acquired intangible assets, depreciation and amortization, amortization of acquired intangible assets, interest expense, taxes and discontinued operations. AMD Product Company's adjusted EBITDA is also adjusted for the Foundry segment and intersegment eliminations net income (loss), net income (loss) attributable to noncontrolling interest and class B preferred accretion. The Company calculates and communicates Adjusted EBITDA because management believes it is of interest to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the U.S. GAAP operating measure of net income or U.S. GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. |
| ** | Long-term debt also includes the current portion of long-term debt and capital lease obligations. |
