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 Fourth Quarter and Annual Results
SUNNYVALE, Calif. — Jan. 21, 2010 — AMD1 (NYSE:AMD) today reported revenue for the fourth quarter of 2009 of $1.646 billion, an increase of 18 percent compared to the previous quarter and 42 percent compared to the fourth quarter of 2008.
In the fourth quarter of 2009, AMD reported net income attributable to AMD common stockholders of $1.178 billion, or $1.52 per share, which includes a net favorable impact of $1.238 billion, or $1.57 per share. AMD reported operating income of $1.288 billion in the quarter, including a net favorable impact of $1.224 billion. The net favorable impacts were primarily from a legal settlement with Intel Corp.2
For the year ended Dec. 26, 2009, AMD reported revenue of $5.403 billion. Fiscal 2009 net income attributable to AMD common stockholders was $304 million. AMD reported revenue of $5.808 billion and a net loss attributable to AMD common stockholders of $3.129 billion for fiscal 2008.
As of the first quarter of 2010, AMD will report operating results for what was formerly referred to as AMD Product Company only and will no longer consolidate the financial results of GLOBALFOUNDRIES. AMD’s investment in GLOBALFOUNDRIES will be accounted for using the equity method.
“AMD’s quarter marks another milestone in our transformation and underscores our growing momentum,” said Dirk Meyer, AMD president and CEO. “We enter 2010 having completed the transition to a fabless business model, reached a historic antitrust settlement, and made significant progress strengthening our balance sheet. Our innovative strategy for designing the world’s most vivid digital experiences continues to generate demand.”
In the third quarter of 2009, AMD had revenue of $1.396 billion, a net loss attributable to AMD common stockholders of $128 million and an operating loss of $77 million. In the fourth quarter of 2008, AMD had revenue of $1.162 billion, a net loss attributable to AMD common stockholders of $1.436 billion and an operating loss of $1.274 billion.
In the fourth quarter of 2009, AMD Product Company reported non-GAAP net income of $80 million and non-GAAP operating income of $169 million. In the third quarter of 2009, AMD Product Company reported non-GAAP net income of $2 million and a non-GAAP operating income of $47 million3. AMD Product Company adjusted EBITDA for the fourth quarter was $282 million, up from $169 million in the prior quarter3.
Fourth quarter 2009 AMD gross margin was 45 percent compared to 42 percent in the prior quarter. Fourth quarter 2009 AMD Product Company non-GAAP gross margin was 41 percent compared to 38 percent in the prior quarter3.
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 revenue to be down seasonally for the first quarter of 2010.
Additional Highlights
| • | | Intel and AMDannounced a comprehensive agreement to end all outstanding legal disputes. Both companies obtained patent rights under a new cross-license agreement, Intel agreed to abide by a set of fair business practice provisions, and Intel paid AMD $1.25 billion. |
| • | | AMD redeemed the remaining amount outstanding of its 7.75% Senior Notes due 2012 (approximately $390 million), reduced the aggregate amount outstanding of its 5.75%Convertible Senior Notes due 2012 by approximately $1 billion and issued $500 million of 8.125% Senior Notes due 2017. In the fourth quarter, AMD decreased its debt due in 2012 by nearly $1.4 billion, to $485 million. |
| • | | Lenovo announced its first AMD-powered notebooks, including theLenovo ThinkPad Edge and Lenovo ThinkPad X100e commercial notebooks based onVISION Pro Technology from AMD. |
2
| • | | Acer, Dell, HP and Lenovo began selling consumer PCs based on the latestAMD Athlon™ II mainstream processors that offer low energy consumption and reduced heat and noise. |
| • | | AMD powers four of thetop five supercomputers in the world, including the world’s highest-performing supercomputer. AMD GPUs also power the world’s highest-performing supercomputer featuring graphics processors. |
| • | | AMD extended its next-generationATI Radeon™ HD 5000 graphics cards, bringing the industry’s onlyDirectX 11-capable cards to additional market segments and enabling new levels of graphics performance for the mobile market. AMDshipped more than two million DirectX 11 GPUs within three months of the launch of the initial products. |
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 fourth quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on theInvestor Relations page of its Web site atwww.amd.com. The webcast will be available for 10 days after the conference call.
3
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) | | Q4-09 | | | Q3-09 | | | Q4-08 | | | 2009 | | | 2008 | |
GAAP net income (loss) attributable to AMD common stockholders / EPS | | $ | 1,178 | | | $ | 1.52 | | | $ | (128 | ) | | $ | (0.18 | ) | | $ | (1,436 | ) | | $ | (2.36 | ) | | $ | 304 | | | $ | 0.45 | | | $ | (3,129 | ) | | $ | (5.17 | ) |
Loss from discontinued operations | | | (3 | ) | | | — | �� | | | — | | | | — | | | | (10 | ) | | | (0.02 | ) | | | (3 | ) | | | — | | | | (684 | ) | | | (1.12 | ) |
Income (loss) attributable to AMD stockholders from continuing operations | | $ | 1,181 | | | $ | 1.52 | | | $ | (128 | ) | | $ | (0.18 | ) | | $ | (1,426 | ) | | $ | (2.34 | ) | | $ | 307 | | | $ | 0.45 | | | $ | (2,445 | ) | | $ | (4.03 | ) |
Process technology license revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 191 | | | | 0.31 | |
Incremental write-down of inventory | | | — | | | | — | | | | — | | | | — | | | | (227 | ) | | | (0.37 | ) | | | — | | | | — | | | | (227 | ) | | | (0.37 | ) |
Gross margin benefit from sales of inventory written down in Q4-08 | | | — | | | | — | | | | 9 | | | | 0.01 | | | | — | | | | — | | | | 171 | | | | 0.25 | | | | — | | | | — | |
Amortization of acquired intangibles | | | (18 | ) | | | (0.02 | ) | | | (17 | ) | | | (0.02 | ) | | | (30 | ) | | | (0.05 | ) | | | (70 | ) | | | (0.10 | ) | | | (137 | ) | | | (0.23 | ) |
ATI impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | — | | | | — | | | | (684 | ) | | | (1.12 | ) | | | — | | | | — | | | | (1,089 | ) | | | (1.79 | ) |
Legal settlements | | | 1,267 | | | | 1.60 | | | | — | | | | — | | | | — | | | | — | | | | 1,267 | | | | 1.87 | | | | — | | | | | |
Restructuring charges | | | — | | | | — | | | | (4 | ) | | | (0.01 | ) | | | (50 | ) | | | (0.08 | ) | | | (65 | ) | | | (0.10 | ) | | | (90 | ) | | | (0.15 | ) |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | | — | | | | — | | | | — | | | | (23 | ) | | | (0.04 | ) | | | (21 | ) | | | (0.03 | ) | | | (23 | ) | | | (0.04 | ) |
Gain on sale of 200 millimeter equipment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 193 | | | | 0.32 | |
Investment net charges | | | — | | | | — | | | | — | | | | — | | | | (21 | ) | | | (0.03 | ) | | | (9 | ) | | | (0.01 | ) | | | (66 | ) | | | (0.11 | ) |
Gain (loss) on debt redemption, net | | | (11 | ) | | | (0.01 | ) | | | 66 | | | | 0.10 | | | | 33 | | | | 0.05 | | | | 169 | | | | 0.25 | | | | 33 | | | | 0.05 | |
Gain on sale of Handheld assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 28 | | | | 0.04 | | | | — | | | | — | |
Incremental tax provision related to the formation of GLOBALFOUNDRIES | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (114 | ) | | | (0.17 | ) | | | — | | | | — | |
Net favorable (unfavorable) impact subtotal | | $ | 1,238 | | | $ | 1.57 | | | $ | 54 | | | $ | 0.08 | | | $ | (1,002 | ) | | $ | (1.65 | ) | | $ | 1,356 | | | $ | 2.00 | | | $ | (1,215 | ) | | $ | (2.00 | ) |
| | | | | | | | | | |
Non-GAAP net income (loss) attributable to AMD common stockholders | | $ | (57 | ) | | | | | | $ | (182 | ) | | | | | | $ | (424 | ) | | | | | | $ | (1,049 | ) | | | | | | $ | (1,230 | ) | | | | |
Net income (loss) from Foundry segment and intersegment eliminations | | | (138 | ) | | | (0.17 | ) | | | (191 | ) | | | (0.28 | ) | | | | | | | | | | | (823 | ) | | | (1.21 | ) | | | | | | | | |
Incremental tax provision related to the formation of GLOBALFOUNDRIES | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | 114 | | | | 0.17 | | | | | | | | | |
Net (income) loss attributable to noncontrolling interest | | | 23 | | | | 0.03 | | | | 29 | | | | 0.04 | | | | | | | | | | | | 83 | | | | 0.12 | | | | | | | | | |
Class B preferred accretion | | | (22 | ) | | | (0.03 | ) | | | (22 | ) | | | (0.03 | ) | | | | | | | | | | | (72 | ) | | | (0.11 | ) | | | | | | | | |
AMD Product Company non-GAAP net income (loss) | | $ | 80 | | | | | | | $ | 2 | | | | | | | | | | | | | | | $ | (351 | ) | | | | | | | | | | | | |
Reconciliation of GAAP to AMD Product Company Non-GAAP Operating Income (Loss)1,2,3,4
| | | | | | | | | | | | | | | | | | | | |
(Millions) | | Q4-09 | | | Q3-09 | | | Q4-08 | | | 2009 | | | 2008 | |
GAAP operating income (loss) | | $ | 1,288 | | | $ | (77 | ) | | $ | (1,274 | ) | | $ | 664 | | | $ | (1,955 | ) |
Process technology license revenue | | | — | | | | — | | | | — | | | | — | | | | 191 | |
Incremental write-down of inventory | | | — | | | | — | | | | (227 | ) | | | — | | | | (227 | ) |
Gross margin benefit from sales of inventory written down in Q4-08 | | | — | | | | 9 | | | | — | | | | 171 | | | | — | |
Amortization of acquired intangibles | | | (18 | ) | | | (17 | ) | | | (30 | ) | | | (70 | ) | | | (137 | ) |
ATI impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | (684 | ) | | | — | | | | (1,089 | ) |
Legal settlement (Intel) | | | 1,242 | | | | — | | | | — | | | | 1,242 | | | | — | |
Restructuring charges | | | — | | | | (4 | ) | | | (50 | ) | | | (65 | ) | | | (90 | ) |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | | — | | | | (23 | ) | | | (21 | ) | | | (23 | ) |
Gain on sale of 200 millimeter equipment | | | — | | | | — | | | | — | | | | — | | | | 193 | |
Non-GAAP operating income (loss) | | $ | 64 | | | $ | (65 | ) | | $ | (260 | ) | | $ | (593 | ) | | $ | (773 | ) |
| | | | | |
Operating income (loss) from Foundry segment and intersegment eliminations | | | (105 | ) | | | (112 | ) | | | | | | | (481 | ) | | | | |
AMD Product Company non-GAAP operating income (loss) | | $ | 169 | | | $ | 47 | | | | | | | $ | (112 | ) | | | | |
Reconciliation of GAAP to AMD Product Company Non-GAAP Gross Margin1,2,3,4
| | | | | | | | | | | | | | | | | | | | |
(Millions, except percentages) | | Q4-09 | | | Q3-09 | | | Q4-08 | | | 2009 | | | 2008 | |
GAAP Gross Margin | | $ | 735 | | | $ | 585 | | | $ | 272 | | | $ | 2,272 | | | $ | 2,320 | |
GAAP Gross Margin % | | | 45 | % | | | 42 | % | | | 23 | % | | | 42 | % | | | 40 | % |
Process technology license revenue | | | — | | | | — | | | | — | | | | — | | | | 191 | |
Incremental write-down of inventory | | | — | | | | — | | | | (227 | ) | | | — | | | | — | |
Gross margin benefit from sales of inventory written down in Q4-08 | | | — | | | | 9 | | | | — | | | | 171 | | | | — | |
Non-GAAP Gross Margin | | $ | 735 | | | $ | 576 | | | $ | 499 | | | $ | 2,101 | | | $ | 2,129 | |
Non-GAAP Gross Margin % | | | 45 | % | | | 41 | % | | | 43 | % | | | 39 | % | | | 38 | % |
Gross margin from Foundry segment and intersegment eliminations | | | 56 | | | | 49 | | | | | | | | 159 | | | | | |
AMD Product Company non-GAAP Gross Margin | | $ | 679 | | | $ | 527 | | | | | | | $ | 1,942 | | | | | |
AMD Product Company non-GAAP Gross Margin % | | | 41 | % | | | 38 | % | | | | | | | 36 | % | | | | |
4
Select Segment Information4
| | | | | | | | | | | | | | | |
(Millions, except percentages) | | Q4-09 | | vs Q3-09 | | | vs Q4-08 | | | 2009 | | vs 2008 | |
Computing Solutions | | | | | | | | | | | | | | | |
Revenue | | $ | 1,214 | | 14 | % | | 39 | % | | $ | 4,131 | | -9 | % |
Microprocessor Units | | | | | up | | | up | | | | | | up | |
Microprocessor Average Selling Prices (ASP) | | | | | up | | | down | | | | | | down | |
Graphics | | | | | | | | | | | | | | | |
Revenue | | $ | 427 | | 40 | % | | 58 | % | | $ | 1,206 | | 4 | % |
Graphic Processor Units | | | | | up | | | up | | | | | | up | |
Graphic Processor Average Selling Prices (ASP) | | | | | up | | | down | | | | | | down | |
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, including its first quarter 2010 revenue and anticipated future demand for its products 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 worsen resulting in lower than currently expected revenue in the first quarter of 2010 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 September 26, 2009.
– 30 –
5
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 consolidated the operating results of GLOBALFOUNDRIES Inc. in its results from March 2, 2009 through December 26, 2009 and created the Foundry segment as of the start of fiscal 2009. 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 December 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 and operating income (loss). 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. Adjusted EBITIDA is also provided as a non-GAAP financial measure and is defined in the selected corporate data tables. 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. |
#210106
6
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Year Ended | |
| | | Dec. 26, | | | Sept. 26, | | | Dec. 27, | | | Dec. 26, | | | Dec. 27, | |
| | | 2009 | | | 2009 | | | 2008(1) | | | 2009 | | | 2008(1) | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | | |
Net revenue | | $ | 1,646 | | | $ | 1,396 | | | $ | 1,162 | | | $ | 5,403 | | | $ | 5,808 | |
Cost of sales | | | 911 | | | | 811 | | | | 890 | | | | 3,131 | | | | 3,488 | |
| | | | | | | | | | | | | | | | | | | | |
Gross margin | | | 735 | | | | 585 | | | | 272 | | | | 2,272 | | | | 2,320 | |
Gross margin % | | | 45 | % | | | 42 | % | | | 23 | % | | | 42 | % | | | 40 | % |
Research and development | | | 432 | | | | 420 | | | | 465 | | | | 1,721 | | | | 1,848 | |
Marketing, general and administrative | | | 239 | | | | 221 | | | | 317 | | | | 994 | | | | 1,304 | |
Legal settlement | | | (1,242 | ) | | | — | | | | — | | | | (1,242 | ) | | | — | |
Amortization of acquired intangible assets | | | 18 | | | | 17 | | | | 30 | | | | 70 | | | | 137 | |
Impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | 684 | | | | — | | | | 1,089 | |
Restructuring charges | | | — | | | | 4 | | | | 50 | | | | 65 | | | | 90 | |
Gain on sale of 200 millimeter equipment | | | — | | | | — | | | | — | | | | — | | | | (193 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | 1,288 | | | | (77 | ) | | | (1,274 | ) | | | 664 | | | | (1,955 | ) |
Interest income | | | 3 | | | | 4 | | | | 7 | | | | 16 | | | | 39 | |
Interest expense | | | (119 | ) | | | (114 | ) | | | (95 | ) | | | (438 | ) | | | (391 | ) |
Other income (expense), net | | | 19 | | | | 47 | | | | 11 | | | | 166 | | | | (37 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 1,191 | | | | (140 | ) | | | (1,351 | ) | | | 408 | | | | (2,344 | ) |
Provision (benefit) for income taxes | | | 11 | | | | (5 | ) | | | 69 | | | | 112 | | | | 68 | |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 1,180 | | | | (135 | ) | | | (1,420 | ) | | | 296 | | | | (2,412 | ) |
Income (loss) from discontinued operations, net of tax | | | (3 | ) | | | — | | | | (10 | ) | | | (3 | ) | | | (684 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 1,177 | | | $ | (135 | ) | | $ | (1,430 | ) | | $ | 293 | | | $ | (3,096 | ) |
Net (income) loss attributable to noncontrolling interest | | | 23 | | | | 29 | | | | (6 | ) | | | 83 | | | | (33 | ) |
Class B preferred accretion | | | (22 | ) | | | (22 | ) | | | — | | | | (72 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Net Income (loss) attributable to AMD common stockholders | | $ | 1,178 | | | $ | (128 | ) | | $ | (1,436 | ) | | $ | 304 | | | $ | (3,129 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to AMD common stockholders per common share | | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 1.68 | | | $ | (0.18 | ) | | $ | (2.34 | ) | | $ | 0.46 | | | $ | (4.03 | ) |
Discontinued operations | | | — | | | | — | | | | (0.02 | ) | | | — | | | | (1.12 | ) |
| | | | | | | | | | | | | | | | | | | | |
Basic net income (loss) attributable to AMD common stockholders per common share | | $ | 1.68 | | | $ | (0.18 | ) | | $ | (2.36 | ) | | $ | 0.46 | | | $ | (5.15 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 1.52 | | | $ | (0.18 | ) | | $ | (2.34 | ) | | $ | 0.45 | | | $ | (4.03 | ) |
Discontinued operations | | | — | | | | — | | | | (0.02 | ) | | | — | | | $ | (1.12 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted net income (loss) attributable to AMD common stockholders per common share | | $ | 1.52 | | | $ | (0.18 | ) | | $ | (2.36 | ) | | $ | 0.45 | | | $ | (5.15 | ) |
| | | | | | | | | | | | | | | | | | | | |
Shares used in per share calculation | | | | | | | | | | | | | | | | | | | | |
Basic | | | 705 | | | | 694 | | | | 609 | | | | 673 | | | | 607 | |
Diluted | | | 791 | | | | 694 | | | | 609 | | | | 678 | | | | 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 | | | Year Ended | |
| | | Dec. 26, 2009 | | | Sept. 26, 2009 | | | Dec. 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 | | $ | 1,646 | | | $ | — | | | $ | 1,646 | | | $ | 1,396 | | | $ | — | | | $ | 1,396 | | | $ | 5,403 | | | $ | — | | | $ | 5,403 | |
Cost of sales | | | 967 | | | | (56 | ) | | | 911 | | | | 860 | | | | (49 | ) | | | 811 | | | | 3,290 | | | | (159 | ) | | | 3,131 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross margin | | | 679 | | | | 56 | | | | 735 | | | | 536 | | | | 49 | | | | 585 | | | | 2,113 | | | | 159 | | | | 2,272 | |
Gross margin % | | | 41 | % | | | | | | | 45 | % | | | 38 | % | | | | | | | 42 | % | | | 39 | % | | | | | | | 42 | % |
Research and development | | | 301 | | | | 131 | | | | 432 | | | | 285 | | | | 135 | | | | 420 | | | | 1,197 | | | | 524 | | | | 1,721 | |
Marketing, general and administrative | | | 209 | | | | 30 | | | | 239 | | | | 195 | | | | 26 | | | | 221 | | | | 878 | | | | 116 | | | | 994 | |
Legal settlement | | | (1,242 | ) | | | — | | | | (1,242 | ) | | | — | | | | — | | | | — | | | | (1,242 | ) | | | — | | | | (1,242 | ) |
Amortization of acquired intangible assets | | | 18 | | | | — | | | | 18 | | | | 17 | | | | — | | | | 17 | | | | 70 | | | | — | | | | 70 | |
Restructuring charges | | | — | | | | — | | | | — | | | | 4 | | | | — | | | | 4 | | | | 65 | | | | — | | | | 65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | 1,393 | | | | (105 | ) | | | 1,288 | | | | 35 | | | | (112 | ) | | | (77 | ) | | | 1,145 | | | | (481 | ) | | | 664 | |
Interest income | | | 3 | | | | — | | | | 3 | | | | 3 | | | | 1 | | | | 4 | | | | 15 | | | | 1 | | | | 16 | |
Interest expense | | | (71 | ) | | | (48 | ) | | | (119 | ) | | | (70 | ) | | | (44 | ) | | | (114 | ) | | | (286 | ) | | | (152 | ) | | | (438 | ) |
Other income (expense), net | | | 13 | | | | 6 | | | | 19 | | | | 64 | | | | (17 | ) | | | 47 | | | | 221 | | | | (55 | ) | | | 166 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 1,338 | | | | (147 | ) | | | 1,191 | | | | 32 | | | | (172 | ) | | | (140 | ) | | | 1,095 | | | | (687 | ) | | | 408 | |
Provision (benefit) for income taxes | | | 20 | | | | (9 | ) | | | 11 | | | | (24 | ) | | | 19 | | | | (5 | ) | | | (24 | ) | | | 136 | | | | 112 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 1,318 | | | | (138 | ) | | | 1,180 | | | | 56 | | | | (191 | ) | | | (135 | ) | | | 1,119 | | | | (823 | ) | | | 296 | |
Income (loss) from discontinued operations, net of tax | | | (3 | ) | | | — | | | | (3 | ) | | | — | | | | — | | | | — | | | | (3 | ) | | | — | | | | (3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 1,315 | | | $ | (138 | ) | | $ | 1,177 | | | $ | 56 | | | $ | (191 | ) | | $ | (135 | ) | | $ | 1,116 | | | $ | (823 | ) | | $ | 293 | |
Net (income) loss attributable to noncontrolling interest | | | | | | | | | | | 23 | | | | | | | | | | | | 29 | | | | | | | | | | | | 83 | |
Class B preferred accretion | | | | | | | | | | | (22 | ) | | | | | | | | | | | (22 | ) | | | | | | | | | | | (72 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to AMD common stockholders | | | | | | | | | | $ | 1,178 | | | | | | | | | | | $ | (128 | ) | | | | | | | | | | $ | 304 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (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)
| | | | | | | | |
| | | Dec. 26, | | | Dec. 27, | |
| | | 2009 | | | 2008(5) | |
| | | (Unaudited) | | | | |
| Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash, cash equivalents and marketable securities | | $ | 2,676 | | | $ | 1,096 | |
Accounts receivable, net | | | 745 | | | | 320 | |
Inventories | | | 567 | | | | 656 | |
Deferred income taxes | | | 9 | | | | 28 | |
Prepaid expenses and other current assets | | | 278 | | | | 279 | |
| | | | | | | | |
Total current assets | | | 4,275 | | | | 2,379 | |
Property, plant and equipment, net | | | 3,809 | | | | 4,296 | |
Acquisition related intangible assets, net | | | 98 | | | | 168 | |
Goodwill | | | 323 | | | | 323 | |
Other assets | | | 573 | | | | 506 | |
| | | | | | | | |
Total Assets | | $ | 9,078 | | | $ | 7,672 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 647 | | | $ | 631 | |
Accrued compensation and benefits | | | 179 | | | | 162 | |
Accrued liabilities | | | 612 | | | | 785 | |
Deferred income on shipments to distributors | | | 138 | | | | 50 | |
Other short-term obligations | | | 171 | | | | 86 | |
Current portion of long-term debt and capital lease obligations | | | 308 | | | | 286 | |
Other current liabilities | | | 155 | | | | 226 | |
| | | | | | | | |
Total current liabilities | | | 2,210 | | | | 2,226 | |
Deferred income taxes | | | 197 | | | | 91 | |
Long-term debt and capital lease obligations, less current portion | | | 4,252 | | | | 4,490 | |
Other long-term liabilities | | | 695 | | | | 569 | |
Noncontrolling interest | | | 1,076 | | | | 169 | |
Stockholders’ equity: | | | | | | | | |
Capital stock: | | | | | | | | |
Common stock, par value | | | 7 | | | | 6 | |
Capital in excess of par value | | | 6,426 | | | | 6,257 | |
Retained earnings (deficit) | | | (5,939 | ) | | | (6,244 | ) |
Accumulated other comprehensive income | | | 154 | | | | 108 | |
| | | | | | | | |
Total stockholders’ equity | | | 648 | | | | 127 | |
| | | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 9,078 | | | $ | 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 | | | Year Ended | |
| | | Dec. 26, | | | Sept. 26, | | | Dec. 27, | | | Dec. 26, | | | Dec. 27, | |
Segment and Category Information from Continuing Operations | | 2009 | | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Computing Solutions (1) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | $ | 1,214 | | | $ | 1,069 | | | $ | 873 | | | $ | 4,131 | | | $ | 4,559 | |
Operating income (loss) | | $ | 158 | | | $ | 76 | | | $ | (431 | ) | | $ | 127 | | | $ | (461 | ) |
Graphics (2) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 427 | | | | 306 | | | | 270 | | | | 1,206 | | | | 1,165 | |
Operating income (loss) | | | 53 | | | | 8 | | | | (10 | ) | | | 50 | | | | 12 | |
Foundry (3) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 309 | | | | 256 | | | | | | | | 1,101 | | | | | |
Operating income (loss) | | | (99 | ) | | | (101 | ) | | | | | | | (433 | ) | | | | |
All Other (4) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | 5 | | | | 21 | | | | 19 | | | | 66 | | | | 84 | |
Operating income (loss) | | | 1,182 | | | | (49 | ) | | | (833 | ) | | | 968 | | | | (1,506 | ) |
Intersegment Eliminations (5) | | | | | | | | | | | | | | | | | | | | |
Net revenue | | | (309 | ) | | | (256 | ) | | | | | | | (1,101 | ) | | | | |
Operating income (loss) | | | (6 | ) | | | (11 | ) | | | | | | | (48 | ) | | | | |
Total from Continuing Operations | | | | | | | | | | | | | | | | | | | | |
Net revenue | | $ | 1,646 | | | $ | 1,396 | | | $ | 1,162 | | | $ | 5,403 | | | $ | 5,808 | |
Operating income (loss) | | $ | 1,288 | | | $ | (77 | ) | | $ | (1,274 | ) | | $ | 664 | | | $ | (1,955 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | |
AMD Product Company (excludes Foundry segment and Intersegment Eliminations) | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
(excluding amortization of acquired intangible assets) | | $ | 95 | | | $ | 96 | | | | | | | $ | 398 | | | | | |
Capital additions | | $ | 37 | | | $ | 19 | | | | | | | $ | 88 | | | | | |
Adjusted EBITDA (6) | | $ | 282 | | | $ | 169 | | | | | | | $ | 527 | | | | | |
Cash, cash equivalents and marketable securities (7) | | $ | 1,772 | | | $ | 1,536 | | | | | | | $ | 1,772 | | | | | |
Total assets (7) | | $ | 4,846 | | | $ | 4,376 | | | | | | | $ | 4,846 | | | | | |
Long-term debt (7) | | $ | 2,607 | | | $ | 3,541 | | | | | | | $ | 2,607 | | | | | |
Headcount | | | 10,352 | | | | 10,412 | | | | | | | | 10,352 | | | | | |
AMD | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
(excluding amortization of acquired intangible assets) | | $ | 266 | | | $ | 265 | | | $ | 271 | | | $ | 1,058 | | | $ | 1,068 | |
Capital additions | | $ | 173 | | | $ | 97 | | | $ | 112 | | | $ | 466 | | | $ | 621 | |
Adjusted EBITDA (6) | | $ | 348 | | | $ | 227 | | | $ | (219 | ) | | $ | 711 | | | $ | 531 | |
Headcount | | | 13,395 | | | | 13,379 | | | | 14,652 | | | | 13,395 | | | | 14,652 | |
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 is a gain for a legal settlement, charges for the impairment of goodwill and acquired intangible assets, 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. |
Legal settlement gain, employee stock-based compensation expense, ATI acquisition-related charges, restructuring charges and AMD Product Company formation costs associated with GLOBALFOUNDRIES:
| | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | Year Ended |
| | | Q409 | | | Q309 | | Q408 | | 2009 | | | 2008 |
Legal settlement | | $ | (1,242 | ) | | $ | — | | $ | — | | $ | (1,242 | ) | | $ | — |
Employee stock-based compensation expense | | | 18 | | | | 17 | | | 20 | | | 70 | | | | 79 |
Impairment of goodwill and acquired intangible assets | | | — | | | | — | | | 684 | | | — | | | | 1,089 |
Amortization of acquired intangible assets | | | 18 | | | | 17 | | | 30 | | | 70 | | | | 137 |
Restructuring charges | | | — | | | | 4 | | | 50 | | | 65 | | | | 90 |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | | — | | | 23 | | | 21 | | | | 23 |
| | | | | | | | | | | | | | | | | |
| | $ | (1,206 | ) | | $ | 38 | | $ | 807 | | $ | (1,016 | ) | | $ | 1,418 |
| | | | | | | | | | | | | | | | | |
| (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 December 26, 2009 and September 26, 2009, and year ended December 26, 2009, intersegment eliminations of revenue was $309 million, $256 million and $1,101 million, respectively. For the quarters ended December 26, 2009 and September 26, 2009, and year ended December 26, 2009, intersegment eliminations of cost of sales and profits on inventory was $303 million, $245 million and $1,053 million, respectively. |
| (6) | AMD reconciliation of operating income (loss) to AMD Product Company (excluding Foundry segment and Intersegment Eliminations) Adjusted EBITDA* |
| | | | | | | | | | | | |
| | | Quarter Ended | | | Year Ended | |
| | | Q409 | | | Q309 | | | 2009 | |
Operating income (loss) | | $ | 1,288 | | | $ | (77 | ) | | $ | 664 | |
Foundry segment and Intersegment Eliminations operating loss | | | 105 | | | | 112 | | | | 481 | |
AMD Product Company net income (loss) | | $ | 1,393 | | | $ | 35 | | | $ | 1,145 | |
Legal settlement | | | (1,242 | ) | | | — | | | | (1,242 | ) |
Depreciation and amortization | | | 95 | | | | 96 | | | | 398 | |
Employee stock-based compensation expense | | | 18 | | | | 17 | | | | 70 | |
Amortization of acquired intangible assets | | | 18 | | | | 17 | | | | 70 | |
Restructuring charges | | | — | | | | 4 | | | | 65 | |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | | — | | | | 21 | |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | 282 | | | $ | 169 | | | $ | 527 | |
| | | | | | | | | | | | |
AMD reconciliation of operating income (loss) to Adjusted EBITDA*
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Year Ended | |
| | | Q409 | | | Q309 | | | Q408 | | | 2009 | | | 2008 | |
Operating income (loss) | | $ | 1,288 | | | $ | (77 | ) | | $ | (1,274 | ) | | $ | 664 | | | $ | (1,955 | ) |
Legal settlement | | | (1,242 | ) | | | — | | | | — | | | | (1,242 | ) | | | — | |
Impairment of goodwill and acquired intangible assets | | | — | | | | — | | | | 684 | | | | — | | | | 1,089 | |
Depreciation and amortization | | | 266 | | | | 265 | | | | 271 | | | | 1,058 | | | | 1,068 | |
Employee stock-based compensation expense | | | 18 | | | | 18 | | | | 20 | | | | 75 | | | | 79 | |
Amortization of acquired intangible assets | | | 18 | | | | 17 | | | | 30 | | | | 70 | | | | 137 | |
Restructuring charges | | | — | | | | 4 | | | | 50 | | | | 65 | | | | 90 | |
AMD Product Company formation costs associated with GLOBALFOUNDRIES | | | — | | | | — | | | | — | | | | 21 | | | | 23 | |
| | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 348 | | | $ | 227 | | | $ | (219 | ) | | $ | 711 | | | $ | 531 | |
| | | | | | | | | | | | | | | | | | | | |
| (7) | Reconciliation of select balance sheet items |
| | | | | | | | | | | | | | | | | | |
| | | Q409 | | Q309 |
| | | 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 | | $ | 1,772 | | $ | 4,846 | | $ | 2,607 | | $ | 1,536 | | $ | 4,376 | | $ | 3,541 |
Foundry segment and intersegment eliminations | | | 904 | | | 4,232 | | | 1,953 | | | 975 | | | 4,371 | | | 2,029 |
| | | | | | | | | | | | | | | | | | |
AMD | | $ | 2,676 | | $ | 9,078 | | $ | 4,560 | | $ | 2,511 | | $ | 8,747 | | $ | 5,570 |
| | | | | | | | | | | | | | | | | | |
| * | Starting with the quarter ended December 26, 2009, the Company defines Adjusted EBITDA as operating income (loss) adjusted for a legal settlement gain, impairment of goodwill and acquired intangible assets, depreciation & amortization, employee stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, and AMD Product Company formation costs associated with GLOBALFOUDNRIES. 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 operating 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. |
