AMD Reports 2013 Third Quarter Results

AMD Reports 2013 Third Quarter Results 
Company Returns to Profitability With Product Diversification
Strategy 
SUNNYVALE, CA -- (Marketwired) -- 10/17/13 --  AMD (NYSE: AMD) 
Q3 2013 Results 


 
--  AMD revenue $1.46 billion, increased 26 percent sequentially and 15
    percent year-over-year
--  Gross margin 36 percent
--  Operating income of $95 million and non-GAAP(1) operating income of
    $78 million
--  Net income of $48 million, earnings per share of $0.06 and non-GAAP(1)
    net income of $31 million, earnings per share of $0.04

  
AMD (NYSE: AMD) today announced revenue for the third quarter of 2013
of $1.46 billion, operating income of $95 million and net income of
$48 million, or $0.06 per share. The company reported non-GAAP
operating income of $78 million and non-GAAP net income of $31
million, or $0.04 per share. 
"AMD returned to profitability and generated free cash flow in the
third quarter as we continued to successfully execute the strategic
transformation plan we outlined a year ago," said Rory Read, AMD
president and CEO. "We achieved 26 percent sequential revenue growth
driven by our semi-custom business and remain committed to generating
approximately 50 percent of revenue from high-growth markets over the
next two years. Developing industry-leading technology remains at our
core, and we are in the middle of a multi-year journey to redefine
AMD as a leader across a more diverse set of growth markets."  


 
                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                  Q3-13           Q2-13           Q3-12     
----------------------------------------------------------------------------
Revenue                           $1.46B          $1.16B          $1.27B    
----------------------------------------------------------------------------
Operating income (loss)            $95M           $(29)M         $(131)M    
----------------------------------------------------------------------------
Net income (loss) / Earnings    $48M/$0.06    $(74)M/$(0.10) $(157)M/$(0.21)
 (loss) per share                                                           
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                      Non-GAAP Financial Results (1)                        
                                                                            
----------------------------------------------------------------------------
                                  Q3-13           Q2-13           Q3-12     
----------------------------------------------------------------------------
Revenue                           $1.46B          $1.16B          $1.27B    
----------------------------------------------------------------------------
Operating income (loss)            $78M           $(20)M         $(124)M    
----------------------------------------------------------------------------
Net income (loss) / Earnings    $31M/$0.04    $(65)M/$(0.09) $(150)M/$(0.20)
 (loss) per share                                                           
----------------------------------------------------------------------------

 
Quarterly Financial Summary 


 
--  Gross margin was 36 percent in Q3 2013.
    --  Gross margin decreased sequentially. Q3 2013 gross margin included
        a $19 million benefit, approximately 1 percentage point, from the
        sale of inventory that had been previously reserved in Q3 2012 as
        compared to a similar $11 million benefit, approximately 1
        percentage point, in Q2 2013.
--  Cash, cash equivalents and marketable securities balance, including
    long-term marketable securities, was $1.2 billion at the end of the
    quarter, slightly above our targeted optimal level of $1.1 billion.
--  Computing Solutions segment revenue decreased 6 percent sequentially
    and decreased 15 percent year-over-year. The sequential and
    year-over-year declines were due to decreased notebook and chipset
    unit shipments, partially offset by an increase in desktop unit
    shipments.
    --  Operating income was $22 million, compared with operating income
        of $2 million in Q2 2013 and an operating loss of $114 million in
        Q3 2012. The Q3 2012 operating loss included an inventory
        write-down of approximately $100 million primarily consisting of
        first generation A-Series accelerated processing units (APUs).
    --  Microprocessor Average Selling Price (ASP) was flat sequentially
        and decreased year-over-year.
--  Graphics and Visual Solutions (GVS) is comprised of graphics
    processing units (GPUs), including professional graphics, as well as
    semi-custom products and development and game console royalties.
    --  GVS segment revenue increased 110 percent sequentially and
        increased 96 percent year-over-year driven largely by our
        semi-custom business. GPU revenue declined sequentially and
        year-over-year. In the third quarter customers began transitioning
        to our new products late in the quarter.
    --  Operating income was $79 million compared with breakeven in Q2
        2013 and $18 million in Q3 2012.
    --  GPU ASP decreased sequentially and year-over-year.

  
Recent Highlights 


 
--  AMD announced the AMD Radeon(TM) R7 and R9 Series graphics cards.
    Based on the award-winning Graphics Core Next (GCN) architecture, the
    AMD Radeon R7 Series graphics cards support AMD's "Mantle" technology
    which enables game developers to more easily harness the full
    capabilities of the GCN cores across both PCs and consoles(2) to offer
    an unmatched level of hardware optimization, revolutionary performance
    and image quality. AMD's newest graphics chips also include AMD
    TrueAudio Technology(3), the world's first fully programmable audio
    pipeline on a graphics card.
--  Verizon announced that its high-performance public cloud with
    best-in-class reliability is powered by AMD's SeaMicro SM15000(TM)
    servers.
--  As a part of driving the company's growth in embedded markets, AMD
    extended its embedded System-on-a-Chip (SoC) product portfolio with
    the launch of a new low-power AMD Embedded G-Series SOC for fanless
    designs at approximately 3-watts average power. AMD also detailed its
    plans to become the first and only company to offer both 64-bit ARM
    and x86 embedded solutions starting in 2014.
--  Toshiba and HP announced new 2-in-1 PCs based on the 2013 AMD Elite
    Mobility APU. These innovative designs offer the full Windows 8 touch
    PC experience in a notebook that performs equally well as a tablet
    when desired.
--  HP announced the new thin and light HP ZBook 14 mobile workstations
    that rely on AMD FirePro(TM) professional graphics.
--  AMD selected SAPPHIRE Technology to be the exclusive global
    distribution partner for AMD FirePro professional graphics, driving
    stronger support for AMD FirePro professional graphics by delivering
    new distribution resources to AMD's channel ecosystem companies
    worldwide.
--  AMD and Mixamo introduced the world's first real-time facial capture
    technology for the Unity game development platform, enabling
    developers to capture their facial expressions through standard
    webcams and transfer them in real time onto a 3D character.
--  AMD announced senior leaders from ARM, DICE/Electronic Arts,
    Imagination Technologies, Mediatek USA, Oracle, Sony and Unity
    Technologies will keynote APU13, the company's third annual developer
    conference.
--  Adobe announced further enhancements to its Adobe(R) Creative
    Cloud(TM) suite to accelerate the performance and improve the
    quality of its applications when running on AMD APUs and discrete
    GPUs.
--  AMD was recognized for its excellence in corporate responsibility,
    making the Dow Jones Sustainability Index for the ninth consecutive
    year.

  
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 "Cautionary Statement" below.  
For the fourth quarter of 2013, AMD expects revenue to increase 5
percent, plus or minus 3 percent, sequentially.  
For additional details regarding AMD's results and outlook please see
the CFO commentary posted at quarterlyearnings.amd.com. 
AMD Teleconference  
AMD will hold a conference call for the financial community at 2:30
p.m. PT (5:30 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 at
www.amd.com. The webcast will be available for 12 months after the
conference call.  


 
                                                                            
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) (1)              
                                                                            
                                                 ---------------------------
(Millions)                                         Q3-13    Q2-13    Q3-12  
----------------------------------------------------------------------------
GAAP operating income (loss)                      $    95  $   (29) $  (131)
----------------------------------------------------------------------------
  Amortization of acquired intangible assets            5        4        4 
----------------------------------------------------------------------------
  Restructuring and other special charges                                   
   (gains), net                                       (22)       5        3 
----------------------------------------------------------------------------
Non-GAAP operating income (loss)                  $    78  $   (20) $  (124)
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Net Income (Loss)                        
                                                                            
                            ------------------------------------------------
(Millions except per share                                                  
 amounts)                         Q3-13           Q2-13           Q3-12     
----------------------------------------------------------------------------
GAAP net income (loss) /                                                    
 Earnings (loss) per share   $   48  $ 0.06  $  (74) $(0.10) $ (157) $(0.21)
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets              5    0.01       4    0.01       4    0.01 
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges (gains),                                                 
   net                          (22)  (0.03)      5    0.01       3       - 
----------------------------------------------------------------------------
Non-GAAP net income (loss) /                                                
 Earnings (loss) per share   $   31  $ 0.04  $  (65) $(0.09) $ (150) $(0.20)
----------------------------------------------------------------------------

 
About AMD
 AMD (NYSE: AMD) designs and integrates technology that
powers millions of intelligent devices, including personal computers,
tablets, game consoles and cloud servers that define the new era of
surround computing. AMD solutions enable people everywhere to realize
the full potential of their favorite devices and applications to push
the boundaries of what is possible. For more information, visit
www.amd.com.  
Cautionary Statement
 This document contains forward-looking
statements concerning AMD, its fourth quarter of 2013 revenue, AMD's
ability to generate approximately 50 percent of its business from
high-growth markets over the next two years and AMD's ability to
diversify its product portfolio; 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 "believes," "expects," "may," "will," "should," "seeks,"
"intends," "pro forma," "estimates," "anticipates," "plans,"
"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 Corp.'s
pricing, marketing and rebating programs, product bundling, standard
setting, new product introductions or other activities may negatively
impact the Company's plans, that the Company will require additional
funding and may be unable to raise sufficient capital on favorable
terms, or at all; that customers stop buying the Company's products
or materially reduce their operations or demand for the Company's
products; that the Company may be unable to develop, launch and ramp
new products and technologies in the volumes that are required by the
market at mature yields on a timely basis; that the Company's third
party foundry suppliers will be unable to transition the Company's
products to advanced manufacturing process technologies in a timely
and effective way or to manufacture the Company's products on a
timely basis in sufficient quantities and using competitive process
technologies; that the Company will be unable to obtain sufficient
manufacturing capacity or components to meet demand for its products
or will not fully utilize its projected manufacturing capacity needs
at GLOBALFOUNDRIES (GF) microprocessor manufacturing facilities; that
the Company's requirements for wafers will be less than the fixed
number of wafers that it agreed to purchase from GF or GF encounters
problems that significantly reduce the number of functional die it
receives from each wafer; that the Company is unable to successfully
implement its long-term business strategy; that the Company
inaccurately estimates the quantity or type of products that its
customers will want in the future or will ultimately end up
purchasing, resulting in excess or obsolete inventory; that the
Company is unable to manage the risks related to the use of its
third-party distributors and add-in-board (AIB) partners or offer the
appropriate incentives to focus them on the sale of the Company's
products; that the Company may be unable to maintain the level of
investment in research and development that is required to remain
competitive; that there may 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;
that global business and economic conditions, including PC market
conditions, will not improve or will worsen; that demand for
computers will be lower than currently expected; and the effect of
political or economic instability, domestically or internationally,
on the Company's sales or supply chain. 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 29, 2013.  
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations
thereof, 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)   In this press release, in addition to GAAP financial results, the     
      company has provided non-GAAP financial measures including non-GAAP   
      operating income (loss), non-GAAP net income (loss) and non-GAAP      
      earnings (loss) per share. These non-GAAP financial measures reflect  
      certain adjustments as presented in the tables in this press release. 
      The company also provided Adjusted EBITDA and non-GAAP free cash flow 
      as supplemental measures of its performance. These items are defined  
      in the footnotes to the selected corporate data tables provided at the
      end of this press release. The company is providing these financial   
      measures because it believes this non-GAAP presentation makes it      
      easier for investors to compare its operating results for current and 
      historical periods and also because the Company believes it assists   
      investors in comparing the company's performance across reporting     
      periods on a consistent basis by excluding items that it does
 not     
      believe are indicative of its core operating performance and for the  
      other reasons described in the footnotes to the selected data tables. 
      Refer to corresponding tables at the end of this press release for    
      additional AMD data.                                                  
                                                                            
(2)   Application support for Mantle is required.                           
                                                                            
(3)   AMD TrueAudio technology is offered with select AMD Radeon(TM) R9 and R7 
      200 Series GPUs and is designed to improve acoustic realism. Requires 
      enabled game or application. Not all audio equipment supports all     
      audio effects; additional audio equipment may be required for some    
      audio effects. Not all products feature all technologies -- check with
      your component or system manufacturer for specific capabilities.      
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                                   Quarter Ended          Nine Months Ended 
                           ----------------------------  ------------------ 
                           Sep. 28,  Jun. 29,  Sep. 29,  Sep. 28,  Sep. 29, 
                             2013      2013      2012      2013      2012   
                           --------  --------  --------  --------  -------- 
                                                                            
Net revenue                $  1,461  $  1,161  $  1,269  $  3,710  $  4,267 
                                                                            
Cost of sales                   940       702       877     2,285     3,210 
                           --------  --------  --------  --------   ------- 
                                                                            
Gross margin                    521       459       392     1,425     1,057 
                                                                            
Gross margin %                   36%       40%       31%       38%       25%
                                                                            
Research and development        288       308       328       908     1,041 
                                                                            
Marketing, general and                                                      
 administrative                 155       171       188       505       630 
                                                                            
Amortization of acquired                                                    
 intangible assets                5         4         4        14         9 
                                                                            
Restructuring and other                                                     
 special charges (gains),                                                   
 net                            (22)        5         3        30        11 
                           --------  --------  --------  --------  -------- 
                                                                            
Operating income (loss)          95       (29)     (131)      (32)     (634)
                                                                            
Interest income                   1         2         2         4         6 
Interest expense                (47)      (42)      (44)     (133)     (130)
Other income (expense),                                                     
 net                              2        (2)       16        (3)       10 
                           --------  --------  --------  --------  -------- 
                                                                            
Income (loss) before                                                        
 income taxes                    51       (71)     (157)     (164)     (748)
                                                                            
Provision (benefit) for                                                     
 income taxes                     3         3         -         8       (38)
                           --------  --------  --------  --------  -------- 
                                                                            
Net income (loss)          $     48  $    (74) $   (157) $   (172) $   (710)
                                                                            
                                                                            
Net income (loss) per                                                       
 share                                                                      
                                                                            
  Basic                    $   0.06  $  (0.10) $  (0.21) $  (0.23) $  (0.96)
                                                                            
  Diluted                  $   0.06  $  (0.10) $  (0.21) $  (0.23) $  (0.96)
                           --------  --------  --------  --------  -------- 
                                                                            
Shares used in per share                                                    
 calculation                                                                
                                                                            
  Basic                         757       752       745       753       739 
                                                                            
  Diluted                       764       752       745       753       739 
                           --------  --------  --------  --------  -------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                                   Quarter Ended          Nine Months Ended 
                           ----------------------------  ------------------ 
                           Sep. 28,  Jun. 29,  Sep. 29,  Sep. 28,  Sep. 29, 
                             2013      2013      2012      2013      2012   
                           --------  --------  --------  --------  -------- 
                                                                            
Total comprehensive income                                                  
 (loss)                    $     52  $    (76) $   (154) $   (171) $   (706)
                           --------  --------  --------  --------  -------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS                                       
(Millions)                                                                  
                                                                            
                                         ----------  ----------  ---------- 
                                          Sep. 28,    Jun. 29,    
Dec. 29,  
                                            2013        2013        2012    
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
Assets                                                                      
                                                                            
Current assets:                                                             
  Cash, cash equivalents and marketable                                     
   securities                            $    1,060  $      968  $    1,002 
  Accounts receivable, net                      873         670         630 
  Inventories, net                              922         711         562 
  Prepaid expenses and other current                                        
   assets                                        84         109          71 
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
      Total current assets                    2,939       2,458       2,265 
                                                                            
Long-term marketable securities                 121         149         181 
Property, plant and equipment, net              358         402         658 
Acquisition related intangible assets,                                      
 net                                             82          87          96 
Goodwill                                        553         553         553 
Other assets                                    264         248         247 
                                         ----------  ----------  ---------- 
                                                                            
Total Assets                             $    4,317  $    3,897  $    4,000 
                                         ==========  ==========  ========== 
                                                                            
Liabilities and Stockholders' Equity                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                       $      574  $      402  $      278 
  Payable to GLOBALFOUNDRIES                    495         414         454 
  Accrued liabilities                           528         475         489 
  Deferred income on shipments to                                           
   distributors                                 139         129         108 
  Current portion of long-term debt and                                     
   capital lease obligations                      5           5           5 
  Other current liabilities                      21          26          63 
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
      Total current liabilities               1,762       1,451       1,397 
                                                                            
Long-term debt and capital lease                                            
 obligations, less current portion            2,044       2,042       2,037 
Other long-term liabilities                      77          45          28 
                                                                            
Stockholders' equity:                                                       
  Capital stock:                                                            
    Common stock, par value                       7           7           7 
    Additional paid-in capital                6,872       6,848       6,803 
    Treasury stock, at cost                    (111)       (110)       (109)
  Accumulated deficit                        (6,332)     (6,380)     (6,160)
  Accumulated other comprehensive loss           (2)         (6)         (3)
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
      Total stockholders' equity                434         359         538 
                                         ----------  ----------  ---------- 
                                                                            
                                                                            
Total Liabilities and Stockholders'                                         
 Equity                                  $    4,317  $    3,897  $    4,000 
                                         ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                                    Quarter     Nine Months 
                                                     Ended         Ended    
                                                 ------------  ------------ 
                                                   Sep. 28,      Sep. 28,   
                                                     2013          2013     
                                                 ------------  ------------ 
                                                                            
Cash flows from operating activities:                                       
  Net income (loss)                              $         48  $       (172)
  Adjustments to reconcile net income (loss) to                             
   net cash provided by (used in) operating                                 
   activities:                                                              
    Depreciation and amortization                          57           182 
    Net (gain) loss on disposal of property,                                
     plant and equipment                                  (17)           30 
    Benefit for deferred income taxes                      (1)            - 
    Employee stock-based compensation expense              23            67 
    Non-cash interest expense                               6            18 
    Other                                                   -             1 
  Changes in operating assets and liabilities:            
                  
    Accounts receivable                                  (203)         (242)
    Inventories                                          (211)         (360)
    Prepaid expenses and other current assets              24           (18)
    Other assets                                          (34)          (67)
    Payable to GLOBALFOUNDRIES                             81            41 
    Accounts payable, accrued liabilities and                               
     other                                                248           351 
                                                 ------------  ------------ 
Net cash provided by (used in) operating                                    
 activities                                      $         21  $       (169)
                                                 ------------  ------------ 
                                                                            
Cash flows from investing activities:                                       
  Purchases of property, plant and equipment              (15)          (63)
  Proceeds from sale of property, plant and                                 
   equipment                                               57           238 
  Purchases of available-for-sale securities             (232)         (985)
  Proceeds from sale and maturity of available-                             
   for-sale securities                                    376           969 
                                                 ------------  ------------ 
Net cash provided by investing activities        $        186  $        159 
                                                 ------------  ------------ 
                                                                            
Cash flows from financing activities:                                       
  Net proceeds from foreign grants and                                      
   allowances                                               4             6 
  Proceeds from issuance of common stock                    1             3 
  Repayments of debt and capital lease                                      
   obligations                                             (2)           (4)
  Other                                                    (1)           (1)
                                                 ------------  ------------ 
Net cash provided by financing activities        $          2  $          4 
                                                 ------------  ------------ 
Net increase (decrease) in cash and cash                                    
 equivalents                                              209            (6)
                                                 ------------  ------------ 
Cash and cash equivalents at beginning of period $        334  $        549 
                                                 ------------  ------------ 
Cash and cash equivalents at end of period       $        543  $        543 
                                                 ------------  ------------ 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                                   Quarter Ended          Nine Months Ended 
-------------------------------------------------------- -------------------
Segment and Category       Sep. 28,  Jun. 29,  Sep. 29,  Sep. 28,  Sep. 29, 
 Information                 2013      2013      2012      2013      2012   
-------------------------------------------------------- -------------------
                                                                            
  Computing Solutions (1)                                                   
    Net revenue            $    790  $    841  $    927  $  2,382  $  3,176 
    Operating income                                                        
     (loss)                $     22  $      2  $   (114) $    (15) $     92 
                                                                            
  Graphics and Visual                                                       
   Solutions (2)                                                            
    Net revenue                 671       320       342     1,328     1,091 
    Operating income             79         -        18        95        83 
                                                                            
  All Other (3)                                                             
    Operating loss               (6)      (31)      (35)     (112)     (809)
                                                                            
  Total                                                                     
    Net revenue            $  1,461  $  1,161  $  1,269  $  3,710  $  4,267 
    Operating income                                                        
     (loss)                $     95  $    (29) $   (131) $    (32) $   (634)
                                                                            
-------------------------------------------------------- -------------------
                                                                            
Other Data                                                                  
                                                                            
  Depreciation and                                                          
   amortization, excluding                                                  
   amortization of                                                          
   acquired intangible                                                      
   assets                  $     52  $     54  $     62  $    168  $    185 
  Capital additions        $     15  $     28  $     32  $     63  $    111 
  Adjusted EBITDA (4)      $    153  $     54  $    (35) $    247  $    359 
  Cash, cash equivalents                                                    
   and marketable                                                           
   securities, including                                                    
   long-term marketable                                                     
   securities              $  1,181  $  1,117  $  1,480  $  1,181  $  1,480 
  Non-GAAP free cash flow                                                   
   (5)                     $      6  $    (63) $   (272) $   (232) $   (163)
  Total assets             $  4,317  $  3,897  $  4,612  $  4,317  $  4,612 
  Long-term debt and                                                        
   capital lease                                                            
   obligations, including                                                   
   current portion         $  2,049  $  2,047  $  2,040  $  2,049  $  2,040 
  Headcount                  10,330     9,928    11,813    10,330    11,813 
                                                                            
-------------------------------------------------------- -------------------
                                                                            
                                                                            
                                                                            
(1) Computing Solutions segment includes x86 microprocessors, as standalone 
     devices or as incorporated as an accelerated processing unit (APU),    
     chipsets, embedded processors and dense servers.                       
                                                                            
(2) Graphics and Visual Solutions segment includes graphics processing units
     (GPU), including professional graphics, semi-custom products and       
     technology for game consoles.                                          
                                                                            
(3) All Other category includes certain expenses and credits that are not   
     allocated to any of the operating segments. Also included in this      
     category are amortization of acquired intangible assets, employee      
     stock-based compensation expense, net restructuring and other special  
     charges and a charge related to the limited waiver of exclusivity from 
     GLOBALFOUNDRIES ("GF").                                                
                                                                            
(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*      
                                                                            
                                   Quarter Ended          Nine Months 
Ended 
                           ----------------------------  ------------------ 
                           Sep. 28,  Jun. 29,  Sep. 29,  Sep. 28,  Sep. 29, 
                             2013      2013      2012      2013      2012   
                           --------  --------  --------  --------  -------- 
    GAAP operating income                                                   
     (loss)                $     95  $    (29) $   (131) $    (32)     (634)
      Depreciation and                                                      
       amortization              52        54        62       168       185 
      Employee stock-based                                                  
       compensation                                                         
       expense                   23        20        27        67        74 
      Amortization of                                                       
       acquired intangible                                                  
       assets                     5         4         4        14         9 
      Restructuring and                                                     
       other special                                                        
       charges (gains),                                                     
       net                      (22)        5         3        30        11 
                           --------  --------  --------  --------  -------- 
    Adjusted EBITDA        $    153  $     54  $    (35) $    247  $    359 
                           ========  ========  ========  ========  ======== 
                                                                            
                                                                            
(5) Non-GAAP free cash flow reconciliation**                                
                                                                            
                                   Quarter Ended          Nine Months Ended 
                           ----------------------------  ------------------ 
                           Sep. 28,  Jun. 29,  Sep. 29,  Sep. 28,  Sep. 29, 
                             2013      2013      2012      2013      2012   
                           --------  --------  --------  --------  -------- 
    GAAP net cash provided                                                  
     by (used in)                                                           
     operating activities  $     21  $    (35) $   (240) $   (169) $    (52)
      Purchases of                                                          
       property, plant and                                                  
       equipment                (15)      (28)      (32)      (63)     (111)
                           --------  --------  --------  --------  -------- 
    Non-GAAP free cash                                                      
     flow                  $      6  $    (63) $   (272) $   (232) $   (163)
                           ========  ========  ========  ========  ======== 
                                                                            
* The Company presents Adjusted EBITDA as a supplemental measure of its     
 performance. Adjusted EBITDA for the Company is determined by adjusting    
 operating income (loss) for depreciation and amortization, employee stock- 
 based compensation expense and amortization of acquired intangible assets. 
 In addition, the Company also included the following adjustments for the   
 applicable period: for all periods presented, the Company also included an 
 adjustment for net restructuring and other special charges (gains); and for
 nine months ended September 29, 2012, the Company also included adjustments
 for the limited waiver of exclusivity from GLOBALFOUNDRIES, legal          
 settlement with a third party and costs related to the acquisition of      
 SeaMicro, Inc. The Company calculates and communicates Adjusted EBITDA in  
 the financial schedules because the Company's management believes it is of 
 importance to investors and lenders in relation to its overall capital     
 structure and its ability to borrow additional funds. In addition, the     
 Company presents Adjusted EBITDA because it believes this measure assists  
 investors in comparing its performance across reporting periods on a       
 consistent basis by excluding items that the Company does not believe are  
 indicative of its core operating performance. 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 GAAP operating measure of         
 operating income (loss) or 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.              
** The Company also presents non-GAAP free cash flow in the earnings release
 as a supplemental measure of its performance. Non-GAAP free cash flow is   
 determined by adjusting GAAP net cash provided by (used in) operating      
 activities for capital expenditures. The Company calculates and            
 communicates non-GAAP free cash flow in the financial schedules because the
 Company's management believes it is of importance to investors to          
 understand the nature of these cash flows. The Company's calculation of    
 non-GAAP free cash flow may or may not be consistent with the calculation  
 of this measure by other companies in the same industry. Investors should  
 not view non-GAAP free cash flow as an alternative to GAAP liquidity       
 measures of cash flows from operating activities. The Company has provided 
 reconciliations within the press release and financial schedules of these  
 non-GAAP financial measures to the most directly comparable GAAP financial 
 measures.                                                                  

  
Media Contact
Drew Prairie
512-602-4425
drew.prairie@amd.com 
Investor Contact
Ruth Cotter
408-749-3887
ruth.cotter@amd.com 
 
 
Press spacebar to pause and continue. Press esc to stop.