AMD Reports 2014 Second Quarter Results

AMD Reports 2014 Second Quarter Results 
Transformation Strategy on Track 
SUNNYVALE, CA -- (Marketwired) -- 07/17/14 --  AMD (NYSE: AMD) 
Q2 2014 Results 


 
--  Revenue of $1.44 billion, increased 3 percent sequentially and 24
    percent year-over-year
--  Gross margin of 35 percent
--  Operating income of $63 million and non-GAAP(1) operating income of
    $67 million
--  Net loss of $36 million, loss per share of $0.05 and non-GAAP(1) net
    income of $17 million, earnings per share of $0.02

  
AMD (NYSE: AMD) today announced revenue for the second quarter of 2014
of $1.44 billion, operating income of $63 million and net loss of $36
million, or $0.05 per share. Non-GAAP operating income was $67
million and non-GAAP net income, which primarily excludes $49 million
of loss from debt redemption in the quarter, was $17 million, or
$0.02 per share.   
"The second quarter capped off a solid first half of the year for AMD
with strong revenue growth and improved financial performance," said
Rory Read, AMD president and CEO. "Our transformation strategy is on
track and we expect to deliver full year non-GAAP profitability and
year-over-year revenue growth. We continue to strengthen our business
model and shape AMD into a more agile company offering differentiated
solutions for a diverse set of markets." 


 
                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                  Q2-14           Q1-14           Q2-13     
----------------------------------------------------------------------------
Revenue                           $1.44B          $1.40B          $1.16B    
----------------------------------------------------------------------------
Operating income (loss)            $63M            $49M           $(29)M    
----------------------------------------------------------------------------
Net loss / Loss per share     $(36)M/$(0.05)  $(20)M/$(0.03)  $(74)M/$(0.10)
----------------------------------------------------------------------------
                                   
                                         
                                                                            
                        Non-GAAP Financial Results(1)                       
                                                                            
----------------------------------------------------------------------------
                                  Q2-14           Q1-14           Q2-13     
----------------------------------------------------------------------------
Revenue                           $1.44B          $1.40B          $1.16B    
----------------------------------------------------------------------------
Operating income (loss)            $67M            $66M           $(20)M    
----------------------------------------------------------------------------
Net income (loss) / Earnings                                                
 (loss) per share               $17M/$0.02      $12M/$0.02    $(65)M/$(0.09)
----------------------------------------------------------------------------

 
Quarterly Financial Summary 


 
--  Gross margin was 35 percent in Q2 2014.
    --  Gross margin was flat sequentially.
--  Cash, cash equivalents and marketable securities were $948 million at
    the end of the quarter, significantly higher than the target minimum
    of $600 million and close to the optimal zone of $1 billion.
--  Total debt at the end of the quarter was $2.21 billion, an increase
    from $2.14 billion at the end of Q1 2014.
    --  During Q2 2014, the company continued re-profiling its near-term
        debt maturities, issuing $500 million in aggregate principal
        amount of 7.00% Senior Notes due 2024 and repurchasing all $452
        million aggregate principal amount of the company's outstanding
        8.125% Senior Notes due 2017.
--  Computing Solutions segment revenue increased 1 percent sequentially
    and decreased 20 percent year-over-year. The year-over-year decline
    was due to decreased microprocessor unit shipments.
    --  Operating income was $9 million, an improvement from an operating
        loss of $3 million in Q1 2014 and operating income of $2 million
        in Q2 2013. The sequential increase was primarily driven by
        improved gross margin due to a richer mix of notebook products
        while the year-over-year increase was primarily driven by lower
        operating expenses.
    --  Microprocessor average selling price (ASP) increased sequentially
        and year-over-year.
--  Graphics and Visual Solutions segment revenue increased 5 percent
    sequentially and 141 percent year-over-year driven largely by
    increased semi-custom SoC shipments. Graphics processor unit (GPU)
    revenue decreased sequentially and year-over-year, primarily due to a
    decrease in AIB channel sales, partially offset by increased sales of
    professional graphics and desktop OEM GPUs.
    --  Operating income was $82 million compared with $91 million in Q1
        2014 and breakeven in Q2 2013. The sequential decline was
        primarily due to lower GPU revenue, while the year-over-year
        increase was driven by increased sales of semi-custom SoCs.
    --  GPU ASP decreased sequentially and year-over-year, primarily
        driven by lower AIB channel sales.

  
Recent Highlights 


 
--  AMD unveiled further details on its ambidextrous computing roadmap,
    including a 64-bit ARM architecture license and plans to develop
    custom high-performance ARM and x86 processor cores for 2016. The
    company's differentiated x86 and ARM strategy is designed to deliver
    unmatched computing and graphics performance using a shared, flexible
    infrastructure to drive new innovations.
--  AMD appointed Dr. Lisa Su to Chief Operating Officer, responsible for
    overseeing the company's previously separate global operations,
    operating segments and sales organization to drive growth in both
    traditional PC and adjacent markets.
--  AMD realigned its organization structure to deliver unmatched customer
    value in both traditional PC markets and adjacent high-growth markets.
    Effective July 1, 2014, AMD's two new reportable segments are as
    follows:
    --  Computing and Graphics segment, which will primarily include
        desktop and notebook processors and chipsets, discrete GPUs and
        professional graphics;
    --  Enterprise, Embedded and Semi-Custom segment, which will primarily
        include server and embedded processors, dense servers, semi-custom
        SoC products, development services and technology for game
        consoles.
    --  AMD's Quarterly Report on Form 10-Q for the quarter ended
        September 27, 2014 will reflect this new segment reporting
        structure.
--  AMD detailed its plans to accelerate the energy efficiency of its
    accelerated processing units (APUs) delivering 25x efficiency
    improvements by 2020 through design optimizations, intelligent power
    management and Heterogeneous System Architecture advances that are
    expected to enable AMD to outpace the industry's historical energy
    efficiency trend by at least 70 percent.
--  AMD continued to gain
 momentum with its embedded products in the
    second quarter.
    --  The company introduced the 2nd-generation embedded R-Series APU as
        well as the AMD embedded G-Series SoC and CPU solutions, which
        will power HP thin clients and Advantech's new embedded industrial
        solution and are ideally suited for ATMs, kiosks and medical
        equipment applications.
    --  AMD embedded Radeon(TM) graphics were selected by Boeing for its
        next-generation advanced cockpit display systems.
--  AMD publicly demonstrated for the first time its 64-bit ARM-based AMD
    Opteron(TM) A-Series processor, codenamed "Seattle," a significant
    step forward in expanding the footprint of ultra-efficient 64-bit ARM
    solutions for cloud computing and the Internet of Things.
--  AMD expanded its mobile APU offerings in the quarter:
    --  Acer, Dell, HP and Lenovo have all introduced notebooks powered by
        AMD's newest 3rd-generation mainstream mobile APUs, which combine
        category-leading compute performance(2,3) with unique features and
        rich user interactions.
    --  AMD also launched its most advanced mobile APUs for consumer and
        commercial notebooks. The new 2014 performance mobile APUs include
        AMD's first FX-branded enthusiast class APU for notebooks as well
        as AMD Pro A-Series APUs. HP is offering the AMD PRO A-Series APUs
        across its Elite 700-Series notebooks, desktops and all-in-ones,
        with additional OEMs expected to introduce systems later this
        year.
--  AMD expanded its 2nd-generation Graphics Core Next-based professional
    graphics solutions with the introduction of the AMD FirePro W8100
    professional graphics card, which delivers 38x more performance(4)
    than the closest competitive offerings based on double precision
    testing. Dell, HP and more than 10 workstation system integrators have
    all announced systems featuring the new card.
--  AMD's groundbreaking Mantle API, which creates more immersive
    experiences that take fuller advantage of modern APUs and GPUs to
    deliver console-like experiences, will be used by Electronic Arts in
    the upcoming  Battlefield Hardline(TM), Dragon Age:
    Inquisition(TM) and Plants vs. Zombies: Garden Warfare(TM) games.
    More than 40 game titles supporting Mantle are in development with
    more than 50 developers actively working with the API for future
    titles.

  
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 third quarter of 2014, AMD expects revenue to increase 2
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 second 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)                                          Q2-14    Q1-14    Q2-13 
----------------------------------------------------------------------------
GAAP operating income (loss)                      $     63 $     49 $   (29)
----------------------------------------------------------------------------
  Workforce rebalancing severance charges                -       14       - 
----------------------------------------------------------------------------
  Amortization of acquired intangible assets             4        3       4 
----------------------------------------------------------------------------
  Restructuring and other special charges, net           -        -       5 
----------------------------------------------------------------------------
Non-GAAP operating income (loss)                  $     67 $     66 $   (20)
----------------------------------------------------------------------------
                                                                            
                                                                            
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss)               
                                                                            
                            ------------------------------------------------
(Millions except per share                                                  
 amounts)                         Q2-14           Q1-14           Q2-13     
----------------------------------------------------------------------------
GAAP net loss / Loss per                                                    
 share                       $  (36) $(0.05) $  (20) $(0.03) $  (74) $(0.10)
----------------------------------------------------------------------------
  Workforce rebalancing                                                     
   severance charges              -       -      14    0.02       -       - 
----------------------------------------------------------------------------
  Loss on debt redemption        49    0.06      15    0.02       -       - 
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets              4    0.01       3    0.00       4    0.01 
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges, net           -       -       -       -       5    0.01 
----------------------------------------------------------------------------
Non-GAAP net income (loss) /                                                
 Earnings (loss) per share   $   17  $ 0.02  $   12  $ 0.02  $  (65) $(0.09)
----------------------------------------------------------------------------

 
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 earnings press release contains forward-looking statements
concerning AMD, its ability to deliver non-GAAP profitability and
revenue growth; its ability to diversify its business; its targeted
and optimal cash, cash equivalents and marketable securities
balances; expected OEM introductions of its products and its expected
third quarter of 2014 revenue; 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," "would" 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 may negatively
impact AMD's plans; that AMD will require additional funding and may
be unable to raise sufficient capital on favorable terms, or at all;
that customers stop buying AMD's products or materially reduce their
operations or demand for AMD's products; that AMD 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 AMD's third-party foundry suppliers will be unable to transition
AMD's products to advanced manufacturing process technologies in a
timely and effective way or to manufacture AMD's products on a timely
basis in sufficient quantities and using competitive process
technologies; that AMD 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, Inc. (GF) microprocessor manufacturing
facilities; that AMD'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 AMD is unable to
successfully implement its long-term business strategy; that AMD
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 AMD 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 AMD's products; that AMD 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 AMD'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 will not improve or will worsen; that 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 AMD's sales or supply chain. Investors are urged to review in
detail the risks and uncertainties in AMD's Securities and Exchange
Commission filings, including but not limited to the Quarterly Report
on Form 10-Q for the quarter ended March 29, 2014.  
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 earnings press release, in addition to GAAP financial results,  
    AMD 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 earnings press   
    release. AMD 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 earnings press release. AMD 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 AMD believes it assists investors in
    comparing AMD'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 the data tables at the  
    end of this earnings press release for additional AMD data.             
(2) Testing conducted by AMD Performance Labs on optimized AMD reference    
    systems. PC manufacturers may vary configuration yielding different     
    results. Basemark CL is used to simulate compute performance; AMD A6-   
    6310 APU scored 21 while the "Haswell U" Pentium part scored 3. AMD     
    "Larne" reference platform system using AMD A6-6310 APU with AMD Radeon(TM)
    R4 Graphics, 2x2048 MBytes of DDR3-1600 RAM, Microsoft Windows 8.1      
    Single Language, and 13.300.0.0 - 13-Jan-2014 driver. Intel(R) Pentium(R)   
    3556U @ 1.70GHz with Intel(R) HD Graphics, 2x2048 MBytes of DDR3-1600 RAM,
    Microsoft Windows 8.1 Single Language, 10.18.10.3412 - 28-Jan-2014      
    driver. BMN-11                                                          
(3) Testing conducted by AMD Performance Labs on optimized AMD reference    
    systems. PC manufacturers may vary configuration yielding different     
    results. Basemark CL is used to simulate compute performance; A4 Micro- 
    6400T APU scored 13 while the "Bay Trail T" platform scored 4. AMD      
    "Discovery" reference platform system using AMD A4 Micro-6400T APU with 
    Radeon(TM) R6 Graphics, 2048 MBytes of DDR3-                               
(4) SiSoftware Sandra test details: System Description: AMD FirePro W8100   
    vs. Nvidia Quadro K5000 - Dell T3610, Intel Xeon E5-1620 v2 @ 3.60 GHz, 
    8GB DDR3, Seagate HDD 7200RPM, Win7 64-bit SP1, 1920x1080 resolution.   
    AMD Driver 13.352.1009 | Nvidia Driver 333.11                           
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                             Three Months Ended          Six Months Ended   
                      -------------------------------  -------------------- 
                       Jun. 28,   Mar. 29,   Jun. 29,   Jun. 28,   Jun. 29, 
                         2014       2014       2013       2014       2013   
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Net revenue           $   1,441  $   1,397  $   1,161  $   2,838  $   2,249 
                                                                            
Cost of sales         $     943        910        702  $   1,853      1,345 
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Gross margin          $     498        487        459        985        904 
                                                                            
Gross margin %               35%        35%        40%        35%        40%
                                                                            
Research and                                                                
 development          $     277        279        308        556        620 
                                                                            
Marketing, general                                                          
 and administrative   $     154        156        171        310        350 
                                                                            
Amortization of                                                             
 acquired intangible                                                        
 assets               $       4          3          4          7          9 
                                                                            
Restr
ucturing and                                                           
 other special                                                              
 charges, net         $       -          -          5          -         52 
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Operating income                                                            
 (loss)               $      63         49        (29)       112       (127)
                                                                            
Interest income       $       -          1          2          1          3 
Interest expense      $     (46)       (47)       (42)       (93)       (86)
Other expense, net    $     (49)       (21)        (2)       (70)        (5)
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Loss before income                                                          
 taxes                $     (32)       (18)       (71)       (50)      (215)
                                                                            
Provision for income                                                        
 taxes                $       4          2          3          6          5 
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Net loss              $     (36) $     (20) $     (74) $     (56) $    (220)
                                                                            
                                                                            
Net loss per share                                                          
                                                                            
  Basic               $   (0.05) $   (0.03) $   (0.10) $   (0.07) $   (0.29)
                                                                            
  Diluted             $   (0.05) $   (0.03) $   (0.10) $   (0.07) $   (0.29)
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Shares used in per                                                          
 share calculation                                                          
                                                                            
  Basic                     764        761        752        762        751 
                                                                            
  Diluted                   764        761        752        762        751 
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                             Three Months Ended          Six Months Ended   
                      -------------------------------  -------------------- 
                       Jun. 28,   Mar. 29,   Jun. 29,   Jun. 28,   Jun. 29, 
                         2014       2014       2013       2014       2013   
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Total comprehensive                                                         
 loss                 $     (32) $     (21) $     (76) $     (53) $    (223)
                                                                            
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS                                       
(Millions)                                                                  
                                                                            
                                            ---------  ---------  --------- 
                                             Jun. 28,   Mar. 29,   Dec. 28, 
                                               2014       2014       2013   
                                                                            
                                            ---------  ---------  --------- 
                                                                            
Assets                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                 $     503  $     554  $     869 
  Marketable securities                           445        348        228 
  Accounts receivable, net                        872        840        832 
  Inventories, net                                960        869        884 
  Prepaid expenses and other current assets       152         79         71 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total current assets                      2,932      2,690      2,884 
                                                                            
Long-term marketable securities                     -         80         90 
Property, plant and equipment, net                329        337        346 
Acquisition related intangible assets, net         72         75         78 
Goodwill                                          553        553        553 
Other assets                                      360        373        386 
                                            ---------  ---------  --------- 
                                                                            
Total Assets                                $   4,246  $   4,108  $   4,337 
                                            =========  =========  ========= 
                                                                            
Liabilities and Stockholders' Equity                                        
                                                                            
Current liabilities:                                                        
  Short-term debt                           $     101  $      60  $      60 
  Accounts payable                                511        483        519 
  Payable to GLOBALFOUNDRIES                      295        213        364 
  Accrued and other current liabilities           480        482        530 
  Deferred income on shipments to                                           
   distributors                                   118        146        145 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total current liabilities                 1,505      1,384      1,618 
                                                                            
Long-term debt                                  2,109      2,078      1,998 
Other long-term liabilities                       131        135        177 
                                                                            
Stockholders' equity:                                                       
  Capital stock:                                                            
    Common stock, par value                         8          8          7 
    Additional paid-in capital                  6,905      6,883      6,894 
    Treasury stock, at cost                      (114)      (114)      (112)
  Accumulated def
icit                          (6,299)    (6,263)    (6,243)
  Accumulated other comprehensive income                                    
   (loss)                                           1         (3)        (2)
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total stockholders' equity                  501        511        544 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
Total Liabilities and Stockholders' Equity  $   4,246  $   4,108  $   4,337 
                                            =========  =========  ========= 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                     Three Months Ended   Six Months Ended  
                                     ------------------  ------------------ 
                                          Jun. 28,            Jun. 28,      
                                            2014                2014        
                                                                            
                                     ------------------  ------------------ 
                                                                            
Cash flows from operating                                                   
 activities:                                                                
  Net loss                           $              (36) $              (56)
  Adjustments to reconcile net loss                                         
   to net cash used in operating                                            
   activities:                                                              
    Depreciation and amortization                    53                 106 
    Employee stock-based                                                    
     compensation expense                            21                  44 
    Non-cash interest expense                         3                   9 
    Loss on debt redemptions                         49                  64 
    Other                                            (1)                 (4)
  Changes in operating assets and                                           
   liabilities:                                                             
    Accounts receivable                             (32)                (40)
    Inventories                                     (90)                (76)
    Prepaid expenses and other                                              
     assets                                         (75)                (84)
    Payable to GLOBALFOUNDRIES                       82                 (69)
    Accounts payable, accrued                                               
     liabilities and other                           (2)               (126)
                                     ------------------  ------------------ 
Net cash used in operating                                                  
 activities                          $              (28) $             (232)
                                     ------------------  ------------------ 
                                                                            
Cash flows from investing                                                   
 activities:                                                                
  Purchases of property, plant and                                          
   equipment                                        (23)                (44)
  Purchases of available-for-sale                                           
   securities                                      (308)               (618)
  Proceeds from sale and maturity of                                        
   available-for-sale securities                    288                 488 
                                     ------------------  ------------------ 
Net cash used in investing                                                  
 activities                          $              (43) $             (174)
                                     ------------------  ------------------ 
                                                                            
Cash flows from financing                                                   
 activities:                                                                
  Net proceeds from foreign grants                                          
   and allowances                    $                2  $                2 
  Proceeds from issuance of common                                          
   stock                                              1                   2 
  Proceeds from borrowings, net                     491               1,080 
  Repayments of long-term debt and                                          
   capital lease obligations                       (473)             (1,042)
  Other                                              (1)                 (2)
                                     ------------------  ------------------ 
Net cash provided by financing                                              
 activities                          $               20  $               40 
                                     ------------------  ------------------ 
Net decrease in cash and cash                                               
 equivalents                                        (51)               (366)
                                     ------------------  ------------------ 
Cash and cash equivalents at                                                
 beginning of period                 $              554  $              869 
                                     ------------------  ------------------ 
Cash and cash equivalents at end of                                         
 period                              $              503  $              503 
                                     ------------------  ------------------ 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                                                                            
                                Three Months Ended         Six Months Ended 
------------------------------------------------------     -----------------
                              Jun.     Mar.     Jun.         Jun.     Jun.  
                              28,      29,      29,          28,      29,   
Segment and Category                                                        
 Information                  2014     2014     2013         2014     2013  
                                                                            
------------------------------------------------------     -----------------
                                                                            
 Computing Solutions (1)                                                    
  Net revenue      
         $   669  $   663  $   841      $ 1,332  $ 1,592 
  Operating income (loss)   $     9  $    (3) $     2      $     6  $   (37)
                                                                            
 Graphics and Visual                                                        
  Solutions (2)                                                             
  Net revenue                   772      734      320        1,506      657 
  Operating income               82       91        -          173       16 
                                                                            
 All Other (3)                                                              
  Operating loss                (28)     (39)     (31)         (67)    (106)
                                                                            
 Total                                                                      
  Net revenue               $ 1,441  $ 1,397  $ 1,161      $ 2,838  $ 2,249 
  Operating income (loss)   $    63  $    49  $   (29)     $   112  $  (127)
                                                                            
------------------------------------------------------     -----------------
                                                                            
Other Data                                                                  
                                                                            
 Depreciation and                                                           
  amortization, excluding                                                   
  amortization of acquired                                                  
  intangible assets         $    49  $    50  $    54      $    99  $   116 
 Capital additions          $    23  $    21  $    28      $    44  $    48 
 Adjusted EBITDA (4)        $   137  $   139  $    54      $   276  $    94 
 Cash, cash equivalents and                                                 
  marketable securities     $   948  $   982  $ 1,117      $   948  $ 1,117 
 Non-GAAP free cash flow                                                    
  (5)                       $   (51) $  (225) $   (63)     $  (276) $  (238)
 Total assets               $ 4,246  $ 4,108  $ 3,897      $ 4,246  $ 3,897 
 Total debt                 $ 2,210  $ 2,138  $ 2,047      $ 2,210  $ 2,047 
 Headcount                   10,300   10,397    9,928       10,300    9,928 
                                                                            
------------------------------------------------------     -----------------
                                                                            

 
                                                                            
                                                                            
(1) Computing Solutions segment primarily 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 primarily includes graphics       
    processing units (GPU), including professional graphics, semi-custom    
    System-on-Chip (SOC) products, development services and technology for  
    game consoles.                                                          
                                                                            
(3) All Other category primarily 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 and        
    employee stock-based compensation expense. In addition, the Company     
    also included the following adjustments for the indicated periods: for  
    the first quarter of 2014, the Company included an adjustment for       
    workforce rebalancing severance charges and for the second quarter of   
    2013 and six months ending June 29, 2013, the Company included an       
    adjustment for net restructuring and other special charges. The Company 
    also reports the results of former businesses in the All Other category 
    because the operating results were not material.                        
                                                                            
(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*      
                                                                            
                                Three Months Ended        Six Months Ended  
                           ----------------------------  ------------------ 
                           Jun. 28,  Mar. 29,  Jun. 29,  Jun. 28,  Jun. 29, 
                             2014      2014      2013      2014      2013   
                           --------  --------  --------  --------  -------- 
    GAAP operating income                                                   
     (loss)                $     63  $     49  $    (29) $    112  $   (127)
      Workforce                                                             
       rebalancing                                    -                   - 
       severance charges          -        14                  14           
      Depreciation and                                                      
       amortization              49        50        54        99       116 
      Employee stock-based                                                  
       compensation                                                         
       expense                   21        23        20        44        44 
      Amortization of                                                       
       acquired intangible                                                  
       assets                     4         3         4         7           
                                                                          9 
      Restructuring and                                                     
       other special                                  5                  52 
       charges, net               -         -                   -           
                           --------  --------  --------  --------  -------- 
    Adjusted EBITDA        $    137  $    139  $     54  $    276  $     94 
                           ========  ========  ========  ========  ======== 
                                                                            
                                                                            
(5) Non-GAAP free cash flow reconciliation**                                
                                                                            
                                Three Months Ended        Six Months Ended  
                           ----------------------------  ------------------ 
                           Jun. 28,  Mar. 29,  Jun. 29,  Jun. 28,  Jun. 29, 
                             2014      2014      2013      2014      2013   
                           --------  --------  --------  --------  -------- 
    GAAP net cash used in                                                   
     operating activities  $    (28) $   (204) $    (35) $   (232) $   (190)
      Purchases of                                                          
       property, plant and                                                  
       equipment                (23)      (21)      (28)      (44)      (48)
                           --------  --------  --------  --------  -------- 
    Non-GAAP free cash                                                      
     flow                  $    (51) $   (225) $    (63) $   (276) $   (238)
                           ========  ========  ========  ========  ======== 
                                                                            
                                                                            
    * 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 indicated periods: for the first quarter of 2014,   
    the Company included an adjustment for workforce rebalancing severance  
    charges and for second quarter of 2013 and six months ending June 29,   
    2013, the Company included an adjustment for net restructuring and      
    other special charges. The Company calculates and communicates Adjusted 
    EBITDA in the earnings press release 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    
    press release as a supplemental measure of its performance. Non-GAAP    
    free cash flow is determined by adjusting GAAP net cash used in         
    operating activities for capital expenditures. The Company calculates   
    and communicates non-GAAP free cash flow in the financial earnings      
    press release 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         
    earnings press release 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 
 
 
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