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AMD Reports 2014 Third Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Oct 16, 2014 -- AMD (NYSE: AMD)

AMD (NYSE: AMD) today announced revenue for the third quarter of 2014 of $1.43 billion, operating income of $63 million and net income of $17 million, or $0.02 per share. Non-GAAP (1) operating income was $66 million and non-GAAP (1) net income was $20 million, or $0.03 per share.

"AMD's third quarter financial performance reflects progess in diversifying our business," said Dr. Lisa Su, AMD president and CEO. "Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business. Our top priority is to deliver leadership technologies and products as we continue to transform AMD."

                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                        Q3-14         Q2-14         Q3-13   
----------------------------------------------------------------------------
 Revenue                               $1.43B        $1.44B        $1.46B   
----------------------------------------------------------------------------
 Operating income                       $63M          $63M          $95M    
----------------------------------------------------------------------------
 Net income (loss) / Earnings (loss)                                        
 per share                           $17M/$0.02  $(36)M/$(0.05)  $48M/$0.06 
----------------------------------------------------------------------------
                                                                            
                                                                            
                        Non-GAAP Financial Results(1)                       
                                                                            
                                                                            
----------------------------------------------------------------------------
                                          Q3-14        Q2-14        Q3-13   
----------------------------------------------------------------------------
 Revenue                                 $1.43B       $1.44B       $1.46B   
----------------------------------------------------------------------------
 Operating income                         $66M         $67M         $78M    
----------------------------------------------------------------------------
 Net income / Earnings per share       $20M/$0.03   $17M/$0.02   $31M/$0.04 
----------------------------------------------------------------------------
                                                                            

Effective July 1, 2014, AMD reorganized into two business groups, one focused on the traditional PC market and the second focused on adjacent high-growth opportunities.

Accordingly, AMD has two reportable segments:

Quarterly Financial Summary

Q4 2014 Restructuring and Transformation Initiatives
As a part of AMD's ongoing transformation work, the company has developed a targeted restructuring plan to better position AMD for profitability and long-term growth while aligning investments and resources with high-priority opportunities.

The restructuring plan, which will be largely implemented in Q4 2014, is expected to:

"While decisions that impact the size of our global team are never entered into lightly, this is the right step to ensure we prioritize our resources and engineering investments in our highest-priority opportunities that can drive improved profitability and long-term growth," said Dr. Su.

Recent Highlights

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 Q4 2014, AMD expects revenue to decrease 13 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(1)

                                                                            
                                                ----------------------------
(Millions)                                        Q3-14     Q2-14     Q3-13 
----------------------------------------------------------------------------
GAAP operating income                           $     63  $    435  $    426
----------------------------------------------------------------------------
  Amortization of acquired intangible assets           3         4         5
----------------------------------------------------------------------------
  Restructuring and other special charges                                   
   (gains), net                                        -         -      (22)
----------------------------------------------------------------------------
Non-GAAP operating income                       $     66  $    431  $    443
----------------------------------------------------------------------------
                                                                            

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income

                                                                            
                                                                            
                             -----------------------------------------------
(Millions except per share                                                  
 amounts)                         Q3-14           Q2-14           Q3-13     
----------------------------------------------------------------------------
GAAP net income (loss) /                                                    
 Earnings (loss) per share   $    17 $  0.02 $  (36) $(0.05) $    48 $  0.06
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets               3    0.00       4    0.01       5    0.01
----------------------------------------------------------------------------
  Loss on debt redemption          -       -      49    0.06       -       -
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges (gains),                                                 
   net                             -       -       -       -    (22)  (0.03)
----------------------------------------------------------------------------
Non-GAAP net income /                                                       
 Earnings per share          $    20 $  0.03 $    17 $  0.02 $    31 $  0.04
----------------------------------------------------------------------------

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 and the conference call remarks contain forward-looking statements concerning AMD; its ability to increase profitability and improve financial performance; its restructuring plan, including the timing of actions implemented in connection with the plan and expected restructuring and impairment charges, cash payments and operational savings; expected benefits of its restructuring plan and transformation initiatives; its expected fourth quarter of 2014 revenue; and timing of and expected revenue in connection with its future products, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "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 June 28, 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, 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.                                                   
                                                                            
2.  Compared to the previous generation of AMD FirePro™ professional        
    graphics.                                                               
                                                                            
3.  AMD FirePro™ S9150 max power is 235W and delivers up to 2.53 TFLOPS peak
    double and up to 5.07 peak single precision floating point performance. 
    Nvidia's highest performing server cards in the market as of June 2014  
    are the Tesla K40, max power of 235W, with up to 1.43 TFLOPS peak double
    and up to 4.29 peak single, and the K10, max power 225W, with up to 4.58
    TFLOPS peak single and 190 GFLOPS peak double precision. Visit          
    
www.nvidia.com/object/tesla-servers.html for Nvidia product  
    specs. FP-97                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                                Three Months Ended        Nine Months Ended 
                           ----------------------------  ------------------ 
                           Sep. 27,  Jun. 28,  Sep. 28,  Sep. 27,  Sep. 28, 
                             2014      2014      2013      2014      2013   
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Net revenue                $  1,429  $  1,441  $  1,461  $  4,267  $  3,710 
                                                                            
Cost of sales                   935       943       940  $  2,788     2,285 
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Gross margin                    494       498       521     1,479     1,425 
                                                                            
Gross margin%                    35%       35%       36%       35%       38%
                                                                            
Research and development        278       277       288       834       908 
                                                                            
Marketing, general and                                                      
 administrative                 150       154       155       460       505 
                                                                            
Amortization of acquired                                                    
 intangible assets                3         4         5        10        14 
                                                                            
Restructuring and other                                                     
 special charges (gains),                                                   
 net                              -         -       (22)        -        30 
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Operating income (loss)          63        63        95       175       (32)
                                                                            
Interest income                   1         -         1         2         4 
Interest expense                (43)      (46)      (47)     (136)     (133)
Other income (expense),                                                     
 net                             (2)      (49)        2       (72)       (3)
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Income (loss) before                                                        
 income taxes                    19       (32)       51       (31)     (164)
                                                                            
Provision for income taxes        2         4         3         8         8 
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Net income (loss)          $     17  $    (36) $     48  $    (39) $   (172)
                                                                            
                                                                            
Net income (loss) per                                                       
 share                                                                      
                                                                            
  Basic                    $   0.02  $  (0.05) $   0.06  $  (0.05) $  (0.23)
                                                                            
  Diluted                  $   0.02  $  (0.05) $   0.06  $  (0.05) $  (0.23)
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Shares used in per share                                                    
 calculation                                                                
                                                                            
  Basic                         770       764       757       765       753 
                                                                            
  Diluted                       785       764       764       765       753 
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                                Three Months Ended        Nine Months Ended 
                           ----------------------------  ------------------ 
                           Sep. 27,  Jun. 28,  Sep. 28,  Sep. 27,  Sep. 28, 
                             2014      2014      2013      2014      2013   
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
Total comprehensive income                                                  
 (loss)                    $     15  $    (32) $     52  $    (38) $   (171)
                                                                            
                           --------  --------  --------  --------  -------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS                                       
(Millions)                                                                  
                                                                            
                                            ---------  ---------  --------- 
                                             Sep. 27,   Jun. 28,   Dec. 28, 
                                               2014       2014       2013   
                                                                            
                                            ---------  ---------  --------- 
                                                                            
Assets                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                 $     640  $     503  $     869 
  Marketable securities                           298        445        228 
  Accounts receivable, net                        973        872        832 
  Inventories, net                                897        960        884 
  Prepaid expenses and other current assets       212        152         71 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total current assets                      3,020      2,932      2,884 
                                                                            
Long-term marketable securities                     -          -         90 
Property, plant and equipment, net                328        329        346 
Acquisition related intangible assets, net         69         72         78 
Goodwill                                          553        553        553 
Other assets                                      355        360        386 
                                            ---------  ---------  --------- 
                                                                            
Total Assets                                $   4,325  $   4,246  $   4,337 
                                            =========  =========  ========= 
                                                                            
Liabilities and Stockholders' Equity                                        
                                                                            
Current liabilities:                                                        
  Short-term debt                           $     102  $     101  $      60 
  Accounts payable                                498        511        519 
  Payable to GLOBALFOUNDRIES                      317        295        364 
  Accrued and other current liabilities           555        480        530 
  Deferred income on shipments to                                           
   distributors                                    94        118        145 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total current liabilities                 1,566      1,505      1,618 
                                                                            
Long-term debt                                  2,106      2,109      1,998 
Other long-term liabilities                       118        131        177 
                                                                            
Stockholders' equity:                                                       
  Capital stock:                                                            
    Common stock, par value                         8          8          7 
    Additional paid-in capital                  6,928      6,905      6,894 
    Treasury stock, at cost                      (118)      (114)      (112)
  Accumulated deficit                          (6,282)    (6,299)    (6,243)
  Accumulated other comprehensive income                                    
   (loss)                                          (1)         1         (2)
                                                                            
                                            ---------  ---------  --------- 
                                                                            
      Total stockholders' equity                  535        501        544 
                                                                            
                                            ---------  ---------  --------- 
                                                                            
Total Liabilities and Stockholders' Equity  $   4,325  $   4,246  $   4,337 
                                            =========  =========  ========= 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                     Three Months Ended   Nine Months Ended 
                                     ------------------  ------------------ 
                                          Sep. 27,            Sep. 27,      
                                            2014                2014        
                                                                            
                                     ------------------  ------------------ 
                                                                            
Cash flows from operating                                                   
 activities:                                                                
  Net Income (loss)                  $               17  $              (39)
  Adjustments to reconcile net                                              
   income (loss) to net cash                                                
   provided by (used in) operating                                          
   activities:                                                              
    Depreciation and amortization                    49                 155 
    Employee stock-based                                                    
     compensation expense                            21                  65 
    Non-cash interest expense                         2                  11 
    Loss on debt redemptions                          -                  64 
    Other                                            (6)                 (9)
  Changes in operating assets and                                           
   liabilities:                                                             
    Accounts receivable                            (104)               (144)
    Inventories                                      62                 (14)
    Prepaid expenses and other                                              
     assets                                         (71)               (156)
    Payable to GLOBALFOUNDRIES                       22                 (47)
    Accounts payable, accrued                                               
     liabilities and other                           26                (100)
                                     ------------------  ------------------ 
Net cash provided by (used in)                                              
 operating activities                $               18  $             (214)
                                     ------------------  ------------------ 
                                                                            
Cash flows from investing                                                   
 activities:                                                                
  Purchases of property, plant and                                          
   equipment                                        (29)                (73)
  Purchases of available-for-sale                                           
   securities                                       (28)               (646)
  Proceeds from sale and maturity of                                        
   available-for-sale securities                    176                 664 
                                     ------------------  ------------------ 
Net cash provided by (used in)                                              
 investing activities                $              119  $              (55)
                                     ------------------  ------------------ 
                                                                            
Cash flows from financing                                                   
 activities:                                                                
  Net proceeds from foreign grants                                          
   and allowances                    $                3  $                5 
  Proceeds from issuance of common                                          
   stock                                              2                   4 
  Proceeds from borrowings, net                       -               1,080 
  Repayments of long-term debt and                                          
   capital lease obligations                         (1)             (1,043)
  Other                                              (4)                 (6)
                                     ------------------  ------------------ 
Net cash provided by financing                                              
 activities                          $                -  $               40 
                                     ------------------  ------------------ 
Net increase (decrease) in cash and                                         
 cash equivalents                                   137                (229)
                                     ------------------  ------------------ 
Cash and cash equivalents at                                                
 beginning of period                 $              503  $              869 
                                     ------------------  ------------------ 
Cash and cash equivalents at end of                                         
 period                              $              640  $              640 
                                     ------------------  ------------------ 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                                                                            
                            Three Months Ended            Nine Months Ended 
----------------------------------------------------     -------------------
                       Sep. 27,  Jun. 28,  Sep. 28,      Sep. 27,  Sep. 28, 
Segment and Category                                                        
 Information             2014      2014      2013          2014      2013   
                                                                            
----------------------------------------------------     -------------------
                                                                            
  Computing and                                                             
   Graphics (1)                                                             
    Net revenue        $    781  $    828  $    925      $  2,470  $  2,832 
    Operating income                                                        
     (loss)            $    (17) $     (6) $      9      $    (20) $    (86)
                                                                            
  Enterprise, Embedded                                                      
   and Semi-Custom (2)                                                      
    Net revenue             648       613       536         1,797       878 
    Operating income        108        97        92           290       166 
                                                                            
  All Other (3)                                                             
    Operating loss          (28)      (28)       (6)          (95)     (112)
                                                                            
  Total                                                                     
    Net revenue        $  1,429  $  1,441  $  1,461      $  4,267  $  3,710 
    Operating income                                                        
     (loss)            $     63  $     63  $     95      $    175  $    (32)
                                                                            
----------------------------------------------------     -------------------
                                                                            
Other Data                                                                  
                                                                            
  Depreciation and                                                          
   amortization,                                                            
   excluding                                                                
   amortization of                                                          
   acquired intangible                                                      
   assets              $     46  $     49  $     52      $    145  $    168 
  Capital additions    $     29  $     23  $     15      $     73  $     63 
  Adjusted EBITDA (4)  $    133  $    137  $    153      $    409  $    247 
  Cash, cash                                                                
   equivalents and                                                          
   marketable                                                               
   securities,                                                              
   including long-term                                                      
   marketable                                                               
   securities          $    938  $    948  $  1,181      $    938  $  1,181 
  Non-GAAP free cash                                                        
   flow (5)            $    (11) $    (51) $      6      $   (287) $   (232)
  Total assets         $  4,325  $  4,246  $  4,317      $  4,325  $  4,317 
  Total debt           $  2,208  $  2,210  $  2,049      $  2,208  $  2,049 
  Headcount              10,149    10,300    10,330        10,149    10,330 
                                                                            
----------------------------------------------------     -------------------
                                                                            
                                                                            
(1)  Computing and Graphics segment primarily includes desktop and notebook 
      processors and chipsets, discrete graphics processing units (GPUs) and
      professional graphics.                                                
                                                                            
(2)  Enterprise, Embedded and Semi-Custom segment primarily includes server 
      and embedded processors, dense servers, semi-custom System-on-Chip    
      (SoC) products, engineering services and royalties.                   
                                                                            
(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 nine months ended September 27, 2014, the Company included an     
      adjustment for workforce rebalancing severance charges; and for the   
      third quarter of 2013 and nine months ended September 28, 2013, the   
      Company included an adjustment for net restructuring and other special
      charges (gains.)                                                      
                                                                            
(4)  Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*     
                                    Three Months Ended     Nine Months Ended
                               --------------------------- -----------------
                               Sep. 27,  Jun. 28, Sep. 28, Sep. 27, Sep. 28,
                                 2014      2014     2013     2014     2013  
                               --------  -------- -------- -------- --------
     GAAP operating income                                                  
      (loss)                   $     63  $     63 $     95 $    175 $   (32)
       Workforce rebalancing                                                
        severance charges             -         -        -       14        -
       Depreciation and                                                     
        amortization                 46        49       52      145      168
       Employee stock-based                                                 
        compensation expense         21        21       23       65       67
       Amortization of acquired                                             
        intangible assets             3         4        5       10       14
       Restructuring and other                                              
        special charges                                                     
        (gains), net                  -         -      (22)       -       30
                               --------  -------- -------- -------- --------
     Adjusted EBITDA           $    133  $    137 $    153 $    409 $    247
                               ========  ======== ======== ======== ========
                                                                            
                                                                            
(5)  Non-GAAP free cash flow reconciliation**                               
                                    Three Months Ended     Nine Months Ended
                               --------------------------- -----------------
                               Sep. 27,  Jun. 28, Sep. 28, Sep. 27, Sep. 28,
                                 2014      2014     2013     2014     2013  
                               --------  -------- -------- -------- --------
     GAAP net cash provided by                                              
      (used in) operating                                                   
      activities               $     18  $   (28) $     21 $  (214) $  (169)
       Purchases of property,                                               
        plant and equipment         (29)     (23)     (15)     (73)     (63)
                               --------  -------- -------- -------- --------
     Non-GAAP free cash flow   $    (11) $   (51) $      6 $  (287) $  (232)
                               ========  ======== ======== ======== ========
                                                                            
                                                                            
     * 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 nine months ended       
     September 27, 2014, the Company included an adjustment for workforce   
     rebalancing severance charges; and for the third quarter of 2013 and   
     nine months ended September 28, 2013, the Company included an          
     adjustment for net restructuring and other special charges (gains). 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