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AMD Reports 2015 Third Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Oct 15, 2015 -- AMD (NASDAQ: AMD)

AMD (NASDAQ: AMD) today announced revenue for the third quarter of 2015 of $1.06 billion, operating loss of $158 million, and net loss of $197 million, or $0.25 per share. Non-GAAP(1) operating loss was $97 million and non-GAAP(1) net loss was $136 million, or $0.17 per share. GAAP and non-GAAP results include a $65 million inventory write-down and the impact of this charge to loss per share was $0.08.

                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                       Q3-15           Q2-15         Q3-14  
----------------------------------------------------------------------------
Revenue                                $1.06B          $942M        $1.43B  
----------------------------------------------------------------------------
Operating income (loss)               $(158)M         $(137)M        $63M   
----------------------------------------------------------------------------
Net income (loss) / Earnings                                                
 (Loss) per share                 $(197)M/$(0.25) $(181)M/$(0.23) $17M/$0.02
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
                        Non-GAAP Financial Results(1)                       
                                                                            
----------------------------------------------------------------------------
                                       Q3-15           Q2-15         Q3-14  
----------------------------------------------------------------------------
Revenue                                $1.06B          $942M        $1.43B  
----------------------------------------------------------------------------
Operating income (loss)                $(97)M          $(87)M        $87M   
----------------------------------------------------------------------------
Net income (loss) / Earnings                                                
 (loss) per share                 $(136)M/$(0.17) $(131)M/$(0.17) $41M/$0.05
----------------------------------------------------------------------------
                                                                            
                                                                            

"AMD delivered double-digit percentage sequential revenue growth in both of our segments in the third quarter," said Dr. Lisa Su, AMD president and CEO. "We continue to take targeted actions to improve long-term financial performance, build great products and simplify our business model. The formation of a joint venture of our back-end manufacturing assets is a significant step towards achieving these goals and strengthening our balance sheet."

Q3 2015 Results

Financial Segment Summary

ATMP Manufacturing Facilities Joint Venture
As a part of AMD's ongoing strategic plan to sharpen its focus on designing high-performance technologies and products that drive profitable growth, AMD today announced the signing of a definitive agreement to create a joint venture with Nantong Fujitsu Microelectronics (NFME) that combines AMD's high-volume ATMP facilities and experienced workforce in Penang, Malaysia and Suzhou, China with NFME's established outsourced semiconductor assembly and test (OSAT) expertise to offer differentiated capabilities and scale to service a broad range of customers. The value of the transaction is $436 million and NFME will take an 85 percent ownership of the joint venture. AMD will receive $371 million in cash and expects net proceeds of approximately $320 million, net of taxes and other charges at close. This transaction is expected to close in the first half of 2016, pending successful completion of regulatory approvals.

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 2015, AMD expects revenue to decrease 10 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 2:00 p.m. PDT (5:00 p.m. EDT) 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 website at www.amd.com. The webcast will be available for 12 months after the conference call.

                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Gross Margin                             
                                                                            
                                                 ---------------------------
(Millions except percentages)                      Q3-15    Q2-15    Q3-14  
----------------------------------------------------------------------------
GAAP Gross Margin                                 $   239  $   232  $   494 
----------------------------------------------------------------------------
GAAP Gross Margin %                                    23%      25%      35%
----------------------------------------------------------------------------
  Technology node transition charge                     -       33        - 
----------------------------------------------------------------------------
  Stock-based compensation*                             -        1        1 
----------------------------------------------------------------------------
Non-GAAP Gross Margin                             $   239  $   266  $   495 
----------------------------------------------------------------------------
Non-GAAP Gross Margin %                                23%      28%      35%
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Operating Income (loss)                  
                                                                            
                                                  --------------------------
(Millions)                                          Q3-15    Q2-15    Q3-14 
----------------------------------------------------------------------------
GAAP operating income (loss)                       $  (158) $  (137) $    63
----------------------------------------------------------------------------
  Technology node transition charge                      -       33        -
----------------------------------------------------------------------------
  Restructuring and other special charges, net          48        -        -
----------------------------------------------------------------------------
  Amortization of acquired intangible assets             -        -        3
----------------------------------------------------------------------------
  Stock-based compensation*                             13       17       21
----------------------------------------------------------------------------
Non-GAAP operating income (loss)                   $   (97) $   (87) $    87
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Net Income (Loss)/Earnings (Loss) per    
 Share                                                                      
                                                                            
                              ----------------------------------------------
(Millions except per share                                                  
 amounts)                           Q3-15           Q2-15          Q3-14    
----------------------------------------------------------------------------
GAAP net income (loss)                                                      
 /Earnings (loss) per share    $ (197) $(0.25) $ (181) $(0.23) $   17 $ 0.02
----------------------------------------------------------------------------
  Technology node transition                                                
   charge                           -       -      33    0.04       -      -
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges, net            48    0.06       -       -       -      -
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets                -       -       -       -       3      -
----------------------------------------------------------------------------
  Stock-based compensation*        13    0.02      17    0.02      21   0.03
----------------------------------------------------------------------------
Non-GAAP net income (loss) /                                                
 earnings (loss) per share     $ (136) $(0.17) $ (131) $(0.17) $   41 $ 0.05
----------------------------------------------------------------------------
                                                                            

*Beginning in Q1 2015, AMD started excluding the impact of stock-based compensation from non-GAAP results. Prior periods have been adjusted accordingly.

About AMD
For more than 45 years, AMD has driven innovation in high-performance computing, graphics, and visualization technologies -- the building blocks for gaming, immersive platforms, and the datacenter. Hundreds of millions of consumers, leading Fortune 500 businesses, and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work, and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, Facebook and Twitter pages.

Cautionary Statement
This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. ("AMD" or the "Company") including AMD's ability to improve its long-term financial performance, build great products and simplify its business model; recapture profitable share across traditional graphics market; AMD's ability to stake leadership positions in new markets such as AR and VR; AMD's expected fourth quarter of 2015 revenue statements regarding the proposed joint ventures (the "JVs") between AMD and Nantong Fujitsu Microelectronics, Co., Ltd., including the JVs' expected future performance (including expected results of operations and financial guidance); synergies from the proposed transaction; the JVs' future financial condition, operating results, strategy and plans; statements about regulatory and other approvals; the closing date for the proposed transaction; financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this document are based on current beliefs, assumptions and expectations, speak only as of the date of this document and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD's control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation's dominance of the microprocessor market and its aggressive business practices may limit AMD's ability to compete effectively; AMD relies on GF to manufacture most of its microprocessor and APU products and certain of its GPU and semi-custom products. If GF is not able to satisfy AMD's manufacturing requirements, its business could be adversely impacted; AMD relies on third parties to manufacture its products, and if they are unable to do so on a timely basis in sufficient quantities and using competitive technologies, AMD's business could be materially adversely affected; failure to achieve expected manufacturing yields for AMD's products could negatively impact its financial results; the success of AMD's business is dependent upon its ability to introduce products on a timely basis with features and performance levels that provide value to its customers while supporting and coinciding with significant industry transitions; if AMD cannot generate sufficient revenue and operating cash flow or obtain external financing, it may face a cash shortfall and be unable to make all of its planned investments in research and development or other strategic investments; AMD may not be able to successfully implement its business strategy to refocus its business to address markets beyond its core PC market to high-growth adjacent markets; the loss of a significant customer may have a material adverse effect on us; global economic uncertainty may adversely impact AMD's business and operating results; AMD may not be able to generate sufficient cash to service its debt obligations or meet its working capital requirements; AMD has a substantial amount of indebtedness which could adversely affect its financial position and prevent it from implementing its strategy or fulfilling its contractual obligations; the agreements governing AMD's notes and its Secured Revolving Line of Credit for a principal amount up to $500 million (Secured Revolving Line of Credit) impose restrictions on AMD that may adversely affect its ability to operate its business; the markets in which AMD's products are sold are highly competitive; uncertainties involving the ordering and shipment of AMD's products could materially adversely affect it; the completion and impact of the 2015 Restructuring Plan, its transformation initiatives and any future restructuring actions could adversely affect it; AMD's receipt of revenue from its semi-custom SoC products is dependent upon its technology being designed into third-party products and the success of those products; the demand for AMD's products depends in part on the market conditions in the industries into which they are sold. Fluctuations in demand for AMD's products or a market decline in any of these industries could have a material adverse effect on its results of operations; AMD's ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property; AMD depends on third-party companies for the design, manufacture and supply of motherboards and other computer platform components to support its business; if AMD loses Microsoft Corporations support for its products or other software vendors do not design and develop software to run on AMD's products, its ability to sell its products could be materially adversely affected; AMD may incur future impairments of goodwill; AMD's reliance on third-party distributors and AIB partners subjects it to certain risks; AMD's inability to continue to attract and retain qualified personnel may hinder its product development programs; in the event of a change of control, AMD may not be able to repurchase its outstanding debt as required by the applicable indentures and its Secured Revolving Line of Credit, which would result in a default under the indentures and its Secured Revolving Line of Credit; the semiconductor industry is highly cyclical and has experienced severe downturns that have materially adversely affected, and may continue to materially adversely affect, its business in the future; AMD's business is dependent upon the proper functioning of its internal business processes and information systems and modification or interruption of such systems may disrupt its business, processes and internal controls; data breaches and cyber-attacks could compromise AMD's intellectual property or other confidential, sensitive information and cause significant damage to its business, competitive position and reputation while subjecting it to potential litigation; AMD's operating results are subject to quarterly and seasonal sales patterns; if essential equipment or materials are not available to manufacture its products, AMD could be materially adversely affected; if AMD's products are not compatible with some or all industry-standard software and hardware, it could be materially adversely affected; costs related to defective products could have a material adverse effect on AMD; if AMD fails to maintain the efficiency of its supply chain as it responds to changes in customer demand for its products, its business could be materially adversely affected; AMD outsources to third parties certain supply-chain logistics functions, including portions of its product distribution, transportation management and information technology support services; acquisitions could disrupt its business, harm its financial condition and operating results or dilute, or adversely affect the price of its common stock; AMD's worldwide operations are subject to political, legal and economic risks and natural disasters, which could have a material adverse effect on it; worldwide political conditions may adversely affect demand for AMD's products; unfavorable currency exchange rate fluctuations could adversely affect AMD; AMD's inability to effectively control the sales of its products on the gray market could have a material adverse effect on it; if AMD cannot adequately protect its technology or other intellectual property in the United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures, it may lose a competitive advantage and incur significant expenses; AMD is a party to litigation and may become a party to other claims or litigation that could cause it to incur substantial costs or pay substantial damages or prohibit it from selling its products; AMD's business is subject to potential tax liabilities; a variety of environmental laws including conflict mineral rules that AMD is subject to could result in additional costs and liabilities; and higher health care costs and labor costs could adversely affect AMD's business. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to AMD's Quarterly Report on Form 10-Q for the quarter ended June 27, 2015.

AMD, the AMD Arrow logo, Catalyst, FirePro, Radeon, and combinations thereof, are trademarks of Advanced Micro Devices, Inc. ARM is a registered trademark of ARM Limited in the EU and other countries. DirectX, Microsoft and Windows are registered trademarks of Microsoft Corporation in the US and other jurisdictions. 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 gross    
   margin, non-GAAP operating income (loss), non-GAAP operating expenses,   
   non-GAAP research and development and marketing, general and             
   administrative expenses, 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 CFO     
   Commentary.                                                              
                                                                            
2. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results.     
   3DMark FireStrike at 3840x2180, Ultra preset, 0xMSAA, 0XAF is used to    
   simulate GPU performance; the Radeon™ R9 Nano on the system using the    
   Intel® Core™ i7-5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz       
   memory, Windows 10 64-bit, and AMD Catalyst Driver 15.201 scored 3411    
   while the Sapphire Radeon™ R9 380 Mini ITX on the same system and AMD    
   Catalyst Driver 15.20 scored 1551, the GTX 970 Mini ITX on the same      
   system and GeForce Driver 355.60 WHQL scored 2593, the GTX 960 Mini ITX  
   on the same system and GeForce Driver scored 1297. GRDT-73               
                                                                            
3. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results. Far 
   Cry 4 at 3840x2180, Ultra High preset, SMAA, 0XAF is used to simulate GPU
   performance; the Radeon™ R9 Nano on the system using the Intel® Core™ i7-
   5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz memory, Windows 10 64-
   bit, and AMD Catalyst Driver 15.201 scored 37.966 fps while the Radeon™  
   R9 290X on the same system and AMD Catalyst Driver 15.20 scored 27.207   
   fps GRDT-69                                                              
                                                                            
4. Testing conducted by AMD Engineering on optimized AMD reference systems. 
   PC manufacturers may vary configurations yielding different results. Far 
   Cry 4 at 3840x2180, Ultra High preset, SMAA, 0XAF is used to simulate GPU
   performance; the Radeon™ R9 Nano on the system using the Intel® Core™ i7-
   5960X 3.0GHz processor, 16GB (4x4GB) DDR4 2666 MHz memory, Windows 10 64-
   bit, and AMD Catalyst Driver 15.201 scored 37.966 fps while the Radeon™  
   R9 290X on the same system and AMD Catalyst Driver 15.20 scored 27.207   
   fps GRDT-69                                                              
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                             Three Months Ended          Nine Months Ended  
                       ------------------------------  -------------------- 
                       September  June 27,  September  September  September 
                        26, 2015    2015     27, 2014   26, 2015   27, 2014 
                       ---------  --------  ---------  ---------  --------- 
Net revenue            $   1,061  $    942  $   1,429  $   3,033  $   4,267 
Cost of sales                822       710        935      2,236      2,788 
                       ---------  --------  ---------  ---------  --------- 
Gross margin                 239       232        494        797      1,479 
Gross margin %                23%       25%        35%        26%        35%
Research and                                                                
 development                 241       235        278        718        834 
Marketing, general and                                                      
 administrative              108       134        150        373        460 
Amortization of                                                             
 acquired intangible                                                        
 assets                        -         -          3          3         10 
Restructuring and other                                                     
 special charges, net         48         -          -        135          - 
                       ---------  --------  ---------  ---------  --------- 
Operating income (loss)     (158)     (137)        63       (432)       175 
Interest expense             (39)      (40)       (43)      (119)      (136)
Other expense, net             -        (3)        (1)        (3)       (70)
                       ---------  --------  ---------  ---------  --------- 
Income (loss) before                                                        
 income taxes               (197)     (180)        19       (554)       (31)
Provision for income                                                        
 taxes                         -         1          2          4          8 
                       ---------  --------  ---------  ---------  --------- 
Net income (loss)      $    (197) $   (181) $      17  $    (558) $     (39)
Net income (loss) per                                                       
 share                                                                      
  Basic                $   (0.25) $  (0.23) $    0.02  $   (0.72) $   (0.05)
  Diluted              $   (0.25) $  (0.23) $    0.02  $   (0.72) $   (0.05)
                       ---------  --------  ---------  ---------  --------- 
Shares used in per                                                          
 share calculation                                                          
  Basic                      785       778        770        780        765 
  Diluted                    785       778        785        780        765 
                       ---------  --------  ---------  ---------  --------- 
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                             Three Months Ended          Nine Months Ended  
                       ------------------------------  -------------------- 
                       September  June 27,  September  September  September 
                        26, 2015    2015     27, 2014   26, 2015   27, 2014 
                       ---------  --------  ---------  ---------  --------- 
Total comprehensive                                                         
 income (loss)         $    (207) $   (174) $      15  $    (568) $     (38)
                       ---------  --------  ---------  ---------  --------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS                                       
(Millions)                                                                  
                                                                            
                                  ----------------------------------------- 
                                  September 26,    June 27,    December 27, 
                                       2015          2015          2014     
                                  ------------- ------------- ------------- 
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents       $         755 $         829 $         805 
  Marketable securities                       -             -           235 
  Accounts receivable, net                  648           687           818 
  Inventories, net                          761           799           685 
  Prepayments to GLOBALFOUNDRIES             20            19           113 
  Prepaid expenses                           63            54            32 
  Other current assets                      182            63            48 
                                                                            
                                  ------------- ------------- ------------- 
    Total current assets                  2,429         2,451         2,736 
Property, plant and equipment, net          194           289           302 
Acquisition related intangible                                              
 assets, net                                  -             -            65 
Goodwill                                    320           320           320 
Other assets                                286           321           344 
                                  ------------- ------------- ------------- 
Total Assets                      $       3,229 $       3,381 $       3,767 
                                  ============= ============= ============= 
                                                                            
Liabilities and Stockholders'                                               
 Equity (Deficit)                                                           
Current liabilities:                                                        
  Short-term debt                 $         230 $         235 $         177 
  Accounts payable                          388           454           415 
  Payable to GLOBALFOUNDRIES                226           197           218 
  Accrued liabilities                       408           432           518 
  Other current liabilities                 137            30            40 
  Deferred income on shipments to                                           
   distributors                              60            51            72 
                                                                            
                                  ------------- ------------- ------------- 
    Total current liabilities             1,449         1,399         1,440 
Long-term debt                            2,030         2,034         2,035 
Other long-term liabilities                  86            89           105 
                                                                            
Stockholders' equity (deficit):                                             
  Capital stock:                                                            
    Common stock, par value                   8             8             8 
    Additional paid-in capital            6,997         6,984         6,949 
    Treasury stock, at cost                (122)         (121)         (119)
  Accumulated deficit                    (7,204)       (7,007)       (6,646)
  Accumulated other comprehensive                                           
   loss                                     (15)           (5)           (5)
                                                                            
                                  ------------- ------------- ------------- 
    Total Stockholders' equity                                              
     (deficit)                             (336)         (141)          187 
                                  ------------- ------------- ------------- 
Total Liabilities and                                                       
 Stockholders' Equity (Deficit)   $       3,229 $       3,381 $       3,767 
                                  ============= ============= ============= 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                                                            
                                                Three Months   Nine Months  
                                                   Ended          Ended     
                                               -------------  ------------- 
                                               September 26,  September 26, 
                                                    2015           2015     
                                               -------------  ------------- 
                                                                            
Cash flows from operating activities:                                       
  Net Loss                                     $        (197) $        (558)
  Adjustments to reconcile net loss to net                                  
   cash used in operating activities:                                       
    Depreciation and amortization                         42            133 
    Stock-based compensation expense                      13             47 
    Non-cash interest expense                              2              8 
    Restructuring and other special charges,                                
     net                                                  11             83 
    Other                                                  6              7 
  Changes in operating assets and liabilities:                              
    Accounts receivable                                   35            164 
    Inventories                                           24            (93)
    Prepayments to GLOBALFOUNDRIES                         3             97 
    Prepaid expenses and other assets                    (40)          (113)
    Accounts payable, accrued liabilities and                               
     other                                                12            (74)
    Payable to GLOBALFOUNDRIES                            30              9 
                                               -------------  ------------- 
Net cash used in operating activities          $         (59) $        (290)
                                               -------------  ------------- 
                                                                            
Cash flows from investing activities:                                       
  Purchases of available-for-sale securities               -           (227)
  Purchases of property, plant and equipment             (25)           (64)
  Proceeds from maturities of available-for-                                
   sale securities                                         -            462 
  Proceeds from sale of property, plant and                                 
   equipment                                               8              8 
                                               -------------  ------------- 
Net cash provided by (used in) investing                                    
 activities                                    $         (17) $         179 
                                               -------------  ------------- 
                                                                            
Cash flows from financing activities:                                       
  Net proceeds from grants                                 4              8 
  Proceeds from issuance of common stock                   -              1 
  Proceeds from borrowings, net                            -            100 
  Repayments of long-term debt and capital                                  
   lease obligations                                       -            (44)
  Other                                                   (2)            (4)
                                               -------------  ------------- 
Net cash provided by financing activities      $           2  $          61 
                                               -------------  ------------- 
Net decrease in cash and cash equivalents                (74)           (50)
                                               -------------  ------------- 
Cash and cash equivalents at beginning of                                   
 period                                        $         829  $         805 
                                               -------------  ------------- 
Cash and cash equivalents at end of period     $         755  $         755 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                             Three Months Ended          Nine Months Ended  
                       ------------------------------  -------------------- 
Segment and Category   September  June 27,  September  September  September 
 Information            26, 2015    2015     27, 2014   26, 2015   27, 2014 
                       ---------  --------  ---------  ---------  --------- 
                                                                            
  Computing and                                                             
   Graphics (1)                                                             
    Net revenue        $     424  $    379  $     781  $   1,335  $   2,470 
    Operating loss     $    (181) $   (147) $     (17) $    (403) $     (20)
                                                                            
  Enterprise, Embedded                                                      
   and Semi-Custom (2)                                                      
    Net revenue        $     637  $    563        648  $   1,698  $   1,797 
    Operating income   $      84  $     27  $     108  $     156  $     290 
                                                                            
  All Other (3)                                                             
    Net revenue                -         -          -          -          - 
    Operating loss     $     (61) $    (17)       (28) $    (185)       (95)
                                                                            
  Total                                                                     
    Net revenue        $   1,061  $    942  $   1,429  $   3,033  $   4,267 
    Operating income                                                        
     (loss)            $    (158) $   (137) $      63  $    (432) $     175 
                                                                            
                       ---------  --------  ---------  ---------  --------- 
                                                                            
Other Data                                                                  
                                                                            
  Depreciation and                                                          
   amortization,                                                            
   excluding                                                                
   amortization of                                                          
   acquired intangible                                                      
   assets              $      42  $     45  $      46  $     130  $     145 
  Capital additions    $      25  $     17  $      29  $      64  $      73 
  Adjusted EBITDA (4)  $     (55) $    (42) $     133  $     (84) $     409 
  Cash, cash                                                                
   equivalents and                                                          
   marketable                                                               
   securities          $     755  $    829  $     938  $     755  $     938 
  Non-GAAP free cash                                                        
   flow (5)            $     (84) $    (75) $     (11) $    (354) $    (287)
  Total assets         $   3,229  $  3,381  $   4,325  $   3,229  $   4,325 
  Total debt           $   2,260  $  2,269  $   2,208  $   2,260  $   2,208 
  Headcount                9,475     9,469     10,149      9,475     10,149 
                       ---------  --------  ---------  ---------  --------- 
                                                                            
(1) Computing and Graphics segment primarily includes desktop and notebook  
    processors, chipsets, discrete graphics processing units (GPUs) and     
    professional graphics.                                                  
                                                                            
(2) Enterprise, Embedded and Semi-Custom segment primarily includes server  
    and embedded processors, 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 stock- 
    based compensation expense. In addition, the Company also included the  
    following adjustments for the indicated periods: for the third quarter  
    of 2015 and nine months ended September 26, 2015, the Company included  
    net restructuring and other special charges; and for the nine months    
    ended September 27, 2014, the Company included an adjustment for        
    workforce rebalancing severance charges.                                
                                                                            
(4) Reconciliation of GAAP Operating Income (Loss) to Adjusted EBITDA*      
                                                                            
                             Three Months Ended          Nine Months Ended  
                       ------------------------------  -------------------- 
                       September  June 27,  September  September  September 
                        26, 2015    2015     27, 2014   26, 2015   27, 2014 
                       ---------  --------  ---------  ---------  --------- 
    GAAP operating                                                          
     income (loss)     $    (158) $   (137) $      63  $    (432) $     175 
    Restructuring and                                                       
     other special                                                          
     charges, net             48         -          -        135          - 
    Technology node                                                         
     transition charge         -        33          -         33          - 
    Stock-based                                                             
     compensation                                                           
     expense                  13        17         21         47         65 
    Amortization of                                                         
     acquired                                                               
     intangible assets         -         -          3          3         10 
    Depreciation and                                                        
     amortization             42        45         46        130        145 
    Workforce                                                               
     rebalancing                                                            
     severance charges         -         -          -          -         14 
                       ---------  --------  ---------  ---------  --------- 
    Adjusted EBITDA    $     (55) $    (42) $     133  $     (84) $     409 
                       =========  ========  =========  =========  ========= 
                                                                            
(5) Non-GAAP free cash flow reconciliation**                                
                                                                            
                             Three Months Ended          Nine Months Ended  
                       ------------------------------  -------------------- 
                       September    June    September  September  September 
                        26, 2015   27,2015   27, 2014   26, 2015   27, 2014 
                       ---------  --------  ---------  ---------  --------- 
    GAAP net cash                                                           
     provided by (used                                                      
     in) operating                                                          
     activities        $     (59) $    (58) $      18  $    (290) $    (214)
    Purchases of                                                            
     property, plant                                                        
     and equipment           (25)      (17)       (29)       (64)       (73)
                       ---------  --------  ---------  ---------  --------- 
    Non-GAAP free cash                                                      
     flow              $     (84) $    (75) $     (11) $    (354) $    (287)
                       =========  ========  =========  =========  ========= 
                                                                            
                                                                            
*   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, stock-based  
    compensation expense and amortization of acquired intangible assets. In 
    addition, the Company also excluded the following adjustments for the   
    indicated periods: for the third quarter of 2015 and nine months ended  
    September 26, 2015, the Company excluded restructuring and other        
    special charges, net, for the second quarter of 2015 and nine months    
    ended September 26, 2015, the Company excluded a technology node        
    transition charge, and for the nine months ended September 27, 2014,    
    the Company excluded an adjustment for workforce rebalancing severance  
    charges. The Company calculates and communicates Adjusted EBITDA        
    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 as a supplemental     
    measure of its performance. Non-GAAP free cash flow is determined by    
    adjusting GAAP net cash provided by (used in) operating activities for  
    capital expenditures. The Company calculates and communicates non-GAAP  
    free cash flow in the financial 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.                                                

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