AMD (
Cautionary Statement
This document contains forward-looking statements concerning AMD, its fourth quarter of 2013 revenue, AMD's ability to generate approximately 50 percent of its business from high-growth markets over the next two years and AMD's ability to diversify its product portfolio; which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corp.'s pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact the Company's plans, that the Company will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying the Company's products or materially reduce their operations or demand for the Company's products; that the Company may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that the Company's third party foundry suppliers will be unable to transition the Company's products to advanced manufacturing process technologies in a timely and effective way or to manufacture the Company's products on a timely basis in sufficient quantities and using competitive process technologies; that the Company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GLOBALFOUNDRIES (GF) microprocessor manufacturing facilities; that the Company's requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that the Company is unable to successfully implement its long-term business strategy; that the Company inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that the Company is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of the Company's products; that the Company may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for the Company's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions, including PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on the Company's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended June 29, 2013.
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.
(1) In this press release, in addition to GAAP financial results, the
company has provided non-GAAP financial measures including non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP
earnings (loss) per share. These non-GAAP financial measures reflect
certain adjustments as presented in the tables in this press release.
The company also provided Adjusted EBITDA and non-GAAP free cash flow
as supplemental measures of its performance. These items are defined
in the footnotes to the selected corporate data tables provided at the
end of this press release. The company is providing these financial
measures because it believes this non-GAAP presentation makes it
easier for investors to compare its operating results for current and
historical periods and also because the Company believes it assists
investors in comparing the company's performance across reporting
periods on a consistent basis by excluding items that it does not
believe are indicative of its core operating performance and for the
other reasons described in the footnotes to the selected data tables.
Refer to corresponding tables at the end of this press release for
additional AMD data.
(2) Application support for Mantle is required.
(3) AMD TrueAudio technology is offered with select AMD Radeon™ R9 and R7
200 Series GPUs and is designed to improve acoustic realism. Requires
enabled game or application. Not all audio equipment supports all
audio effects; additional audio equipment may be required for some
audio effects. Not all products feature all technologies -- check with
your component or system manufacturer for specific capabilities.
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended Nine Months Ended
---------------------------- ------------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2013 2013 2012 2013 2012
-------- -------- -------- -------- --------
Net revenue $ 1,461 $ 1,161 $ 1,269 $ 3,710 $ 4,267
Cost of sales 940 702 877 2,285 3,210
-------- -------- -------- -------- -------
Gross margin 521 459 392 1,425 1,057
Gross margin % 36% 40% 31% 38% 25%
Research and development 288 308 328 908 1,041
Marketing, general and
administrative 155 171 188 505 630
Amortization of acquired
intangible assets 5 4 4 14 9
Restructuring and other
special charges (gains),
net (22) 5 3 30 11
-------- -------- -------- -------- --------
Operating income (loss) 95 (29) (131) (32) (634)
Interest income 1 2 2 4 6
Interest expense (47) (42) (44) (133) (130)
Other income (expense),
net 2 (2) 16 (3) 10
-------- -------- -------- -------- --------
Income (loss) before
income taxes 51 (71) (157) (164) (748)
Provision (benefit) for
income taxes 3 3 - 8 (38)
-------- -------- -------- -------- --------
Net income (loss) $ 48 $ (74) $ (157) $ (172) $ (710)
Net income (loss) per
share
Basic $ 0.06 $ (0.10) $ (0.21) $ (0.23) $ (0.96)
Diluted $ 0.06 $ (0.10) $ (0.21) $ (0.23) $ (0.96)
-------- -------- -------- -------- --------
Shares used in per share
calculation
Basic 757 752 745 753 739
Diluted 764 752 745 753 739
-------- -------- -------- -------- --------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Millions)
Quarter Ended Nine Months Ended
---------------------------- ------------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2013 2013 2012 2013 2012
-------- -------- -------- -------- --------
Total comprehensive income
(loss) $ 52 $ (76) $ (154) $ (171) $ (706)
-------- -------- -------- -------- --------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)
---------- ---------- ----------
Sep. 28, Jun. 29, Dec. 29,
2013 2013 2012
---------- ---------- ----------
Assets
Current assets:
Cash, cash equivalents and marketable
securities $ 1,060 $ 968 $ 1,002
Accounts receivable, net 873 670 630
Inventories, net 922 711 562
Prepaid expenses and other current
assets 84 109 71
---------- ---------- ----------
Total current assets 2,939 2,458 2,265
Long-term marketable securities 121 149 181
Property, plant and equipment, net 358 402 658
Acquisition related intangible assets,
net 82 87 96
Goodwill 553 553 553
Other assets 264 248 247
---------- ---------- ----------
Total Assets $ 4,317 $ 3,897 $ 4,000
========== ========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 574 $ 402 $ 278
Payable to GLOBALFOUNDRIES 495 414 454
Accrued liabilities 528 475 489
Deferred income on shipments to
distributors 139 129 108
Current portion of long-term debt and
capital lease obligations 5 5 5
Other current liabilities 21 26 63
---------- ---------- ----------
Total current liabilities 1,762 1,451 1,397
Long-term debt and capital lease
obligations, less current portion 2,044 2,042 2,037
Other long-term liabilities 77 45 28
Stockholders' equity:
Capital stock:
Common stock, par value 7 7 7
Additional paid-in capital 6,872 6,848 6,803
Treasury stock, at cost (111) (110) (109)
Accumulated deficit (6,332) (6,380) (6,160)
Accumulated other comprehensive loss (2) (6) (3)
---------- ---------- ----------
Total stockholders' equity 434 359 538
---------- ---------- ----------
Total Liabilities and Stockholders'
Equity $ 4,317 $ 3,897 $ 4,000
========== ========== ==========
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Quarter Nine Months
Ended Ended
------------ ------------
Sep. 28, Sep. 28,
2013 2013
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 48 $ (172)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 57 182
Net (gain) loss on disposal of property,
plant and equipment (17) 30
Benefit for deferred income taxes (1) -
Employee stock-based compensation expense 23 67
Non-cash interest expense 6 18
Other - 1
Changes in operating assets and liabilities:
Accounts receivable (203) (242)
Inventories (211) (360)
Prepaid expenses and other current assets 24 (18)
Other assets (34) (67)
Payable to GLOBALFOUNDRIES 81 41
Accounts payable, accrued liabilities and
other 248 351
------------ ------------
Net cash provided by (used in) operating
activities $ 21 $ (169)
------------ ------------
Cash flows from investing activities:
Purchases of property, plant and equipment (15) (63)
Proceeds from sale of property, plant and
equipment 57 238
Purchases of available-for-sale securities (232) (985)
Proceeds from sale and maturity of available-
for-sale securities 376 969
------------ ------------
Net cash provided by investing activities $ 186 $ 159
------------ ------------
Cash flows from financing activities:
Net proceeds from foreign grants and
allowances 4 6
Proceeds from issuance of common stock 1 3
Repayments of debt and capital lease
obligations (2) (4)
Other (1) (1)
------------ ------------
Net cash provided by financing activities $ 2 $ 4
------------ ------------
Net increase (decrease) in cash and cash
equivalents 209 (6)
------------ ------------
Cash and cash equivalents at beginning of period $ 334 $ 549
------------ ------------
Cash and cash equivalents at end of period $ 543 $ 543
------------ ------------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Quarter Ended Nine Months Ended
-------------------------------------------------------- -------------------
Segment and Category Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
Information 2013 2013 2012 2013 2012
-------------------------------------------------------- -------------------
Computing Solutions (1)
Net revenue $ 790 $ 841 $ 927 $ 2,382 $ 3,176
Operating income
(loss) $ 22 $ 2 $ (114) $ (15) $ 92
Graphics and Visual
Solutions (2)
Net revenue 671 320 342 1,328 1,091
Operating income 79 - 18 95 83
All Other (3)
Operating loss (6) (31) (35) (112) (809)
Total
Net revenue $ 1,461 $ 1,161 $ 1,269 $ 3,710 $ 4,267
Operating income
(loss) $ 95 $ (29) $ (131) $ (32) $ (634)
-------------------------------------------------------- -------------------
Other Data
Depreciation and
amortization, excluding
amortization of
acquired intangible
assets $ 52 $ 54 $ 62 $ 168 $ 185
Capital additions $ 15 $ 28 $ 32 $ 63 $ 111
Adjusted EBITDA (4) $ 153 $ 54 $ (35) $ 247 $ 359
Cash, cash equivalents
and marketable
securities, including
long-term marketable
securities $ 1,181 $ 1,117 $ 1,480 $ 1,181 $ 1,480
Non-GAAP free cash flow
(5) $ 6 $ (63) $ (272) $ (232) $ (163)
Total assets $ 4,317 $ 3,897 $ 4,612 $ 4,317 $ 4,612
Long-term debt and
capital lease
obligations, including
current portion $ 2,049 $ 2,047 $ 2,040 $ 2,049 $ 2,040
Headcount 10,330 9,928 11,813 10,330 11,813
-------------------------------------------------------- -------------------
(1) Computing Solutions segment includes x86 microprocessors, as standalone
devices or as incorporated as an accelerated processing unit (APU),
chipsets, embedded processors and dense servers.
(2) Graphics and Visual Solutions segment includes graphics processing units
(GPU), including professional graphics, semi-custom products and
technology for game consoles.
(3) All Other category includes certain expenses and credits that are not
allocated to any of the operating segments. Also included in this
category are amortization of acquired intangible assets, employee
stock-based compensation expense, net restructuring and other special
charges and a charge related to the limited waiver of exclusivity from
GLOBALFOUNDRIES ("GF").
(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
Quarter Ended Nine Months Ended
---------------------------- ------------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2013 2013 2012 2013 2012
-------- -------- -------- -------- --------
GAAP operating income
(loss) $ 95 $ (29) $ (131) $ (32) (634)
Depreciation and
amortization 52 54 62 168 185
Employee stock-based
compensation
expense 23 20 27 67 74
Amortization of
acquired intangible
assets 5 4 4 14 9
Restructuring and
other special
charges (gains),
net (22) 5 3 30 11
-------- -------- -------- -------- --------
Adjusted EBITDA $ 153 $ 54 $ (35) $ 247 $ 359
======== ======== ======== ======== ========
(5) Non-GAAP free cash flow reconciliation**
Quarter Ended Nine Months Ended
---------------------------- ------------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2013 2013 2012 2013 2012
-------- -------- -------- -------- --------
GAAP net cash provided
by (used in)
operating activities $ 21 $ (35) $ (240) $ (169) $ (52)
Purchases of
property, plant and
equipment (15) (28) (32) (63) (111)
-------- -------- -------- -------- --------
Non-GAAP free cash
flow $ 6 $ (63) $ (272) $ (232) $ (163)
======== ======== ======== ======== ========
* The Company presents Adjusted EBITDA as a supplemental measure of its
performance. Adjusted EBITDA for the Company is determined by adjusting
operating income (loss) for depreciation and amortization, employee stock-
based compensation expense and amortization of acquired intangible assets.
In addition, the Company also included the following adjustments for the
applicable period: for all periods presented, the Company also included an
adjustment for net restructuring and other special charges (gains); and for
nine months ended September 29, 2012, the Company also included adjustments
for the limited waiver of exclusivity from GLOBALFOUNDRIES, legal
settlement with a third party and costs related to the acquisition of
SeaMicro, Inc. The Company calculates and communicates Adjusted EBITDA in
the financial schedules because the Company's management believes it is of
importance to investors and lenders in relation to its overall capital
structure and its ability to borrow additional funds. In addition, the
Company presents Adjusted EBITDA because it believes this measure assists
investors in comparing its performance across reporting periods on a
consistent basis by excluding items that the Company does not believe are
indicative of its core operating performance. The Company's calculation of
Adjusted EBITDA may or may not be consistent with the calculation of this
measure by other companies in the same industry. Investors should not view
Adjusted EBITDA as an alternative to the GAAP operating measure of
operating income (loss) or GAAP liquidity measures of cash flows from
operating, investing and financing activities. In addition, Adjusted EBITDA
does not take into account changes in certain assets and liabilities as
well as interest and income taxes that can affect cash flows.
** The Company also presents non-GAAP free cash flow in the earnings release
as a supplemental measure of its performance. Non-GAAP free cash flow is
determined by adjusting GAAP net cash provided by (used in) operating
activities for capital expenditures. The Company calculates and
communicates non-GAAP free cash flow in the financial schedules because the
Company's management believes it is of importance to investors to
understand the nature of these cash flows. The Company's calculation of
non-GAAP free cash flow may or may not be consistent with the calculation
of this measure by other companies in the same industry. Investors should
not view non-GAAP free cash flow as an alternative to GAAP liquidity
measures of cash flows from operating activities. The Company has provided
reconciliations within the press release and financial schedules of these
non-GAAP financial measures to the most directly comparable GAAP financial
measures.
