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AMD Reports 2014 Second Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Jul 17, 2014 -- AMD (NYSE: AMD)

Q2 2014 Results

AMD (NYSE: AMD) today announced revenue for the second quarter of 2014 of $1.44 billion, operating income of $63 million and net loss of $36 million, or $0.05 per share. Non-GAAP operating income was $67 million and non-GAAP net income, which primarily excludes $49 million of loss from debt redemption in the quarter, was $17 million, or $0.02 per share.

"The second quarter capped off a solid first half of the year for AMD with strong revenue growth and improved financial performance," said Rory Read, AMD president and CEO. "Our transformation strategy is on track and we expect to deliver full year non-GAAP profitability and year-over-year revenue growth. We continue to strengthen our business model and shape AMD into a more agile company offering differentiated solutions for a diverse set of markets."

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

Quarterly Financial Summary

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 the third quarter of 2014, AMD expects revenue to increase 2 percent, plus or minus 3 percent, sequentially.

For additional details regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:30 p.m. PT (5:30 p.m. ET) today to discuss its second quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site at www.amd.com. The webcast will be available for 12 months after the conference call.

                                                                            
Reconciliation of GAAP to Non-GAAP Operating                                
 Income (Loss)(1)                                                           
                                                 ---------------------------
(Millions)                                          Q2-14    Q1-14    Q2-13 
----------------------------------------------------------------------------
GAAP operating income (loss)                      $     63 $     49 $   (29)
----------------------------------------------------------------------------
  Workforce rebalancing severance charges                -       14       - 
----------------------------------------------------------------------------
  Amortization of acquired intangible assets             4        3       4 
----------------------------------------------------------------------------
  Restructuring and other special charges, net           -        -       5 
----------------------------------------------------------------------------
Non-GAAP operating income (loss)                  $     67 $     66 $   (20)
----------------------------------------------------------------------------
                                                                            
                                                                            
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss)               
                                                                            
                            ------------------------------------------------
(Millions except per share                                                  
 amounts)                         Q2-14           Q1-14           Q2-13     
----------------------------------------------------------------------------
GAAP net loss / Loss per                                                    
 share                       $  (36) $(0.05) $  (20) $(0.03) $  (74) $(0.10)
----------------------------------------------------------------------------
  Workforce rebalancing                                                     
   severance charges              -       -      14    0.02       -       - 
----------------------------------------------------------------------------
  Loss on debt redemption        49    0.06      15    0.02       -       - 
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets              4    0.01       3    0.00       4    0.01 
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges, net           -       -       -       -       5    0.01 
----------------------------------------------------------------------------
Non-GAAP net income (loss) /                                                
 Earnings (loss) per share   $   17  $ 0.02  $   12  $ 0.02  $  (65) $(0.09)
----------------------------------------------------------------------------
                                                                            

About AMD
AMD (NYSE: AMD) designs and integrates technology that powers millions of intelligent devices, including personal computers, tablets, game consoles and cloud servers that define the new era of surround computing. AMD solutions enable people everywhere to realize the full potential of their favorite devices and applications to push the boundaries of what is possible. For more information, visit www.amd.com.

Cautionary Statement

This earnings press release contains forward-looking statements concerning AMD, its ability to deliver non-GAAP profitability and revenue growth; its ability to diversify its business; its targeted and optimal cash, cash equivalents and marketable securities balances; expected OEM introductions of its products and its expected third quarter of 2014 revenue; which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "believes, "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects," "would" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact AMD's plans; that AMD will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying AMD's products or materially reduce their operations or demand for AMD's products; that AMD may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that AMD's third-party foundry suppliers will be unable to transition AMD's products to advanced manufacturing process technologies in a timely and effective way or to manufacture AMD's products on a timely basis in sufficient quantities and using competitive process technologies; that AMD will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GLOBALFOUNDRIES, Inc. (GF) microprocessor manufacturing facilities; that AMD's requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that AMD is unable to successfully implement its long-term business strategy; that AMD inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that AMD is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of AMD's products; that AMD may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for AMD's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions will not improve or will worsen; that PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on AMD's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended March 29, 2014.

AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.

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

                                                                            
                                                                            
(1) Computing Solutions segment primarily includes x86 microprocessors, as  
    standalone devices or as incorporated as an accelerated processing unit 
    (APU), chipsets, embedded processors and dense servers.                 
                                                                            
(2) Graphics and Visual Solutions segment primarily includes graphics       
    processing units (GPU), including professional graphics, semi-custom    
    System-on-Chip (SOC) products, development services and technology for  
    game consoles.                                                          
                                                                            
(3) All Other category primarily includes certain expenses and credits that 
    are not allocated to any of the operating segments. Also included in    
    this category are amortization of acquired intangible assets and        
    employee stock-based compensation expense. In addition, the Company     
    also included the following adjustments for the indicated periods: for  
    the first quarter of 2014, the Company included an adjustment for       
    workforce rebalancing severance charges and for the second quarter of   
    2013 and six months ending June 29, 2013, the Company included an       
    adjustment for net restructuring and other special charges. The Company 
    also reports the results of former businesses in the All Other category 
    because the operating results were not material.                        
                                                                            
(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*      
                                                                            
                                Three Months Ended        Six Months Ended  
                           ----------------------------  ------------------ 
                           Jun. 28,  Mar. 29,  Jun. 29,  Jun. 28,  Jun. 29, 
                             2014      2014      2013      2014      2013   
                           --------  --------  --------  --------  -------- 
    GAAP operating income                                                   
     (loss)                $     63  $     49  $    (29) $    112  $   (127)
      Workforce                                                             
       rebalancing                                    -                   - 
       severance charges          -        14                  14           
      Depreciation and                                                      
       amortization              49        50        54        99       116 
      Employee stock-based                                                  
       compensation                                                         
       expense                   21        23        20        44        44 
      Amortization of                                                       
       acquired intangible                                                  
       assets                     4         3         4         7           
                                                                          9 
      Restructuring and                                                     
       other special                                  5                  52 
       charges, net               -         -                   -           
                           --------  --------  --------  --------  -------- 
    Adjusted EBITDA        $    137  $    139  $     54  $    276  $     94 
                           ========  ========  ========  ========  ======== 
                                                                            
                                                                            
(5) Non-GAAP free cash flow reconciliation**                                
                                                                            
                                Three Months Ended        Six Months Ended  
                           ----------------------------  ------------------ 
                           Jun. 28,  Mar. 29,  Jun. 29,  Jun. 28,  Jun. 29, 
                             2014      2014      2013      2014      2013   
                           --------  --------  --------  --------  -------- 
    GAAP net cash used in                                                   
     operating activities  $    (28) $   (204) $    (35) $   (232) $   (190)
      Purchases of                                                          
       property, plant and                                                  
       equipment                (23)      (21)      (28)      (44)      (48)
                           --------  --------  --------  --------  -------- 
    Non-GAAP free cash                                                      
     flow                  $    (51) $   (225) $    (63) $   (276) $   (238)
                           ========  ========  ========  ========  ======== 
                                                                            
                                                                            
    * The Company presents Adjusted EBITDA as a supplemental measure of its 
    performance. Adjusted EBITDA for the Company is determined by adjusting 
    operating income (loss) for depreciation and amortization, employee     
    stock-based compensation expense and amortization of acquired           
    intangible assets. In addition, the Company also included the following 
    adjustments for the indicated periods: for the first quarter of 2014,   
    the Company included an adjustment for workforce rebalancing severance  
    charges and for second quarter of 2013 and six months ending June 29,   
    2013, the Company included an adjustment for net restructuring and      
    other special charges. The Company calculates and communicates Adjusted 
    EBITDA in the earnings press release because the Company's management   
    believes it is of importance to investors and lenders in relation to    
    its overall capital structure and its ability to borrow additional      
    funds. In addition, the Company presents Adjusted EBITDA because it     
    believes this measure assists investors in comparing its performance    
    across reporting periods on a consistent basis by excluding items that  
    the Company does not believe are indicative of its core operating       
    performance. The Company's calculation of Adjusted EBITDA may or may    
    not be consistent with the calculation of this measure by other         
    companies in the same industry. Investors should not view Adjusted      
    EBITDA as an alternative to the GAAP operating measure of operating     
    income (loss) or GAAP liquidity measures of cash flows from operating,  
    investing and financing activities. In addition, Adjusted EBITDA does   
    not take into account changes in certain assets and liabilities as well 
    as interest and income taxes that can affect cash flows.                
                                                                            
    ** The Company also presents non-GAAP free cash flow in the earnings    
    press release as a supplemental measure of its performance. Non-GAAP    
    free cash flow is determined by adjusting GAAP net cash used in         
    operating activities for capital expenditures. The Company calculates   
    and communicates non-GAAP free cash flow in the financial earnings      
    press release because the Company's management believes it is of        
    importance to investors to understand the nature of these cash flows.   
    The Company's calculation of non-GAAP free cash flow may or may not be  
    consistent with the calculation of this measure by other companies in   
    the same industry. Investors should not view non-GAAP free cash flow as 
    an alternative to GAAP liquidity measures of cash flows from operating  
    activities. The Company has provided reconciliations within the         
    earnings press release of these non-GAAP financial measures to the most 
    directly comparable GAAP financial measures.                            

Media Contact 
Drew Prairie 
512-602-4425 

drew.prairie@amd.com 

Investor Contact 
Ruth Cotter 
408-749-3887 

ruth.cotter@amd.com