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AMD Reports 2016 Third Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Oct 20, 2016 -- AMD (NASDAQ: AMD) today announced revenue for the third quarter of 2016 of $1,307 million, operating loss of $293 million, and net loss of $406 million, or $0.50 per share. Non-GAAP(1) operating income was $70 million and non-GAAP(1) net income was $27 million, or $0.03 per share.

                                                                            
                           GAAP Financial Results                           
                                                                            
----------------------------------------------------------------------------
                                  Q3-16           Q2-16           Q3-15     
----------------------------------------------------------------------------
Revenue                          $1,307M         $1,027M         $1,061M    
----------------------------------------------------------------------------
Operating loss                   $(293)M          $(8)M          $(158)M    
----------------------------------------------------------------------------
Net income (loss) / earnings                                                
 (loss) per share            $(406)M/$(0.50)    $69M/$0.08   $(197)M/$(0.25)
----------------------------------------------------------------------------
                                                                            
                                                                            
                        Non-GAAP Financial Results(1)                       
                                                                            
----------------------------------------------------------------------------
                                  Q3-16           Q2-16           Q3-15     
----------------------------------------------------------------------------
Revenue                          $1,307M         $1,027M         $1,061M    
----------------------------------------------------------------------------
Operating income (loss)            $70M            $3M            $(97)M    
----------------------------------------------------------------------------
Net income (loss) / earnings                                                
 (loss) per share               $27M/$0.03    $(40)M/$(0.05) $(136)M/$(0.17)
----------------------------------------------------------------------------
                                                                            

"Our third quarter financial results highlight the progress we are making across our business," said Lisa Su, AMD president and CEO. "We now expect to deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs. This positions us well to accelerate our growth in 2017 as we introduce new high-performance computing and graphics products."

Q3 2016 Results

Financial Segment Summary

Q3 2016 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 2016, AMD expects revenue to decrease 18 percent sequentially, plus or minus 3 percent. The midpoint of guidance would result in Q4 2016 revenue increasing approximately 12 percent year-over-year and 2016 revenue increasing 6 percent from 2015.

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 p.m. PDT (5 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)                      Q3-16    Q2-16    Q3-15  
                                                  -------  -------  ------- 
GAAP Gross Margin                                 $    59  $   319  $   239 
GAAP Gross Margin %                                     5%      31%      23%
  Charge related to the sixth amendment to the                              
   WSA with GF                                        340        -        - 
Non-GAAP Gross Margin                             $   399  $   319  $   239 
Non-GAAP Gross Margin %                                31%      31%      23%
                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Operating Expenses                       
                                                                            
(Millions)                                         Q3-16    Q2-16    Q3-15  
                                                  -------  -------  ------- 
GAAP operating expenses                           $   376  $   353  $   397 
  Restructuring and other special charges, net          -       (7)      48 
  Stock-based compensation                             23       18       13 
                                                  -------  -------  ------- 
Non-GAAP operating expenses                       $   353  $   342  $   336 
                                                  -------  -------  ------- 
                                                                            
                                                                            
Reconciliation of GAAP Operating loss to Non-GAAP Operating Income (loss)   
                                                                            
(Millions)                                         Q3-16    Q2-16    Q3-15  
                                                  -------  -------  ------- 
GAAP operating loss                               $  (293) $    (8) $  (158)
  Charge related to the sixth amendment to the                              
   WSA with GF                                        340        -        - 
  Restructuring and other special charges, net          -       (7)      48 
  Stock-based compensation                             23       18       13 
                                                  -------  -------  ------- 
Non-GAAP operating income (loss)                  $    70  $     3  $   (97)
                                                  -------  -------  ------- 
                                                                            
                                                                            
Reconciliation of GAAP to Non-GAAP Net Income (Loss)/Income (Loss) per      
 Share                                                                      
                                                                            
(Millions except per share                                                  
 amounts)                         Q3-16           Q2-16           Q3-15     
                             --------------  --------------  -------------- 
GAAP net income (loss)                                                      
 /income (loss) per share    $ (406) $(0.50) $   69  $ 0.08  $ (197) $(0.25)
  Charge related to the                                                     
   sixth amendment to the                                                   
   WSA with GF                  340    0.39       -       -       -       - 
  Loss on debt redemption        61    0.07       -       -       -       - 
  Non-cash interest expense                                                 
   related to convertible                                                   
   debt                           1       -       -       -       -       - 
  Restructuring and other                                                   
   special charges, net           -       -      (7)  (0.01)     48    0.06 
  Stock-based compensation       23    0.03      18    0.02      13    0.02 
  Gain on sale of 85% of                                                    
   ATMP JV                        4       -    (150)  (0.19)      -       - 
  Equity in income (loss) of                                                
   ATMP JV                        5    0.01       3       -       -       - 
  Tax provision (benefit)                                                   
   related to sale of 85% of                                                
   ATMP JV                       (1)      -      27    0.03       -       - 
                             ------  ------  ------  ------  ------  ------ 
Non-GAAP net income (loss)/                                                 
 income (loss) per share     $   27  $ 0.03  $  (40) $(0.05) $ (136) $(0.17)
                             ------  ------  ------  ------  ------  ------ 
                                                                            
                                                                            

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) including AMD's expected fourth quarter 2016 revenue and expected 2016 revenue, the features, functionality, timing and availability of AMD's future products; AMD's expectation that it will deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs; AMD's ability to accelerate growth as it introduces new high-performance computing and graphics products in 2017; and AMD's plans to further reduce its debt by deploying a significant portion of its remaining cash from its capital markets transactions, 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 GLOBALFOUNDRIES INC. (GF) to manufacture all of its microprocessor and accelerated processing unit (APU) products and a certain portion of its discrete graphics processing units (GPUs) products, with limited exceptions. 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; the loss of a significant customer may have a material adverse effect on AMD; 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; 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 the 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 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; the completion and impact of the 2015 Restructuring Plan, its transformation initiatives and any future restructuring actions could adversely affect it; 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, software and other computer platform components to support its business; if AMD loses Microsoft Corporation's 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'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; acquisitions, divestitures and/or joint ventures could disrupt its business, harm its financial condition and operating results or dilute, or adversely affect the price of, its common stock; 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 sensitive information, be costly to remediate and cause significant damage to its business and reputation; AMD's operating results are subject to quarterly and seasonal sales patterns; if essential equipment, materials or manufacturing processes 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; AMD may incur future impairments of goodwill; 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; and AMD is subject to environmental laws, conflict minerals-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as a variety of other laws or regulations that could result in additional costs and liabilities. 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 25, 2016.

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 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. Statement of "future-proof" refers to support of current and upcoming    
   technology standards including 14nm FinFET process technology, DirectX®12
   and Vulkan™ API support, new display technology, and experiences such as 
   VR. "Future-proof" statement is not meant to serve as a warranty or      
   indicate that users will never have to upgrade their graphics technology 
   again. Support of current and upcoming technology standards described    
   above has the potential to reduce frequency of graphics upgrades for some
   users.                                                                   
                                                                            
3. Testing by AMD Performance labs. PC manufacturers may vary configurations
   yielding different results. 3DMark 11 Performance is used to simulate    
   graphics performance, and Cinebench R11.5 1T Performance is used to      
   simulate single threaded CPU performance; the 7th Generation AMD PRO A12-
   9800 at 65W scored 3521.25 and 1.21 while the AMD PRO A10-8850B at 95W   
   scored 2880 and 1.06 respectively. CPU Performance improvement:          
   1.21/1.06=1.14X or 14% more, Graphic Performance improvement:            
   3521.25/2880=1.22X or 22% more, Power Consumption improvement: (95W-     
   65W)/95W=0.32X or 32% less. BRPD-4                                       
                                                                            
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                         Three Months Ended             Nine Months Ended   
                 ----------------------------------  ---------------------- 
                  September   June 25,    September   September   September 
                  24, 2016      2016      26, 2015    24, 2016    26, 2015  
                 ----------  ----------  ----------  ----------  ---------- 
Net revenue      $    1,307  $    1,027  $    1,061  $    3,166  $    3,033 
Cost of sales         1,248         708         822       2,519       2,236 
                 ----------  ----------  ----------  ----------  ---------- 
Gross margin             59         319         239         647         797 
Gross margin %            5%         31%         23%         20%         26%
Research and                                                                
 development            259         243         241         744         718 
Marketing,                                                                  
 general and                                                                
 administrative         117         117         108         339         373 
Amortization of                                                             
 acquired                                                                   
 intangible                                                                 
 assets                   -           -           -           -           3 
Restructuring                                                               
 and other                                                                  
 special                                                                    
 charges, net             -          (7)         48         (10)        135 
Licensing gain          (24)        (26)          -         (57)          - 
                 ----------  ----------  ----------  ----------  ---------- 
Operating loss         (293)         (8)       (158)       (369)       (432)
Interest expense        (41)        (41)        (39)       (122)       (119)
Other income                                                                
 (expense), net         (63)        150           -          87          (3)
                 ----------  ----------  ----------  ----------  ---------- 
Income (loss)                                                               
 before equity                                                              
 loss and income                                                            
 taxes                 (397)        101        (197)       (404)       (554)
Provision for                                                               
 income taxes             4          29           -          34           4 
Equity in income                                                            
 (loss) of ATMP                                                             
 JV                      (5)         (3)          -          (8)          - 
                 ----------  ----------  ----------  ----------  ---------- 
Net income                                                                  
 (loss)          $     (406) $       69  $     (197) $     (446) $     (558)
Net income                                                                  
 (loss) per                                                                 
 share                                                                      
  Basic          $    (0.50) $     0.09  $    (0.25) $    (0.56) $    (0.72)
  Diluted        $    (0.50) $     0.08  $    (0.25) $    (0.56) $    (0.72)
                 ----------  ----------  ----------  ----------  ---------- 
Shares used in                                                              
 per share                                                                  
 calculation                                                                
  Basic                 815         794         785         801         780 
  Diluted               815         821         785         801         780 
                 ----------  ----------  ----------  ----------  ---------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            
(Millions)                                                                  
                                                                            
                         Three Months Ended             Nine Months Ended   
                 ----------------------------------  ---------------------- 
                  September   June 25,    September   September   September 
                  24, 2016      2016      26, 2015    24, 2016    26, 2015  
                 ----------  ----------  ----------  ----------  ---------- 
Total                                                                       
 comprehensive                                                              
 income (loss)   $     (406) $       72  $     (207) $     (441) $     (568)
                 ----------  ----------  ----------  ----------  ---------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS (1) (2)                               
(Millions)                                                                  
                                                                            
                             --------------  --------------  -------------- 
                              September 24,     June 25,      December 26,  
                                  2016            2016            2015      
                             --------------  --------------  -------------- 
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents  $        1,258  $          957  $          785 
  Accounts receivable, net              640             671             533 
  Inventories, net                      772             743             678 
  Prepayment and other -                                                    
   GLOBALFOUNDRIES                       13              12              33 
  Prepaid expenses                       63              68              43 
  Other current assets                   78              55             248 
                                                                            
                             --------------  --------------  -------------- 
    Total current assets              2,824           2,506           2,320 
Property, plant and                                                         
 equipment, net                         161             169             188 
Goodwill                                289             289             278 
Investment in ATMP JV                    60              62               - 
Other assets                            282             290             298 
                                                                            
                             --------------  --------------  -------------- 
Total Assets                 $        3,616  $        3,316  $        3,084 
                             ==============  ==============  ============== 
                                                                            
Liabilities and                                                             
 Stockholders' Equity                                                       
 (Deficit)                                                                  
Current liabilities:                                                        
  Short-term debt            $            -  $          226  $          230 
  Accounts payable                      582             616             279 
  Payable to GLOBALFOUNDRIES            284              94             245 
  Payable to ATMP JV                    144             150               - 
  Accrued liabilities                   384             392             472 
  Other current liabilities              25              61             124 
  Deferred income on                                                        
   shipments to distributors             54              42              53 
                                                                            
                             --------------  --------------  -------------- 
    Total current                                                           
     liabilities                      1,473           1,581           1,403 
Long-term debt, net                   1,632           2,012           2,007 
Other long-term liabilities             126             136              86 
                                                                            
Stockholders' equity                                                        
 (deficit):                                                                 
  Capital stock:                                                            
    Common stock, par value               9               8               8 
    Additional paid-in                                                      
     capital                          8,258           7,053           7,017 
    Treasury stock, at cost            (127)           (125)           (123)
  Accumulated deficit                (7,752)         (7,346)         (7,306)
  Accumulated other                                                         
   comprehensive loss                    (3)             (3)             (8)
                                                                            
                             --------------  --------------  -------------- 
    Total Stockholders'                                                     
     equity (deficit)                   385            (413)           (412)
                             --------------  --------------  -------------- 
Total Liabilities and                                                       
 Stockholders' Equity                                                       
 (Deficit)                   $        3,616  $        3,316  $        3,084 
                             ==============  ==============  ============== 
                                                                            
(1)  Amounts reflected adoption of FASB ASU 2015-17, Balance Sheet          
     Classification of Deferred Taxes beginning in the first quarter of     
     2016.                                                                  
(2)  Amounts reflected adoption of FASB ASU 2015-03, Simplifying the        
     Presentation of Debt Issuance Costs beginning in the first quarter of  
     2016.                                                                  
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                                                            
                                              Three Months     Nine Months  
                                                  Ended           Ended     
                                             --------------  -------------- 
                                             September 24,   September 24,  
                                                  2016            2016      
                                             --------------  -------------- 
                                                                            
Cash flows from operating activities:                                       
  Net loss                                   $         (406) $         (446)
  Adjustments to reconcile net loss to net                                  
   cash provided by (used in) operating                                     
   activities:                                                              
    Net gain on sale of equity interests in                                 
     ATMP JV                                              4            (146)
    Equity in loss of ATMP JV                             2               1 
    Depreciation and amortization                        33              99 
    Provision for deferred income taxes                   -              11 
    Stock-based compensation expense                     23              57 
    Non-cash interest expense                             4              11 
    Loss on debt redemption                              61              61 
    Fair value of warrant issued related to                                 
     sixth amendment to the WSA                         240             240 
    Other                                                 1              (5)
  Changes in operating assets and                                           
   liabilities:                                                             
    Accounts receivable                                  31            (107)
    Inventories                                         (28)            (94)
    Prepayment and other - GLOBALFOUNDRIES               (1)             20 
    Prepaid expenses and other assets                   (17)           (134)
    Payable to ATMP JV                                   (6)            144 
    Payable to GLOBALFOUNDRIES                          190              39 
    Accounts payable, accrued liabilities                                   
     and other                                         (102)            151 
                                             --------------  -------------- 
Net cash provided by (used in) operating                                    
 activities                                  $           29  $          (98)
                                             --------------  -------------- 
                                                                            
Cash flows from investing activities:                                       
  Purchases of property, plant and equipment             (9)            (56)
  Net proceeds from sale of equity interests                                
   in ATMP JV                                            (5)            346 
  Other                                                   4               3 
                                             --------------  -------------- 
Net cash provided by (used in) investing                                    
 activities                                  $          (10) $          293 
                                             --------------  -------------- 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from issuance of common stock,                                   
   net of issuance costs                                668             668 
  Proceeds from issuance of convertible                                     
   senior notes, net of issuance costs                  681             681 
  Proceeds from issuance of common stock                                    
   under stock-based compensation equity                                    
   plans                                                 10              12 
  Repayments of borrowings, net                        (226)           (230)
  Repayments of long-term debt                         (848)           (848)
  Other                                                  (3)             (5)
                                             --------------  -------------- 
Net cash provided by financing activities    $          282  $          278 
                                             --------------  -------------- 
Net increase in cash and cash equivalents               301             473 
                                             --------------  -------------- 
Cash and cash equivalents at beginning of                                   
 period                                      $          957  $          785 
                                             --------------  -------------- 
Cash and cash equivalents at end of period   $        1,258  $        1,258 
                                             --------------  -------------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                                            
                         Three Months Ended             Nine Months Ended   
---------------------------------------------------- -----------------------
Segment and                                                                 
 Category         September   June 25,    September   September   September 
 Information      24, 2016      2016      26, 2015    24, 2016    26, 2015  
---------------------------------------------------- -----------------------
                                                                            
  Computing and                                                             
   Graphics (1)                                                             
    Net revenue  $      472  $      435  $      424  $    1,367  $    1,335 
    Operating                                                               
     loss        $      (66) $      (81) $     (181) $     (217) $     (403)
                                                                            
  Enterprise,                                                               
   Embedded and                                                             
   Semi-Custom                                                              
   (2)                                                                      
    Net revenue  $      835  $      592  $      637  $    1,799  $    1,698 
    Operating                                                               
     income      $      136  $       84  $       84  $      236  $      156 
                                                                            
  All Other (3)                                                             
    Net revenue           -           -           -           -           - 
    Operating                                                               
     loss              (363)        (11)        (61)       (388)       (185)
                                                                            
  Total                                                                     
    Net revenue  $    1,307  $    1,027  $    1,061  $    3,166  $    3,033 
    Operating                                                               
     loss        $     (293) $       (8) $     (158) $     (369) $     (432)
                                                                            
---------------------------------------------------- -----------------------
                                                                            
Other Data                                                                  
                                                                            
  Depreciation                                                              
   and                                                                      
   amortization,                                                            
   excluding                                                                
   amortization                                                             
   of acquired                                                              
   intangible                                                               
   assets        $       33  $       33  $       42  $       99  $      130 
  Capital                                                                   
   additions     $        9  $       21  $       25  $       56  $       64 
  Adjusted                                                                  
   EBITDA (4)    $      103  $       36  $      (55) $      117  $      (84)
  Cash and cash                                                             
   equivalents   $    1,258  $      957  $      755  $    1,258  $      755 
  Non-GAAP free                                                             
   cash flow (5) $       20  $     (106) $      (81) $     (154) $     (349)
  Total assets   $    3,616  $    3,316  $    3,229  $    3,616  $    3,229 
  Total debt     $    1,632  $    2,238  $    2,260  $    1,632  $    2,260 
  Headcount           8,306       8,099       9,475       8,306       9,475 
---------------------------------------------------- -----------------------
                                                                            
(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, technology for game consoles and licensing       
     portions of its intellectual property portfolio.                       
(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 stock-based compensation expense and restructuring   
     and other special charges, net. In addition, the Company also included 
     a charge related to the sixth amendment to the WSA with GF for the     
     three and nine months ended September 24, 2016 and amortization of     
     acquired intangible assets for the nine months ended September 26,     
     2015.                                                                  
                                                                            
                                                                            
(4)  Reconciliation of GAAP Operating Loss to Adjusted EBITDA*              
                             Three Months Ended          Nine Months Ended  
                      -------------------------------  -------------------- 
                      September   June 25,  September  September  September 
                       24, 2016     2016     26, 2015   24, 2016   26, 2015 
                      ---------  ---------  ---------  ---------  --------- 
     GAAP operating                                                         
      loss            $    (293) $      (8) $    (158) $    (369) $    (432)
     Charge related                                                         
      to the sixth                                                          
      amendment to                                                          
      the WSA with GF       340          -          -        340          - 
     Technology node                                                        
      transition                                                            
      charge                  -          -          -          -         33 
     Restructuring                                                          
      and other                                                             
      special                                                               
      charges, net            -         (7)        48        (10)       135 
     Stock-based                                                            
      compensation           23         18         13         57         47 
     Amortization of                                                        
      acquired                                                              
      intangible                                                            
      assets                  -          -          -          -          3 
     Depreciation and                                                       
      amortization           33         33         42         99        130 
                      ---------  ---------  ---------  ---------  --------- 
     Adjusted EBITDA  $     103  $      36  $     (55) $     117  $     (84)
                      =========  =========  =========  =========  ========= 
                                                                            
(5)  Non-GAAP free cash flow reconciliation**                               
                             Three Months Ended          Nine Months Ended  
                      -------------------------------  -------------------- 
                      September   June 25,  September  September  September 
                       24, 2016     2016     26, 2015   24, 2016   26, 2015 
                      ---------  ---------  ---------  ---------  --------- 
     GAAP net cash                                                          
      provided by                                                           
      (used in)                                                             
      operating                                                             
      activities      $      29  $     (85) $     (56) $     (98) $    (285)
     Purchases of                                                           
      property, plant                                                       
      and equipment          (9)       (21)       (25)       (56)       (64)
                      ---------  ---------  ---------  ---------  --------- 
     Non-GAAP free                                                          
      cash flow       $      20  $    (106) $     (81) $    (154) $    (349)
                      =========  =========  =========  =========  ========= 
                                                                            
                                                                            
*    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 restructuring and other special charges, net. 
     In addition, the Company excluded a charge related to the sixth        
     amendment to the WSA with GF for the three and nine months ended       
     September 24, 2016, a technology node transition charge and            
     amortization of acquired intangible assets for the nine months ended   
     September 26, 2015. 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.                                               
                                                                            

Media Contact
Drew Prairie
512-602-4425

drew.prairie@amd.com

Investor Contact
Ruth Cotter
408-749-3887

ruth.cotter@amd.com