AMD Reports 2016 First Quarter Results
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AMD Reports 2016 First Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Apr 21, 2016 -- AMD (NASDAQ: AMD) today announced revenue for the first quarter of 2016 of $832 million, operating loss of $68 million, and net loss of $109 million, or $0.14 per share. Non-GAAP(1) operating loss was $55 million and non-GAAP(1) net loss was $96 million, or $0.12 per share.

GAAP Financial Results

-------------------------------------------------------------------------
                               Q1-16           Q4-15           Q1-15     
-------------------------------------------------------------------------
Revenue                        $832M           $958M           $1.03B    
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Operating loss                 $(68)M          $(49)M         $(137)M    
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Net loss / Loss per share $(109)M/$(0.14) $(102)M/$(0.13) $(180)M/$(0.23)
-------------------------------------------------------------------------
                                                                         

Non-GAAP Financial Results(1)

----------------------------------------------------------------------------
                                  Q1-16           Q4-15           Q1-15     
----------------------------------------------------------------------------
Revenue                           $832M           $958M           $1.03B    
----------------------------------------------------------------------------
Operating loss                    $(55)M          $(39)M          $(30)M    
----------------------------------------------------------------------------
Net loss / Loss per share     $(96)M/$(0.12)  $(79)M/$(0.10)  $(73)M/$(0.09)
----------------------------------------------------------------------------
                                                                            

"Our strategy to build a strong business foundation and improve financial performance through delivering great products is beginning to show benefits," said Lisa Su, AMD president and CEO. "We continued to strengthen the performance of our Computing and Graphics business as our customers and partners show a growing preference for AMD. We are optimistic about our growth prospects in the second half of the year across our businesses based on new product introductions and design wins."

Q1 2016 Results

Financial Segment Summary

IP Licensing Agreement and JV with THATIC
AMD licensed high-performance processor and SoC technology to a newly-created JV it has formed with THATIC (Tianjin Haiguang Advanced Technology Investment Co., Ltd.) to develop SoCs tailored to the Chinese server market that will complement AMD's own offerings. The $293 million licensing agreement is a meaningful step in AMD's IP monetization strategy intended to accelerate the Company's growth and better monetize its valuable assets. Payments are contingent upon the JV achieving certain milestones. AMD also expects to receive royalty payments from the JV's future product sales.

"Our new licensing agreement is a great example of leveraging our strong IP portfolio to accelerate the adoption of our technologies more broadly," said Dr. Su. "The joint venture with THATIC provides AMD with a differentiated approach to help gain share in the fastest growing region of the server market."

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 Q2 2016, AMD expects revenue to increase 15 percent, plus or minus 3 percent, sequentially.

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

AMD Teleconference

AMD will hold a conference call for the financial community at 2:00 p.m. PDT (5:00 p.m. EDT) today to discuss its first 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)                  Q1-16      Q4-15      Q1-15  
----------------------------------------------------------------------------
GAAP Gross Margin                           $     269  $     283  $     326 
----------------------------------------------------------------------------
GAAP Gross Margin %                                32%        30%        32%
----------------------------------------------------------------------------
  Stock-based compensation                          1          1          1 
----------------------------------------------------------------------------
Non-GAAP Gross Margin                       $     270  $     284  $     327 
----------------------------------------------------------------------------
Non-GAAP Gross Margin %                            32%        30%        32%
----------------------------------------------------------------------------
                                                                            

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

                                                                            
                                           ---------------------------------
(Millions)                                     Q1-16      Q4-15      Q1-15  
----------------------------------------------------------------------------
GAAP operating loss                         $     (68) $     (49) $    (137)
----------------------------------------------------------------------------
  Restructuring and other special charges,                                  
   net                                             (3)        (6)        87 
----------------------------------------------------------------------------
  Amortization of acquired intangible                                       
   assets                                           -          -          3 
----------------------------------------------------------------------------
  Stock-based compensation                         16         16         17 
----------------------------------------------------------------------------
Non-GAAP operating loss                     $     (55) $     (39) $     (30)
----------------------------------------------------------------------------
                                                                            

Reconciliation of GAAP to Non-GAAP Net Income (Loss) /Earnings (Loss) per Share

                                                                            
                            ------------------------------------------------
(Millions except per share                                                  
 amounts)                         Q1-16           Q4-15           Q1-15     
----------------------------------------------------------------------------
GAAP net loss /loss per                                                     
 share                       $ (109) $(0.14) $ (102) $(0.13) $ (180) $(0.23)
----------------------------------------------------------------------------
  Restructuring and other                                                   
   special charges, net          (3)      -      (6)  (0.01)     87    0.11 
----------------------------------------------------------------------------
  Tax settlement in foreign                                                 
   jurisdiction                   -       -      13    0.02       -       - 
----------------------------------------------------------------------------
  Amortization of acquired                                                  
   intangible assets              -       -       -       -       3    0.00 
----------------------------------------------------------------------------
  Stock-based compensation       16    0.02      16    0.02      17    0.02 
----------------------------------------------------------------------------
Non-GAAP net loss / loss per                                                
 share                       $  (96) $(0.12) $  (79) $(0.10) $  (73) $(0.09)
----------------------------------------------------------------------------
                                                                            

About AMD

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

Cautionary Statement

This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. ("AMD" or the "Company") including AMD's ability to accelerate its growth and monetize its IP assets through its IP monetization strategy; the expected closing date for the proposed joint ventures between AMD and Nantong Fujitsu Microelectronics Co., Ltd.; AMD's expected growth prospects in the second half of 2016; the expected amounts to be received by AMD under the IP licensing agreement and the expected royalty payments to be received from future product sales; the expected benefits from AMD's joint ventures with THATIC; the features, functionality, timing and availiabily of AMD's future products; and AMD's expected second quarter 2016 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 "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 APU products and a certain portion of its GPU 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; 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 for a principal amount up to $500 million (Secured Revolving Line of Credit) impose restrictions on AMD that may adversely affect its ability to operate its business; the completion and impact of its 2015 restructuring plan, its transformation initiatives and any future restructuring actions could adversely affect it; 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; AMD's receipt of revenue from its semi-custom SoC products is dependent upon its technology being designed into third-party products and the success of those products; the demand for AMD's products depends in part on the market conditions in the industries into which they are sold. Fluctuations in demand for AMD's products or a market decline in any of these industries could have a material adverse effect on its results of operations; AMD's ability to design and introduce new products in a timely manner is dependent upon third-party intellectual property; AMD depends on third-party companies for the design, manufacture and supply of motherboards, 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; a variety of environmental laws that AMD is subject to could result in additional costs and liabilities; and higher health care costs and labor costs could adversely affect AMD's business. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to AMD's Annual Report on Form 10-K for the year ended December 26, 2015.

AMD, the AMD Arrow logo, Catalyst, FirePro, Radeon, and combinations thereof, are trademarks of Advanced Micro Devices, Inc. ARM is a registered trademark of ARM Limited in the EU and other countries. DirectX, Microsoft and Windows are registered trademarks of Microsoft Corporation in the US and other jurisdictions. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.

(1) In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP research and development and marketing, general and administrative expenses, non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this earnings press release. AMD also provided adjusted EBITDA and non-GAAP free cash flow as supplemental measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the CFO Commentary.

                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                             
(Millions except per share amounts and percentages)                         
                                                                            
                                               Three Months Ended           
                                     -------------------------------------- 
                                      March 26,   December 26,   March 28,  
                                         2016         2015          2015    
                                     -----------  ------------  ----------- 
Net revenue                          $       832  $        958  $     1,030 
Cost of sales                                563           675          704 
                                     -----------  ------------  ----------- 
Gross margin                                 269           283          326 
Gross margin %                                32%           30%          32%
Research and development                     242           229          242 
Marketing, general and                                                      
 administrative                              105           109          131 
Amortization of acquired intangible                                         
 assets                                        -             -            3 
Restructuring and other special                                             
 charges, net                                 (3)           (6)          87 
Licensing gain                                (7)            -            - 
                                     -----------  ------------  ----------- 
Operating loss                               (68)          (49)        (137)
Interest expense                             (40)          (41)         (40)
Other expense, net                             -            (2)           - 
                                     -----------  ------------  ----------- 
Loss before income taxes                    (108)          (92)        (177)
Provision for income taxes                     1            10            3 
                                     -----------  ------------  ----------- 
Net loss                             $      (109) $       (102) $      (180)
Net loss per share                                                          
Basic                                $     (0.14) $      (0.13) $     (0.23)
Diluted                              $     (0.14) $      (0.13) $     (0.23)
                                     -----------  ------------  ----------- 
Shares used in per share calculation                                        
Basic                                        793           791          777 
Diluted                                      793           791          777 
                                     -----------  ------------  ----------- 
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS                     
(Millions)                                                                  
                                               Three Months Ended           
                                     -------------------------------------- 
                                      March 26,   December 26,   March 28,  
                                         2016         2015          2015    
                                     -----------  ------------  ----------- 
Total comprehensive loss             $      (107) $        (95) $      (187)
                                     -----------  ------------  ----------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED BALANCE SHEETS (1) (2)                               
(Millions)                                                                  
                                                                            
                                                 March 26,    December 26,  
                                                    2016           2015     
                                               -------------  ------------- 
Assets                                                                      
                                                                            
Current assets:                                                             
                                                                            
  Cash and cash equivalents                    $         716  $         785 
  Accounts receivable, net                               508            533 
  Inventories, net                                       675            678 
  Prepayment and other - GLOBALFOUNDRIES                  26             33 
  Prepaid expenses                                        49             43 
  Other current assets                                   252            248 
                                               -------------  ------------- 
    Total current assets                               2,226          2,320 
Property, plant and equipment, net                       176            188 
Goodwill                                                 278            278 
Other assets                                             301            298 
                                               -------------  ------------- 
Total Assets                                   $       2,981  $       3,084 
                                               =============  ============= 
                                                                            
Liabilities and Stockholders' Equity (Deficit)                              
Current liabilities:                                                        
  Short-term debt                              $         230  $         230 
  Accounts payable                                       324            279 
  Payable to GLOBALFOUNDRIES                             233            245 
  Accrued liabilities                                    347            472 
  Other current liabilities                              151            124 
  Deferred income on shipments to distributors            43             53 
                                               -------------  ------------- 
    Total current liabilities                          1,328          1,403 
Long-term debt                                         2,006          2,007 
Other long-term liabilities                              150             86 
                                                                            
Stockholders' equity (deficit):                                             
  Capital stock:                                                            
    Common stock, par value                                8              8 
    Additional paid-in capital                         7,033          7,017 
    Treasury stock, at cost                             (123)          (123)
  Accumulated deficit                                 (7,415)        (7,306)
  Accumulated other comprehensive loss                    (6)            (8)
                                               -------------  ------------- 
    Total Stockholders' equity (deficit)                (503)          (412)
                                               -------------  ------------- 
Total Liabilities and Stockholders' Equity                                  
 (Deficit)                                     $       2,981  $       3,084 
                                               =============  ============= 
                                                                            
(1) Amounts reflected adoption of FASB ASU 2015-17, Balance Sheet           
Classification of Deferred Taxes in the first quarter of 2016.              
(2) Amounts reflected adoption of FASB ASU 2015-03, Simplifying the         
Presentation of Debt Issuance Costs in the first quarter of 2016.           
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
(Millions)                                                                  
                                                                            
                                                               Three Months 
                                                                  Ended     
                                                              ------------- 
                                                                March 26,   
                                                                   2016     
                                                              ------------- 
                                                                            
Cash flows from operating activities:                                       
  Net Loss                                                    $        (109)
                                                                            
  Adjustments to reconcile net loss to net cash used in                     
   operating activities:                                                    
                                                                            
    Depreciation and amortization                                        33 
    Stock-based compensation expense                                     16 
    Non-cash interest expense                                             4 
    Other                                                                (5)
  Changes in operating assets and liabilities:                              
    Accounts receivable                                                  26 
    Inventories                                                           3 
    Prepayment and other - GLOBALFOUNDRIES                                7 
    Prepaid expenses and other assets                                    22 
    Accounts payable, accrued liabilities and other                     (27)
    Payable to GLOBALFOUNDRIES                                          (12)
                                                              ------------- 
Net cash used in operating activities                         $         (42)
                                                              ------------- 
                                                                            
Cash flows from investing activities:                                       
  Purchases of property, plant and equipment                            (26)
                                                              ------------- 
Net cash used in investing activities                         $         (26)
                                                              ------------- 
                                                                            
Cash flows from financing activities:                                       
  Other                                                                  (1)
                                                              ------------- 
Net cash used in financing activities                         $          (1)
                                                              ------------- 
Net decrease in cash and cash equivalents                               (69)
                                                              ------------- 
Cash and cash equivalents at beginning of period              $         785 
                                                              ------------- 
Cash and cash equivalents at end of period                    $         716 
                                                              ------------- 
                                                                            
                                                                            
ADVANCED MICRO DEVICES, INC.                                                
SELECTED CORPORATE DATA                                                     
(Millions except headcount)                                                 
                                                Three Months Ended          
----------------------------------------------------------------------------
                                      March 26,   December 26,   March 28,  
Segment and Category Information         2016          2015         2015    
----------------------------------------------------------------------------
                                                                            
  Computing and Graphics (1)                                                
    Net revenue                      $       460  $        470  $       532 
    Operating loss                   $       (70) $        (99) $       (75)
                                                                            
  Enterprise, Embedded and Semi-                                            
   Custom (2)                                                               
    Net revenue                      $       372  $        488  $       498 
    Operating income                 $        16  $         59  $        45 
                                                                            
  All Other (3)                                                             
    Net revenue                                -             -            - 
    Operating loss                   $       (14) $         (9) $      (107)
                                                                            
  Total                                                                     
    Net revenue                      $       832  $        958  $     1,030 
    Operating loss                   $       (68) $        (49) $      (137)
                                                                            
----------------------------------------------------------------------------
                                                                            
Other Data                                                                  
                                                                            
  Depreciation and amortization,                                            
   excluding amortization of                                                
   acquired intangible assets        $        33  $         34  $        43 
  Capital additions                  $        26  $         32  $        22 
  Adjusted EBITDA (4)                $       (22) $         (5) $        13 
  Cash and cash equivalents          $       716  $        785  $       906 
  Non-GAAP free cash flow (5)        $       (68) $         27  $      (194)
  Total assets                       $     2,981  $      3,084  $     3,399 
  Total debt                         $     2,236  $      2,237  $     2,239 
  Headcount                                9,047         9,139        9,583 
----------------------------------------------------------------------------
                                                                            
See footnotes on the next page                                              
                                                                            
                                                                            
(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 gain.  
(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  
    amortization of acquired intangible assets for the first quarter of     
    2015.                                                                   
                                                                            
(4) Reconciliation of GAAP Operating Loss to Adjusted EBITDA*               
                                                                            
                                                Three Months Ended          
                                      ------------------------------------- 
                                       March 26,   December 26,   March 28, 
                                         2016          2015         2015    
                                      ----------  -------------  ---------- 
    GAAP operating loss               $      (68) $         (49) $     (137)
    Restructuring and other special                                         
     charges, net                             (3)            (6)         87 
    Stock-based compensation expense          16             16          17 
    Amortization of acquired                                                
     intangible assets                         -              -           3 
    Depreciation and amortization             33             34          43 
                                      ----------  -------------  ---------- 
    Adjusted EBITDA                   $      (22) $          (5) $       13 
                                      ==========  =============  ========== 
                                                                            
(5) Non-GAAP free cash flow reconciliation**                                
                                                Three Months Ended          
                                      ------------------------------------- 
                                       March 26,   December 26,   March 28, 
                                          2016         2015          2015   
                                      ----------  -------------  ---------- 
    GAAP net cash provided by (used                                         
     in) operating activities         $      (42) $          59  $     (172)
    Purchases of property, plant and                                        
     equipment                               (26)           (32)        (22)
                                      ----------  -------------  ---------- 
    Non-GAAP free cash flow           $      (68) $          27  $     (194)
                                      ==========  =============  ========== 
                                                                            
                                                                            
*   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 amortization of acquired intangible   
    assets for the first quarter of 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.                                                
                                                                            

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