Q2 2014 Results
- Revenue of $1.44 billion, increased 3 percent sequentially and 24 percent year-over-year
- Gross margin of 35 percent
- Operating income of $63 million and non-GAAP(1) operating income of $67 million
- Net loss of $36 million, loss per share of $0.05 and non-GAAP(1) net income of $17 million, earnings per share of $0.02
AMD (
"The second quarter capped off a solid first half of the year for AMD with strong revenue growth and improved financial performance," said Rory Read, AMD president and CEO. "Our transformation strategy is on track and we expect to deliver full year non-GAAP profitability and year-over-year revenue growth. We continue to strengthen our business model and shape AMD into a more agile company offering differentiated solutions for a diverse set of markets."
GAAP Financial Results
----------------------------------------------------------------------------
Q2-14 Q1-14 Q2-13
----------------------------------------------------------------------------
Revenue $1.44B $1.40B $1.16B
----------------------------------------------------------------------------
Operating income (loss) $63M $49M $(29)M
----------------------------------------------------------------------------
Net loss / Loss per share $(36)M/$(0.05) $(20)M/$(0.03) $(74)M/$(0.10)
----------------------------------------------------------------------------
Non-GAAP Financial Results(1)
----------------------------------------------------------------------------
Q2-14 Q1-14 Q2-13
----------------------------------------------------------------------------
Revenue $1.44B $1.40B $1.16B
----------------------------------------------------------------------------
Operating income (loss) $67M $66M $(20)M
----------------------------------------------------------------------------
Net income (loss) / Earnings
(loss) per share $17M/$0.02 $12M/$0.02 $(65)M/$(0.09)
----------------------------------------------------------------------------
Quarterly Financial Summary
- Gross margin was 35 percent in Q2 2014.
- Gross margin was flat sequentially.
- Cash, cash equivalents and marketable securities were $948 million at the end of the quarter, significantly higher than the target minimum of $600 million and close to the optimal zone of $1 billion.
- Total debt at the end of the quarter was $2.21 billion, an increase from $2.14 billion at the end of Q1 2014.
- During Q2 2014, the company continued re-profiling its near-term debt maturities, issuing $500 million in aggregate principal amount of 7.00% Senior Notes due 2024 and repurchasing all $452 million aggregate principal amount of the company's outstanding 8.125% Senior Notes due 2017.
- Computing Solutions segment revenue increased 1 percent sequentially and decreased 20 percent year-over-year. The year-over-year decline was due to decreased microprocessor unit shipments.
- Operating income was $9 million, an improvement from an operating loss of $3 million in Q1 2014 and operating income of $2 million in Q2 2013. The sequential increase was primarily driven by improved gross margin due to a richer mix of notebook products while the year-over-year increase was primarily driven by lower operating expenses.
- Microprocessor average selling price (ASP) increased sequentially and year-over-year.
- Graphics and Visual Solutions segment revenue increased 5 percent sequentially and 141 percent year-over-year driven largely by increased semi-custom SoC shipments. Graphics processor unit (GPU) revenue decreased sequentially and year-over-year, primarily due to a decrease in AIB channel sales, partially offset by increased sales of professional graphics and desktop OEM GPUs.
- Operating income was $82 million compared with $91 million in Q1 2014 and breakeven in Q2 2013. The sequential decline was primarily due to lower GPU revenue, while the year-over-year increase was driven by increased sales of semi-custom SoCs.
- GPU ASP decreased sequentially and year-over-year, primarily driven by lower AIB channel sales.
Recent Highlights
- AMD unveiled further details on its ambidextrous computing roadmap, including a 64-bit ARM architecture license and plans to develop custom high-performance ARM and x86 processor cores for 2016. The company's differentiated x86 and ARM strategy is designed to deliver unmatched computing and graphics performance using a shared, flexible infrastructure to drive new innovations.
- AMD appointed Dr. Lisa Su to Chief Operating Officer, responsible for overseeing the company's previously separate global operations, operating segments and sales organization to drive growth in both traditional PC and adjacent markets.
- AMD
realigned its organization structure to deliver unmatched customer value in both traditional PC markets and adjacent high-growth markets. Effective July 1, 2014, AMD's two new reportable segments are as follows:
- Computing and Graphics segment, which will primarily include desktop and notebook processors and chipsets, discrete GPUs and professional graphics;
- Enterprise, Embedded and Semi-Custom segment, which will primarily include server and embedded processors, dense servers, semi-custom SoC products, development services and technology for game consoles.
- AMD's Quarterly Report on Form 10-Q for the quarter ended September 27, 2014 will reflect this new segment reporting structure.
- AMD detailed its plans to accelerate the energy efficiency of its accelerated processing units (APUs) delivering 25x efficiency improvements by 2020 through design optimizations, intelligent power management and Heterogeneous System Architecture advances that are expected to enable AMD to outpace the industry's historical energy efficiency trend by at least 70 percent.
- AMD continued to gain momentum with its embedded products in the second quarter.
- The company introduced the 2nd-generation embedded R-Series APU as well as the AMD embedded G-Series SoC and CPU solutions, which will power HP thin clients and Advantech's new embedded industrial solution and are ideally suited for ATMs, kiosks and medical equipment applications.
- AMD embedded Radeon™ graphics were selected by Boeing for its next-generation advanced cockpit display systems.
- AMD publicly demonstrated for the first time its 64-bit ARM-based AMD Opteron™ A-Series processor, codenamed "Seattle," a significant step forward in expanding the footprint of ultra-efficient 64-bit ARM solutions for cloud computing and the Internet of Things.
- AMD expanded its mobile APU offerings in the quarter:
- Acer, Dell, HP and Lenovo have all introduced notebooks powered by AMD's newest 3rd-generation mainstream mobile APUs, which combine category-leading compute performance(2,3) with unique features and rich user interactions.
- AMD also launched its most advanced mobile APUs for consumer and commercial notebooks. The new 2014 performance mobile APUs include AMD's first FX-branded enthusiast class APU for notebooks as well as AMD Pro A-Series APUs. HP is offering the AMD PRO A-Series APUs across its Elite 700-Series notebooks, desktops and all-in-ones, with additional OEMs expected to introduce systems later this year.
- AMD expanded its 2nd-generation Graphics Core Next-based professional graphics solutions with the introduction of the AMD FirePro W8100 professional graphics card, which delivers 38x more performance(4) than the closest competitive offerings based on double precision testing. Dell, HP and more than 10 workstation system integrators have all announced systems featuring the new card.
- AMD's groundbreaking Mantle API, which creates more immersive experiences that take fuller advantage of modern APUs and GPUs to deliver console-like experiences, will be used by Electronic Arts in the upcoming Battlefield Hardline™, Dragon Age: Inquisition™ and Plants vs. Zombies: Garden Warfare™ games. More than 40 game titles supporting Mantle are in development with more than 50 developers actively working with the API for future titles.
Current Outlook
AMD's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.
For the third quarter of 2014, AMD expects revenue to increase 2 percent, plus or minus 3 percent, sequentially.
For additional details regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.
AMD Teleconference
AMD will hold a conference call for the financial community at 2:30 p.m. PT (5:30 p.m. ET) today to discuss its second quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site at www.amd.com. The webcast will be available for 12 months after the conference call.
Reconciliation of GAAP to Non-GAAP Operating
Income (Loss)(1)
---------------------------
(Millions) Q2-14 Q1-14 Q2-13
----------------------------------------------------------------------------
GAAP operating income (loss) $ 63 $ 49 $ (29)
----------------------------------------------------------------------------
Workforce rebalancing severance charges - 14 -
----------------------------------------------------------------------------
Amortization of acquired intangible assets 4 3 4
----------------------------------------------------------------------------
Restructuring and other special charges, net - - 5
----------------------------------------------------------------------------
Non-GAAP operating income (loss) $ 67 $ 66 $ (20)
----------------------------------------------------------------------------
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss)
------------------------------------------------
(Millions except per share
amounts) Q2-14 Q1-14 Q2-13
----------------------------------------------------------------------------
GAAP net loss / Loss per
share $ (36) $(0.05) $ (20) $(0.03) $ (74) $(0.10)
----------------------------------------------------------------------------
Workforce rebalancing
severance charges - - 14 0.02 - -
----------------------------------------------------------------------------
Loss on debt redemption 49 0.06 15 0.02 - -
----------------------------------------------------------------------------
Amortization of acquired
intangible assets 4 0.01 3 0.00 4 0.01
----------------------------------------------------------------------------
Restructuring and other
special charges, net - - - - 5 0.01
----------------------------------------------------------------------------
Non-GAAP net income (loss) /
Earnings (loss) per share $ 17 $ 0.02 $ 12 $ 0.02 $ (65) $(0.09)
----------------------------------------------------------------------------
About AMD
AMD (
Cautionary Statement
This earnings press release contains forward-looking statements concerning AMD, its ability to deliver non-GAAP profitability and revenue growth; its ability to diversify its business; its targeted and optimal cash, cash equivalents and marketable securities balances; expected OEM introductions of its products and its expected third quarter of 2014 revenue; which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "believes, "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects," "would" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact AMD's plans; that AMD will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying AMD's products or materially reduce their operations or demand for AMD's products; that AMD may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that AMD's third-party foundry suppliers will be unable to transition AMD's products to advanced manufacturing process technologies in a timely and effective way or to manufacture AMD's products on a timely basis in sufficient quantities and using competitive process technologies; that AMD will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GLOBALFOUNDRIES, Inc. (GF) microprocessor manufacturing facilities; that AMD's requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that AMD is unable to successfully implement its long-term business strategy; that AMD inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that AMD is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of AMD's products; that AMD may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for AMD's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions will not improve or will worsen; that PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on AMD's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended March 29, 2014.
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.
(1) In this earnings press release, in addition to GAAP financial results,
AMD has provided non-GAAP financial measures including non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP
earnings (loss) per share. These non-GAAP financial measures reflect
certain adjustments as presented in the tables in this earnings press
release. AMD also provided Adjusted EBITDA and non-GAAP free cash flow
as supplemental measures of its performance. These items are defined in
the footnotes to the selected corporate data tables provided at the end
of this earnings press release. AMD is providing these financial
measures because it believes this non-GAAP presentation makes it easier
for investors to compare its operating results for current and
historical periods and also because AMD believes it assists investors in
comparing AMD's performance across reporting periods on a consistent
basis by excluding items that it does not believe are indicative of its
core operating performance and for the other reasons described in the
footnotes to the selected data tables. Refer to the data tables at the
end of this earnings press release for additional AMD data.
(2) Testing conducted by AMD Performance Labs on optimized AMD reference
systems. PC manufacturers may vary configuration yielding different
results. Basemark CL is used to simulate compute performance; AMD A6-
6310 APU scored 21 while the "Haswell U" Pentium part scored 3. AMD
"Larne" reference platform system using AMD A6-6310 APU with AMD Radeon™
R4 Graphics, 2x2048 MBytes of DDR3-1600 RAM, Microsoft Windows 8.1
Single Language, and 13.300.0.0 - 13-Jan-2014 driver. Intel® Pentium®
3556U @ 1.70GHz with Intel® HD Graphics, 2x2048 MBytes of DDR3-1600 RAM,
Microsoft Windows 8.1 Single Language, 10.18.10.3412 - 28-Jan-2014
driver. BMN-11
(3) Testing conducted by AMD Performance Labs on optimized AMD reference
systems. PC manufacturers may vary configuration yielding different
results. Basemark CL is used to simulate compute performance; A4 Micro-
6400T APU scored 13 while the "Bay Trail T" platform scored 4. AMD
"Discovery" reference platform system using AMD A4 Micro-6400T APU with
Radeon™ R6 Graphics, 2048 MBytes of DDR3-
(4) SiSoftware Sandra test details: System Description: AMD FirePro W8100
vs. Nvidia Quadro K5000 - Dell T3610, Intel Xeon E5-1620 v2 @ 3.60 GHz,
8GB DDR3, Seagate HDD 7200RPM, Win7 64-bit SP1, 1920x1080 resolution.
AMD Driver 13.352.1009 | Nvidia Driver 333.11
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Three Months Ended Six Months Ended
------------------------------- --------------------
Jun. 28, Mar. 29, Jun. 29, Jun. 28, Jun. 29,
2014 2014 2013 2014 2013
--------- --------- --------- --------- ---------
Net revenue $ 1,441 $ 1,397 $ 1,161 $ 2,838 $ 2,249
Cost of sales $ 943 910 702 $ 1,853 1,345
--------- --------- --------- --------- ---------
Gross margin $ 498 487 459 985 904
Gross margin % 35% 35% 40% 35% 40%
Research and
development $ 277 279 308 556 620
Marketing, general
and administrative $ 154 156 171 310 350
Amortization of
acquired intangible
assets $ 4 3 4 7 9
Restructuring and
other special
charges, net $ - - 5 - 52
--------- --------- --------- --------- ---------
Operating income
(loss) $ 63 49 (29) 112 (127)
Interest income $ - 1 2 1 3
Interest expense $ (46) (47) (42) (93) (86)
Other expense, net $ (49) (21) (2) (70) (5)
--------- --------- --------- --------- ---------
Loss before income
taxes $ (32) (18) (71) (50) (215)
Provision for income
taxes $ 4 2 3 6 5
--------- --------- --------- --------- ---------
Net loss $ (36) $ (20) $ (74) $ (56) $ (220)
Net loss per share
Basic $ (0.05) $ (0.03) $ (0.10) $ (0.07) $ (0.29)
Diluted $ (0.05) $ (0.03) $ (0.10) $ (0.07) $ (0.29)
--------- --------- --------- --------- ---------
Shares used in per
share calculation
Basic 764 761 752 762 751
Diluted 764 761 752 762 751
--------- --------- --------- --------- ---------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Millions)
Three Months Ended Six Months Ended
------------------------------- --------------------
Jun. 28, Mar. 29, Jun. 29, Jun. 28, Jun. 29,
2014 2014 2013 2014 2013
--------- --------- --------- --------- ---------
Total comprehensive
loss $ (32) $ (21) $ (76) $ (53) $ (223)
--------- --------- --------- --------- ---------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)
--------- --------- ---------
Jun. 28, Mar. 29, Dec. 28,
2014 2014 2013
--------- --------- ---------
Assets
Current assets:
Cash and cash equivalents $ 503 $ 554 $ 869
Marketable securities 445 348 228
Accounts receivable, net 872 840 832
Inventories, net 960 869 884
Prepaid expenses and other current assets 152 79 71
--------- --------- ---------
Total current assets 2,932 2,690 2,884
Long-term marketable securities - 80 90
Property, plant and equipment, net 329 337 346
Acquisition related intangible assets, net 72 75 78
Goodwill 553 553 553
Other assets 360 373 386
--------- --------- ---------
Total Assets $ 4,246 $ 4,108 $ 4,337
========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt $ 101 $ 60 $ 60
Accounts payable 511 483 519
Payable to GLOBALFOUNDRIES 295 213 364
Accrued and other current liabilities 480 482 530
Deferred income on shipments to
distributors 118 146 145
--------- --------- ---------
Total current liabilities 1,505 1,384 1,618
Long-term debt 2,109 2,078 1,998
Other long-term liabilities 131 135 177
Stockholders' equity:
Capital stock:
Common stock, par value 8 8 7
Additional paid-in capital 6,905 6,883 6,894
Treasury stock, at cost (114) (114) (112)
Accumulated deficit (6,299) (6,263) (6,243)
Accumulated other comprehensive income
(loss) 1 (3) (2)
--------- --------- ---------
Total stockholders' equity 501 511 544
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 4,246 $ 4,108 $ 4,337
========= ========= =========
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Three Months Ended Six Months Ended
------------------ ------------------
Jun. 28, Jun. 28,
2014 2014
------------------ ------------------
Cash flows from operating
activities:
Net loss $ (36) $ (56)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 53 106
Employee stock-based
compensation expense 21 44
Non-cash interest expense 3 9
Loss on debt redemptions 49 64
Other (1) (4)
Changes in operating assets and
liabilities:
Accounts receivable (32) (40)
Inventories (90) (76)
Prepaid expenses and other
assets (75) (84)
Payable to GLOBALFOUNDRIES 82 (69)
Accounts payable, accrued
liabilities and other (2) (126)
------------------ ------------------
Net cash used in operating
activities $ (28) $ (232)
------------------ ------------------
Cash flows from investing
activities:
Purchases of property, plant and
equipment (23) (44)
Purchases of available-for-sale
securities (308) (618)
Proceeds from sale and maturity of
available-for-sale securities 288 488
------------------ ------------------
Net cash used in investing
activities $ (43) $ (174)
------------------ ------------------
Cash flows from financing
activities:
Net proceeds from foreign grants
and allowances $ 2 $ 2
Proceeds from issuance of common
stock 1 2
Proceeds from borrowings, net 491 1,080
Repayments of long-term debt and
capital lease obligations (473) (1,042)
Other (1) (2)
------------------ ------------------
Net cash provided by financing
activities $ 20 $ 40
------------------ ------------------
Net decrease in cash and cash
equivalents (51) (366)
------------------ ------------------
Cash and cash equivalents at
beginning of period $ 554 $ 869
------------------ ------------------
Cash and cash equivalents at end of
period $ 503 $ 503
------------------ ------------------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Three Months Ended Six Months Ended
------------------------------------------------------ -----------------
Jun. Mar. Jun. Jun. Jun.
28, 29, 29, 28, 29,
Segment and Category
Information 2014 2014 2013 2014 2013
------------------------------------------------------ -----------------
Computing Solutions (1)
Net revenue $ 669 $ 663 $ 841 $ 1,332 $ 1,592
Operating income (loss) $ 9 $ (3) $ 2 $ 6 $ (37)
Graphics and Visual
Solutions (2)
Net revenue 772 734 320 1,506 657
Operating income 82 91 - 173 16
All Other (3)
Operating loss (28) (39) (31) (67) (106)
Total
Net revenue $ 1,441 $ 1,397 $ 1,161 $ 2,838 $ 2,249
Operating income (loss) $ 63 $ 49 $ (29) $ 112 $ (127)
------------------------------------------------------ -----------------
Other Data
Depreciation and
amortization, excluding
amortization of acquired
intangible assets $ 49 $ 50 $ 54 $ 99 $ 116
Capital additions $ 23 $ 21 $ 28 $ 44 $ 48
Adjusted EBITDA (4) $ 137 $ 139 $ 54 $ 276 $ 94
Cash, cash equivalents and
marketable securities $ 948 $ 982 $ 1,117 $ 948 $ 1,117
Non-GAAP free cash flow
(5) $ (51) $ (225) $ (63) $ (276) $ (238)
Total assets $ 4,246 $ 4,108 $ 3,897 $ 4,246 $ 3,897
Total debt $ 2,210 $ 2,138 $ 2,047 $ 2,210 $ 2,047
Headcount 10,300 10,397 9,928 10,300 9,928
------------------------------------------------------ -----------------
(1) Computing Solutions segment primarily includes x86 microprocessors, as
standalone devices or as incorporated as an accelerated processing unit
(APU), chipsets, embedded processors and dense servers.
(2) Graphics and Visual Solutions segment primarily includes graphics
processing units (GPU), including professional graphics, semi-custom
System-on-Chip (SOC) products, development services and technology for
game consoles.
(3) All Other category primarily includes certain expenses and credits that
are not allocated to any of the operating segments. Also included in
this category are amortization of acquired intangible assets and
employee stock-based compensation expense. In addition, the Company
also included the following adjustments for the indicated periods: for
the first quarter of 2014, the Company included an adjustment for
workforce rebalancing severance charges and for the second quarter of
2013 and six months ending June 29, 2013, the Company included an
adjustment for net restructuring and other special charges. The Company
also reports the results of former businesses in the All Other category
because the operating results were not material.
(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
Three Months Ended Six Months Ended
---------------------------- ------------------
Jun. 28, Mar. 29, Jun. 29, Jun. 28, Jun. 29,
2014 2014 2013 2014 2013
-------- -------- -------- -------- --------
GAAP operating income
(loss) $ 63 $ 49 $ (29) $ 112 $ (127)
Workforce
rebalancing - -
severance charges - 14 14
Depreciation and
amortization 49 50 54 99 116
Employee stock-based
compensation
expense 21 23 20 44 44
Amortization of
acquired intangible
assets 4 3 4 7
9
Restructuring and
other special 5 52
charges, net - - -
-------- -------- -------- -------- --------
Adjusted EBITDA $ 137 $ 139 $ 54 $ 276 $ 94
======== ======== ======== ======== ========
(5) Non-GAAP free cash flow reconciliation**
Three Months Ended Six Months Ended
---------------------------- ------------------
Jun. 28, Mar. 29, Jun. 29, Jun. 28, Jun. 29,
2014 2014 2013 2014 2013
-------- -------- -------- -------- --------
GAAP net cash used in
operating activities $ (28) $ (204) $ (35) $ (232) $ (190)
Purchases of
property, plant and
equipment (23) (21) (28) (44) (48)
-------- -------- -------- -------- --------
Non-GAAP free cash
flow $ (51) $ (225) $ (63) $ (276) $ (238)
======== ======== ======== ======== ========
* The Company presents Adjusted EBITDA as a supplemental measure of its
performance. Adjusted EBITDA for the Company is determined by adjusting
operating income (loss) for depreciation and amortization, employee
stock-based compensation expense and amortization of acquired
intangible assets. In addition, the Company also included the following
adjustments for the indicated periods: for the first quarter of 2014,
the Company included an adjustment for workforce rebalancing severance
charges and for second quarter of 2013 and six months ending June 29,
2013, the Company included an adjustment for net restructuring and
other special charges. The Company calculates and communicates Adjusted
EBITDA in the earnings press release because the Company's management
believes it is of importance to investors and lenders in relation to
its overall capital structure and its ability to borrow additional
funds. In addition, the Company presents Adjusted EBITDA because it
believes this measure assists investors in comparing its performance
across reporting periods on a consistent basis by excluding items that
the Company does not believe are indicative of its core operating
performance. The Company's calculation of Adjusted EBITDA may or may
not be consistent with the calculation of this measure by other
companies in the same industry. Investors should not view Adjusted
EBITDA as an alternative to the GAAP operating measure of operating
income (loss) or GAAP liquidity measures of cash flows from operating,
investing and financing activities. In addition, Adjusted EBITDA does
not take into account changes in certain assets and liabilities as well
as interest and income taxes that can affect cash flows.
** The Company also presents non-GAAP free cash flow in the earnings
press release as a supplemental measure of its performance. Non-GAAP
free cash flow is determined by adjusting GAAP net cash used in
operating activities for capital expenditures. The Company calculates
and communicates non-GAAP free cash flow in the financial earnings
press release because the Company's management believes it is of
importance to investors to understand the nature of these cash flows.
The Company's calculation of non-GAAP free cash flow may or may not be
consistent with the calculation of this measure by other companies in
the same industry. Investors should not view non-GAAP free cash flow as
an alternative to GAAP liquidity measures of cash flows from operating
activities. The Company has provided reconciliations within the
earnings press release of these non-GAAP financial measures to the most
directly comparable GAAP financial measures.
Media Contact Drew Prairie 512-602-4425 drew.prairie@amd.com Investor Contact Ruth Cotter 408-749-3887 ruth.cotter@amd.com