AMD (
Cautionary Statement
This document contains forward-looking statements concerning AMD, its first quarter of 2014 revenue, AMD's long-term strategy, AMD's ability to diversify its business, and AMD's ability to leverage its IP in its core business and targeted growth areas; 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 presentation are based on current beliefs, assumptions and expectations, speak only as of the date of this presentation and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that that Intel Corporation's pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact the Company's plans; that the Company will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying the Company's products or materially reduce their operations or demand for its products; that the Company may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that the Company's third-party foundry suppliers will be unable to transition the Company's products to advanced manufacturing process technologies in a timely and effective way or to manufacture the Company's products on a timely basis in sufficient quantities and using competitive process technologies; that the Company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize the Company's projected manufacturing capacity needs at GLOBALFOUNDRIES Inc. (GF) microprocessor manufacturing facilities; that the Company's requirements for wafers will be less than the fixed number of wafers that we agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die the Company receives from each wafer; that the Company is unable to successfully implement its long-term business strategy; that the Company inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that the Company is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of the Company's products; that the Company may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for the Company's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions, including consumer PC market conditions, will not improve or will worsen; and the effect of political or economic instability, domestically or internationally, on the Company's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended September 28, 2013.
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.
(1) In this press release, in addition to GAAP financial results, the
company has provided non-GAAP financial measures including non-GAAP
gross margin, non-GAAP operating income (loss), non-GAAP net income
(loss) and non-GAAP earnings (loss) per share. These non-GAAP financial
measures reflect certain adjustments as presented in the tables in this
press release. The company also provided Adjusted EBITDA and non-GAAP
free cash flow as supplemental measures of its performance. These items
are defined in the footnotes to the selected corporate data tables
provided at the end of this press release. The company is providing
these financial measures because it believes this non-GAAP presentation
makes it easier for investors to compare its operating results for
current and historical periods and also because the Company believes it
assists investors in comparing the company's performance across
reporting periods on a consistent basis by excluding items that it does
not believe are indicative of its core operating performance and for
the other reasons described in the footnotes to the selected data
tables. Refer to corresponding tables at the end of this press release
for additional AMD data.
(2) The new 2014 AMD A-Series low power APU platform, codenamed "Mullins,"
is expected to deliver up to 139 percent better productivity
performance per watt when compared to the previous generation "Temash"
platform. Testing conducted by AMD Performance Labs on optimized AMD
reference systems. PC manufacturers may vary configuration yielding
different results. PCMark 8 - Home score divided by TDP (W) is used to
simulate productivity performance per watt; the Mullins platform (4.5W)
scored 1809 while the "Temash" platform (8W) scored 1343. AMD "Larne"
reference platform system used for both APUs. "Temash"-based AMD A6-
1450 quad-core APU with AMD Radeon™ HD 8250 Graphics, 2x2GB of DDR3-
1333MHz RAM (running at 1066MHz,) Windows 8.1, 13.200.11.0 - 03-Sep-
2013 driver. Pre-production engineering sample of "Mullins" quad-core
APU with next generation AMD Radeon graphics (model number TBD), 2x2GB
DDR3-1333MHz RAM, Windows 8.1, and unreleased reference driver. MUN-3
(3) The new 2014 AMD A-Series mainstream APU platform, codenamed "Beema,"
is expected to deliver up to 104 percent better productivity
performance-per-watt when compared to the previous generation "Kabini"
platform. Testing conducted by AMD Performance Labs on optimized AMD
reference systems. PC manufacturers may vary configuration yielding
different results. PCMark 8 - Home score divided by TDP (W) is used to
simulate productivity performance per watt; the "Beema" platform (15W)
scored 2312 while the "Kabini" platform (25W) scored 1861. AMD "Larne"
reference platform system used for both APUs. "Kabini"-based AMD A6-
5200 quad-core APU with AMD Radeon™ HD 8400 Graphics, 2x2GB of DDR3-
1600MHz RAM, Windows 8.1, 13.200.11.0 - 03-Sep-2013 driver. Pre-
production engineering sample of "Beema" quad-core APU with next
generation AMD Radeon graphics (model number TBD), 2x2GB DDR3-1600MHz
RAM, Windows 8.1, and unreleased reference driver. BMN-3
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended Year Ended
------------------------------------------------------- ------------------
Dec 28, Sept 28, Dec. 29, Dec. 28, Dec. 29,
2013 2013 2012 2013 2012
------------------------------------------------------- ------------------
Net revenue $ 1,589 $ 1,461 $ 1,155 $ 5,299 $ 5,422
Cost of sales 1,036 940 977 3,321 4,187
------------------------------------------------------- ------------------
Gross margin 553 521 178 1,978 1,235
Gross margin % 35% 36% 15% 37% 23%
Research and development 293 288 313 1,201 1,354
Marketing, general and
administrative 169 155 193 674 823
Amortization of acquired
intangible assets 4 5 4 18 14
Restructuring and other
special charges (gains),
net - (22) 90 30 100
Legal settlements, net (48) - - (48) -
------------------------------------------------------- ------------------
Operating income (loss) 135 95 (422) 103 (1,056)
Interest income 1 1 2 5 8
Interest expense (44) (47) (45) (177) (175)
Other income (expense),
net (2) 2 (4) (5) 6
------------------------------------------------------- ------------------
Income (loss) before
income taxes 90 51 (469) (74) (1,217)
Provision (benefit) for
income taxes 1 3 4 9 (34)
------------------------------------------------------- ------------------
Net income (loss) $ 89 $ 48 $ (473) $ (83) $ (1,183)
Net income (loss) per
share
Basic $ 0.12 $ 0.06 $ (0.63) $ (0.11) $ (1.60)
Diluted $ 0.12 $ 0.06 $ (0.63) $ (0.11) $ (1.60)
------------------------------------------------------- ------------------
Shares used in per share
calculation
Basic 759 757 747 754 741
Diluted 766 764 747 754 741
------------------------------------------------------- ------------------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Millions)
Quarter Ended Year Ended
------------------------------------------------------- ------------------
Dec 28, Sept 28, Dec. 29, Dec. 28, Dec. 29,
2013 2013 2012 2013 2012
------------------------------------------------------- ------------------
Total comprehensive income
(loss) $ 89 $ 52 $ (475) $ (82) $ (1,181)
------------------------------------------------------- ------------------
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)
---------------------------------------------------------------------------
Dec. 28, Sept. 28, Dec. 29,
2013 2013 2012
---------------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 869 $ 543 $ 549
Marketable securities 228 517 453
Accounts receivable, net 832 873 630
Inventories, net 884 922 562
Prepaid expenses and other current assets 71 84 71
---------------------------------------------------------------------------
Total current assets 2,884 2,939 2,265
Long-term marketable securities 90 121 181
Property, plant and equipment, net 346 358 658
Acquisition related intangible assets, net 78 82 96
Goodwill 553 553 553
Other assets 386 264 247
---------------------------------------------------------------------------
Total Assets $ 4,337 $ 4,317 $ 4,000
===========================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt $ 60 $ 5 $ 5
Accounts payable 519 574 278
Payable to GLOBALFOUNDRIES 364 495 454
Accrued and other current liabilities 530 549 552
Deferred income on shipments to
distributors 145 139 108
---------------------------------------------------------------------------
Total current liabilities 1,618 1,762 1,397
Long-term debt 1,998 2,044 2,037
Other long-term liabilities 177 77 28
Stockholders' equity:
Capital stock:
Common stock, par value 7 7 7
Additional paid-in capital 6,894 6,872 6,803
Treasury stock, at cost (112) (111) (109)
Accumulated deficit (6,243) (6,332) (6,160)
Accumulated other comprehensive loss (2) (2) (3)
---------------------------------------------------------------------------
Total stockholders' equity 544 434 538
---------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 4,337 $ 4,317 $ 4,000
===========================================================================
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Quarter Ended Year Ended
------------------------------------------------------------ -------------
Dec. 28, Dec. 28,
2013 2013
---------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $ 89 $ (83)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 54 236
Net loss on disposal of property, plant
and equipment 1 31
Employee stock-based compensation expense 24 91
Non-cash interest expense 7 25
Other (1) -
Changes in operating assets and liabilities:
Accounts receivable 42 (200)
Inventories 38 (322)
Prepaid expenses and other current assets 7 (11)
Other assets (143) (210)
Payable to GLOBALFOUNDRIES (130) (89)
Accounts payable, accrued liabilities and
other 33 384
------------------------------------------------------------ -------------
Net cash provided by (used in) operating
activities $ 21 $ (148)
------------------------------------------------------------ -------------
Cash flows from investing activities:
Purchases of property, plant and equipment (21) (84)
Proceeds from sale of property, plant and
equipment - 238
Purchases of available-for-sale securities (58) (1,043)
Proceeds from sale and maturity of
available-for-sale securities 375 1,344
------------------------------------------------------------ -------------
Net cash provided by investing activities $ 296 $ 455
------------------------------------------------------------ -------------
Cash flows from financing activities:
Net proceeds from foreign grants and
allowances 5 11
Proceeds from issuance of common stock 1 4
Proceeds from borrowings of secured
revolving line of credit, net 55 55
Repayments of long-term debt and capital
lease obligations (51) (55)
Other (1) (2)
------------------------------------------------------------ -------------
Net cash provided by financing activities $ 9 $ 13
------------------------------------------------------------ -------------
Net increase in cash and cash equivalents 326 320
------------------------------------------------------------ -------------
Cash and cash equivalents at beginning of
period $ 543 $ 549
------------------------------------------------------------ -------------
Cash and cash equivalents at end of period $ 869 $ 869
------------------------------------------------------------ -------------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Quarter Ended Year Ended
-------------------------------------------------------- -------------------
Dec 28, Sep. 28, Dec. 29, Dec 28, Dec. 29,
Segment and Category
Information 2013 2013 2012 2013 2012
-------------------------------------------------------- -------------------
Computing Solutions (1)
Net revenue $ 722 $ 790 $ 829 $ 3,104 $ 4,005
Operating income (loss) $ (7) $ 22 $ (323) $ (22) $ (231)
Graphics and Visual
Solutions (2)
Net revenue 865 671 326 2,193 1,417
Operating income 121 79 22 216 105
All Other (3)
Net revenue 2 - - 2 -
Operating income (loss) 21 (6) (121) (91) (930)
Total
Net revenue $ 1,589 $ 1,461 $ 1,155 $ 5,299 $ 5,422
Operating income (loss) $ 135 $ 95 $ (422) $ 103 $ (1,056)
-------------------------------------------------------- -------------------
Other Data
Depreciation and
amortization, excluding
amortization of acquired
intangible assets $ 50 $ 52 $ 62 $ 219 $ 247
Capital additions $ 21 $ 15 $ 22 $ 84 $ 133
Adjusted EBITDA (4) $ 165 $ 153 $ 30 $ 412 $ 389
Cash, cash equivalents and
marketable securities,
including long-term
marketable securities $ 1,187 $ 1,181 $ 1,183 $ 1,187 $ 1,183
Non-GAAP free cash flow
(5) $ 0 $ 6 $ (308) $ (232) $ (471)
Total assets $ 4,337 $ 4,317 $ 4,000 $ 4,337 $ 4,000
Total debt $ 2,058 $ 2,049 $ 2,042 $ 2,058 $ 2,042
Headcount 10,671 10,330 10,340 10,671 10,340
-------------------------------------------------------- -------------------
(1) Computing Solutions segment includes x86 microprocessors, as standalone
devices or as incorporated as an accelerated processing unit (APU),
chipsets, embedded processors and dense servers.
(2) Graphics and Visual Solutions segment includes graphics processing
units (GPU), including professional graphics, semi-custom products and
technology for game consoles.
(3) All Other category includes certain expenses and credits that are not
allocated to any of the operating segments. Also included in this
category are amortization of acquired intangible assets, employee
stock-based compensation expense, net restructuring and other special
charges (gains). In addition, the Company also included the following
for the indicated periods: for the fourth quarter of 2013 and for 2013,
the Company included net legal settlements; for 2012, the Company
included a charge related to the limited waiver of exclusivity from
GLOBALFOUNDRIES (GF). The Company also reported 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*
Quarter Ended Year Ended
----------------------------- -------------------
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2013 2013 2012 2013 2012
----------------------------- -------------------
GAAP operating income
(loss) $ 135 $ 95 $ (422) $ 103 (1,056)
Lower of cost or
market charge
related to GF
take-or-pay
obligation - - 273 - 273
Limited waiver of
exclusivity from
GF - - - - 703
Legal settlements,
net (48) - - (48) 5
Depreciation and
amortization 50 52 62 219 247
Employee stock-
based compensation
expense 24 23 23 91 97
Amortization of
acquired
intangible assets 4 5 4 17 14
Restructuring and
other special
charges (gains),
net - (22) 90 30 100
SeaMicro
acquisition costs - - - - 6
----------------------------- -------------------
Adjusted EBITDA $ 165 $ 153 $ 30 $ 412 $ 389
============================= ===================
(5) Non-GAAP free cash flow reconciliation**
Quarter Ended Year Ended
----------------------------- -------------------
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2013 2013 2012 2013 2012
----------------------------- -------------------
GAAP net cash
provided by (used
in) operating
activities $ 21 $ 21 $ (286) $ (148) $ (338)
Purchases of
property, plant
and equipment (21) (15) (22) (84) (133)
----------------------------- -------------------
Non-GAAP free cash
flow $ 0 $ 6 $ (308) $ (232) $ (471)
============================= ===================
* 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 fourth
quarter of 2013, the Company included adjustments for net legal
settlements; for the third quarter of 2013, the Company included
adjustments for net restructuring and other special charges (gains);
for 2013, the Company included adjustments for net legal settlements
and net restructuring and other special charges (gains); for the
fourth quarter of 2012, the Company included adjustments for the
lower of cost or market charge (LCM Charge) related to GF take-or-pay
obligation and net restructuring and other special charges (gains);
for 2012, the Company included adjustments for the LCM Charge, a
charge related to the limited waiver of exclusivity from GF, net
legal settlements, net restructuring and other special charges
(gains) and SeaMicro, Inc acquisition costs. The Company calculates
and communicates Adjusted EBITDA in the financial schedules because
the Company's management believes it is of importance to investors
and lenders in relation to its overall capital structure and its
ability to borrow additional funds. In addition, the Company presents
Adjusted EBITDA because it believes this measure assists investors in
comparing its performance across reporting periods on a consistent
basis by excluding items that the Company does not believe are
indicative of its core operating performance. The Company's
calculation of Adjusted EBITDA may or may not be consistent with the
calculation of this measure by other companies in the same industry.
Investors should not view Adjusted EBITDA as an alternative to the
GAAP operating measure of operating income (loss) or GAAP liquidity
measures of cash flows from operating, investing and financing
activities. In addition, Adjusted EBITDA does not take into account
changes in certain assets and liabilities as well as interest and
income taxes that can affect cash flows.
** The Company also presents non-GAAP free cash flow in the earnings
release as a supplemental measure of its performance. Non-GAAP free
cash flow is determined by adjusting GAAP net cash provided by (used
in) operating activities for capital expenditures. The Company
calculates and communicates non-GAAP free cash flow in the financial
schedules because the Company's management believes it is of
importance to investors to understand the nature of these cash flows.
The Company's calculation of non-GAAP free cash flow may or may not
be consistent with the calculation of this measure by other companies
in the same industry. Investors should not view non-GAAP free cash
flow as an alternative to GAAP liquidity measures of cash flows from
operating activities. The Company has provided reconciliations within
the press release and financial schedules of these non-GAAP financial
measures to the most directly comparable GAAP financial measures.
