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 AMD Reports 2014 Fourth Quarter and Annual Results
   Tuesday, January 20, 2015 4:15:34 PM ET

AMD (AMD ) today announced revenue for the fourth quarter of 2014 of $1.24 billion, operating loss of $330 million and net loss of $364 million, or $0.47 per share. Non-GAAP(1) operating income was $36 million, non-GAAP(1) net income of $2 million and breakeven non-GAAP(1) earnings per share.

GAAP Financial Results


----------------------------------------------------------------------------
               Q4-14        Q3-14      Q4-13         2014          2013
----------------------------------------------------------------------------
Revenue       $1.24B        $1.43B     $1.59B       $5.51B        $5.30B
----------------------------------------------------------------------------
Operating     $(330)M        $63M      $135M       $(155)M         $103M
income
(loss)
----------------------------------------------------------------------------
Net          $(364)M/       $17M/      $89M/       $(403)M/        $(83)M/
income       $(0.47)        $0.02      $0.12       $(0.53)         $(0.11)
(loss) /
Earnings
(loss)
per share
----------------------------------------------------------------------------


Non-GAAP Financial Results(1)


----------------------------------------------------------------------------
                  Q4-14       Q3-14       Q4-13       2014         2013
----------------------------------------------------------------------------
Revenue          $1.24B      $1.43B      $1.59B      $5.51B       $5.30B
----------------------------------------------------------------------------
Operating         $36M        $66M        $91M        $235M        $103M
income (loss)
----------------------------------------------------------------------------
Net income      $2M/$0.00  $20M/$0.03  $45M/$0.06  $51M/$0.06 $(83)M/$(0.11)
(loss) /
Earnings
(loss) per
share
----------------------------------------------------------------------------


"We made progress diversifying our business, ramping design wins and improving our balance sheet this past year despite challenges in our PC business," said Dr. Lisa Su, AMD president and CEO. "Annual Enterprise, Embedded and Semi-Custom segment revenue increased over 50% as customer demand for products powered by our high-performance compute and rich visualization solutions was strong. We continue to address channel headwinds in the Computing and Graphics segment and are taking steps to return it to a healthy trajectory beginning in the second quarter of 2015."

--  2014 Annual Results
    --  Revenue of $5.51 billion, up 4 percent year-over-year.
    --  Gross margin of 33 percent, down 4 percentage points
        year-over-year and non-GAAP(1) gross margin of 34 percent, down 3
        percentage points year-over-year.
    --  Operating loss of $155 million and non-GAAP(1) operating income of
        $235 million, compared to GAAP and non-GAAP(1) operating income of
        $103 million in 2013.
    --  Net loss of $403 million, loss per share of $0.53, and non-GAAP(1)
        net income of $51 million, non-GAAP(1) earnings per share of
        $0.06, compared to a GAAP and non-GAAP(1) net loss of $83 million,
        loss per share of $0.11 in 2013.



--  Q4 2014 Results
    --  Revenue of $1.24 billion, down 13 percent sequentially and 22
        percent year-over-year.
    --  Gross margin of 29 percent and non-GAAP(1) gross margin of 34
        percent. Gross margin was down 6 percentage points sequentially,
        primarily due to lower of cost or market inventory adjustment of
        $58 million related to our second-generation APU products.
        Non-GAAP(1) gross margin was down 1 percentage point sequentially.
        Q3 2014 gross margin of 35 percent included a $27 million, or 2
        percent, benefit from revenue related to technology licensing.
    --  Operating loss of $330 million and non-GAAP(1) operating income of
        $36 million, compared to operating income of $63 million and
        non-GAAP(1) operating income of $66 million in Q3 2014.
    --  Net loss of $364 million, loss per share of $0.47, and non-GAAP(1)
        net income of $2 million, breakeven non-GAAP(1) earnings per
        share, compared to net income of $17 million, earnings per share
        of $0.02 and non-GAAP(1) net income of $20 million, non-GAAP(1)
        earnings per share of $0.03 in Q3 2014.
    --  Cash, cash equivalents and marketable securities were $1.04
        billion at the end of the quarter, up $102 million from the end of
        the prior quarter.
    --  Total debt at the end of the quarter was $2.21 billion, flat from
        the prior quarter.



Financial Segment Summary

--  Computing and Graphics segment revenue decreased 15 percent
    sequentially and 16 percent from 2013. The sequential decrease was
    primarily due to lower desktop processor and GPU sales, and the annual
    decrease was driven by lower desktop processor and chipset sales.
    --  Operating loss was $56 million, compared with an operating loss of
        $17 million in Q3 2014 and operating loss of $15 million in Q4
        2013. The sequential and year-over-year decreases were primarily
        driven by lower channel sales partially offset by lower operating
        expenses.
    --  Client average selling price (ASP) increased sequentially and
        year-over-year primarily driven by a richer mix of notebook
        processor sales.
    --  GPU ASP increased sequentially primarily due to higher desktop and
        notebook GPU ASPs and decreased year-over-year primarily due to a
        lower channel ASP.
--  Enterprise, Embedded and Semi-Custom segment revenue decreased 11
    percent sequentially primarily driven by lower sales of semi-custom
    SoCs. Annual revenue increased 51 percent from 2013 primarily driven
    by increased sales of semi-custom SoCs.
    --  Operating income was $109 million compared with $108 million in Q3
        2014 and $129 million in Q4 2013. The year-over-year decrease was
        primarily due to lower sales of semi-custom SoCs.
--  All Other category operating loss was $383 million compared with $28
    million in Q3 2014 and operating income of $21 million in Q4 2013. The
    sequential and year-over-year decreases are primarily due to a $233
    million goodwill impairment charge, $71 million restructuring and
    other special charges, net and a $58 million lower of cost or market
    inventory adjustment.



Recent Highlights

--  Strong demand continued for AMD-based game consoles, with Microsoft
    and Sony having shipped nearly 30 million consoles to-date. Sony also
    recently announced plans to release PlayStation(R)4 in the People’s
    Republic of China.
--  AMD added "Carrizo" and "Carrizo-L" to its 2015 Mobile APU roadmap,
    giving customers a single platform that scales from high-performance
    notebook gaming PCs to mainstream laptops. With new energy efficiency
    features, next generation CPU cores and the latest GCN graphics,
    "Carrizo" will be AMD’s most advanced APU ever when it comes to market
    in the first half of 2015.
--  AMD drove continued adoption of high-performance APUs into new
    embedded markets with key new customer design wins, including:
    --  Two new solutions from QNAP, a leading provider of network
        attached storage (NAS) systems, powered by AMD’s Embedded G-Series
        SoC.
    --  Gizmosphere’s Gizmo 2, a second-generation, open source
        development board, powered by the AMD Embedded G-Series SoC, which
        offers outstanding compute and graphics performance on a single
        platform for a wide range of Linux and Windows based development
        projects.
--  AMD-based systems continued building momentum in the commercial client
    market with the adoption of AMD PRO APU-based commercial systems --
    like the HP Elite 700-Series and Lenovo ThinkCentre M79 and M78
    desktops -- by companies worldwide, including China Mobile
    Communications Corporation, Dr. Pepper Snapple Group and Telcel
    (Mexico).
--  AMD demonstrated continued progress developing the ecosystem for both
    64-bit ARM-based servers and APU-based servers targeting
    next-generation workloads, with notable developments including:
    --  SUSE Linux’s release of openSUSE version 13.2, marking the first
        generally available Linux distribution offering direct support for
        AMD’s upcoming ARM-based processor, the AMD Opteron(TM) A1100
        Series processor (codenamed "Seattle").
    --  Penguin, in collaboration with AMD, announced the first
        application optimized APU clusters, enabling seamless GPU and CPU
        memory sharing on clusters based on heterogeneous system
        architecture (HSA).
--  HP announced new HP ZBook 14 and HP ZBook 15u mobile workstations
    powered by AMD FirePro(TM) professional graphics at the 2015
    International Consumer Electronics Show.
--  AMD launched its Catalyst Omega driver suite, delivering performance
    increases of up to 19 percent on AMD Radeon(TM) graphics(2) and up
    to 29 percent on AMD APUs,(3) more than 20 new features, like Virtual
    Super Resolution, and improvements based on user feedback, as well as
    a set of new developer tools and Linux optimizations. Downloads to
    date total 8.8 million.
--  Demonstrating thought leadership in gaming and graphics, AMD
    introduced AMD FreeSync technology,(4) an innovative,
    open-standards-based screen synching technology that maximizes the
    reduction of input latency and reduces or fully eliminates stuttering
    and tearing during gaming and video playback on select AMD
    Radeon(TM) graphics cards and current and future generation APUs.
    FreeSync-enabled displays from BenQ, LG Electronics, Nixeus, Samsung
    and Viewsonic were showcased at the 2015 International Consumer
    Electronics Show and are expected to be available in market starting
    in the first quarter of 2015.
--  AMD announced, for the third straight year, research grants totaling
    more than $32 million for the development of critical technologies
    needed for extreme-scale computing in conjunction with projects
    associated with the U.S. Department of Energy (DOE). The two DOE
    awards will fund research on exascale applications for AMD APUs based
    on the open-standard HSA, as well as future memory systems to power a
    generation of exascale supercomputers.
--  AMD achieved recognition as a world leader in energy efficiency and
    compute power with AMD FirePro(TM) professional graphics being
    awarded the top spot on the Green500 List, a ranking of the world’s
    most energy-efficient supercomputers, and the AMD Opteron(TM) server
    CPU receiving the number two spot on the latest TOP500 List, a ranking
    of the 500 most powerful supercomputers in the world.



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 Q1 2015, AMD expects revenue to decrease 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 2:30 p.m. PT (5:30 p.m. ET) today to discuss its fourth quarter and annual 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)                Q4-14     Q3-14     Q4-13      2014      2013
----------------------------------------------------------------------------
GAAP gross margin          $     360 $     494 $     553 $   1,839 $   1,978
----------------------------------------------------------------------------
GAAP gross margin %              29%       35%       35%       33%       37%
----------------------------------------------------------------------------
  Lower of cost or market
   inventory adjustment    $      58         -         - $      58         -
----------------------------------------------------------------------------
Non-GAAP gross margin      $     418 $     494 $     553 $   1,897 $   1,978
----------------------------------------------------------------------------
Non-GAAP gross margin %          34%       35%       35%       34%       37%
----------------------------------------------------------------------------


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


                       -----------------------------------------------------
(Millions)               Q4-14      Q3-14     Q4-13       2014       2013
----------------------------------------------------------------------------
GAAP operating income
 (loss)                $    (330) $      63 $     135  $    (155) $     103
----------------------------------------------------------------------------
  Goodwill impairment        233          -         -        233          -
----------------------------------------------------------------------------
  Restructuring and
   other special
   charges, net               71          -         -         71         30
----------------------------------------------------------------------------
  Lower of cost or
   market inventory
   adjustment                 58          -         -         58          -
----------------------------------------------------------------------------
  Amortization of
   acquired intangible
   assets                      4          3         4         14         18
----------------------------------------------------------------------------
  Workforce rebalancing
   severance charges           -          -         -         14          -
----------------------------------------------------------------------------
  Legal settlements,
   net                         -          -       (48)         -        (48)
----------------------------------------------------------------------------
Non-GAAP operating
 income                $      36  $      66 $      91  $     235  $     103
----------------------------------------------------------------------------


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


               -------------------------------------------------------------
(Millions
 except per
 share amounts)        Q4-14                Q3-14              Q4-13
----------------------------------------------------------------------------
GAAP net income
 (loss) /
 earnings
 (loss) per
 share         $    (364) $   (0.47) $     17 $    0.02 $     89  $   0.12
----------------------------------------------------------------------------
  Goodwill
   impairment        233       0.30         -         -        -         -
----------------------------------------------------------------------------
  Restructuring
   and other
   special
   charges, net       71       0.09         -         -        -         -
----------------------------------------------------------------------------
  Lower of cost
   or market
   inventory
   adjustment         58       0.07         -         -        -         -
----------------------------------------------------------------------------
  Amortization
   of acquired
   intangible
   assets              4       0.00         3      0.00        4      0.00
----------------------------------------------------------------------------
  Workforce
   rebalancing
   severance
   charges             -          -         -         -        -         -
----------------------------------------------------------------------------
  Loss on debt
   redemption          -          -         -         -        -         -
----------------------------------------------------------------------------
  Legal
   settlements,
   net                 -          -         -         -      (48)    (0.06)
----------------------------------------------------------------------------
Non-GAAP net
 income (loss)
 / earnings
 (loss) per
 share         $       2  $    0.00  $     20 $    0.03 $     45  $   0.06
----------------------------------------------------------------------------


               -------------------------------------------
(Millions
 except per
 share amounts)        2014                  2013
----------------------------------------------------------
GAAP net income
 (loss) /
 earnings
 (loss) per
 share         $    (403) $   (0.53) $     (83) $   (0.11)
----------------------------------------------------------
  Goodwill
   impairment        233       0.30          -          -
----------------------------------------------------------
  Restructuring
   and other
   special
   charges, net       71       0.09         30       0.04
----------------------------------------------------------
  Lower of cost
   or market
   inventory
   adjustment         58       0.07          -          -
----------------------------------------------------------
  Amortization
   of acquired
   intangible
   assets             14       0.02         18       0.02
----------------------------------------------------------
  Workforce
   rebalancing
   severance
   charges            14       0.02          -          -
----------------------------------------------------------
  Loss on debt
   redemption         64       0.08          -          -
----------------------------------------------------------
  Legal
   settlements,
   net                 -          -        (48)     (0.06)
----------------------------------------------------------
Non-GAAP net
 income (loss)
 / earnings
 (loss) per
 share         $      51  $    0.06  $     (83) $   (0.11)
----------------------------------------------------------


About AMD

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

Cautionary Statement

This earnings press release and the conference call remarks contain forward-looking statements concerning AMD; its expected first quarter of 2015 revenue; the trajectory of the Computing and Graphics segment; and the features, functionality and availability of its future products, 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 the completion and impact of the 2014 restructuring plan and AMD’s transformation initiatives could adversely affect AMD; 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 September 27, 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, non-GAAP net income (loss), non-GAAP earnings (loss) per share and non-GAAP gross margin. 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. 2. Intel Core i7 4690X with 16GB DDR3-1866, AMD Radeon(TM) R9 290X Windows 8.1 64-bit comparing launch drivers 13.12 and 14.501. All tests run at 3840x2160. Bioshock Infinite @ ultra scored 30.47 vs 36.24. 3. AMD A10 7850K with R7 graphics, 2x4GB DDR3 2400, Windows 8.1 64-bit comparing Catalyst drivers 14.2 and 14.50. In Batman Arkham Origins @ 1080P, PHYSX=off GEOMETRYDETAIL=normal DYNAMICSHADOWS=normal MOTIONBLUR=off DOF=normal DISTORTION=off LENSFLARES=off LIGHTSHAFTS=off REFLECTIONS=off AO=normal we see an uplift from 34.96FPS to 45.2FPS. 4. FreeSync is an AMD technology designed to reduce or eliminate screen tears in games and videos by allowing the monitor’s refresh rate to be controlled by and synchronized to the Radeon R-series graphics card or APU Radeon R-series graphics. Requires DisplayPort 1.2a compliant monitors that support DisplayPort Adaptive-Sync and an AMD desktop 2014 A-series APU with Radeon R-series graphics, with forthcoming FreeSync-enabled driver. Support for use with multiple monitors planned. Confirm supported technologies with system manufacturer before purchase.



ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)

                                Three Months Ended           Year Ended
                           ----------------------------  ------------------
                           Dec. 27,  Sep. 27,  Dec. 28,  Dec. 27,  Dec. 28,
                             2014      2014      2013      2014      2013

                           --------  --------  --------  --------  --------

Net revenue                $  1,239  $  1,429  $  1,589  $  5,506  $  5,299

Cost of sales                   879       935     1,036     3,667     3,321

                           --------  --------  --------  --------  --------

Gross margin                    360       494       553     1,839     1,978

Gross margin %                   29%       35%       35%       33%       37%

Research and development        238       278       293     1,072     1,201

Marketing, general and
 administrative                 144       150       169       604       674

Amortization of acquired
 intangible assets                4         3         4        14        18

Restructuring and other
 special charges, net            71         -         -        71        30

Goodwill impairment charge      233         -         -       233         -

Legal settlements, net            -         -       (48)        -       (48)

                           --------  --------  --------  --------  --------

Operating income (loss)        (330)       63       135      (155)      103

Interest income                   1         1         1         3         5
Interest expense                (41)      (43)      (44)     (177)     (177)
Other income (expense),
 net                              3        (2)       (2)      (69)       (5)

                           --------  --------  --------  --------  --------

Income (loss) before
 income taxes                  (367)       19        90      (398)      (74)

Provision (benefit) for
 income taxes                    (3)        2         1         5         9

                           --------  --------  --------  --------  --------

Net income (loss)          $   (364) $     17  $     89  $   (403) $    (83)
                           ========  ========  ========  ========  ========


Net income (loss) per
 share

  Basic                    $  (0.47) $   0.02  $   0.12  $  (0.53) $  (0.11)

  Diluted                  $  (0.47) $   0.02  $   0.12  $  (0.53) $  (0.11)

                           --------  --------  --------  --------  --------

Shares used in per share
 calculations

  Basic                         776       770       759       768       754

  Diluted                       776       785       766       768       754

                           --------  --------  --------  --------  --------



ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Millions)

                                Three Months Ended           Year Ended
                           ----------------------------  ------------------
                           Dec. 27,  Sep. 27,  Dec. 28,  Dec. 27,  Dec. 28,
                             2014      2014      2013      2014      2013

                           --------  --------  --------  --------  --------

Total comprehensive income
 (loss)                    $   (368) $     15  $     89  $   (406) $    (82)
                           --------  --------  --------  --------  --------



ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)

                                               --------  --------  --------
                                               Dec. 27,  Sep. 27,  Dec. 28,
                                                 2014      2014      2013

                                               --------  --------  --------

Assets

Current assets:
  Cash and cash equivalents                    $    805  $    640  $    869
  Marketable securities                             235       298       228
  Accounts receivable, net                          818       973       832
  Inventories, net                                  685       897       884
  Prepaid expenses and other current assets         193       212        71

                                               --------  --------  --------

      Total current assets                        2,736     3,020     2,884

Long-term marketable securities                       -         -        90
Property, plant and equipment, net                  302       328       346
Acquisition related intangible assets, net           65        69        78
Goodwill                                            320       553       553
Other assets                                        344       355       386
                                               --------  --------  --------

Total Assets                                   $  3,767  $  4,325  $  4,337
                                               ========  ========  ========

Liabilities and Stockholders’ Equity

Current liabilities:
  Short-term debt                              $    177  $    102  $     60
  Accounts payable                                  421       498       519
  Payable to GLOBALFOUNDRIES                        212       317       364
  Accrued and other current liabilities             558       555       530
  Deferred income on shipments to distributors       72        94       145

                                               --------  --------  --------

      Total current liabilities                   1,440     1,566     1,618

Long-term debt                                    2,035     2,106     1,998
Other long-term liabilities                         105       118       177

Stockholders’ equity:
  Capital stock:
    Common stock, par value                           8         8         7
    Additional paid-in capital                    6,949     6,928     6,894
    Treasury stock, at cost                        (119)     (118)     (112)
  Accumulated deficit                            (6,646)   (6,282)   (6,243)
  Accumulated other comprehensive loss               (5)       (1)       (2)

                                               --------  --------  --------

      Total stockholders’ equity                    187       535       544

                                               --------  --------  --------

Total Liabilities and Stockholders’ Equity     $  3,767  $  4,325  $  4,337
                                               ========  ========  ========



ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
                                                        Three
                                                       Months
                                                        Ended    Year Ended
                                                     ----------  ----------
                                                      Dec. 27,    Dec. 27,
                                                        2014        2014

                                                     ----------  ----------

Cash flows from operating activities:
  Net Loss                                           $     (364) $     (403)
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
    Depreciation and amortization                            48         203
    Employee stock-based compensation expense                16          81
    Non-cash interest expense                                 6          17
    Net (gain) loss on debt redemptions                      (3)         61
    Goodwill impairment charge                              233         233
    Restructuring and other special charges, net             14          14
    Other                                                    (4)        (13)
  Changes in operating assets and liabilities:
    Accounts receivable                                     151           7
    Inventories                                             213         199
    Prepaid expenses and other assets                        36        (120)
    Payable to GLOBALFOUNDRIES                             (106)       (153)
    Accounts payable, accrued liabilities and other        (124)       (224)
                                                     ----------  ----------
Net cash provided by (used in) operating activities  $      116  $      (98)
                                                     ----------  ----------

Cash flows from investing activities:
  Purchases of property, plant and equipment                (22)        (95)
  Purchases of available-for-sale securities               (144)       (790)
  Proceeds from the sales and maturities of
   available-for-sale securities                            209         873
                                                     ----------  ----------
Net cash provided by (used in) investing activities  $       43  $      (12)
                                                     ----------  ----------

Cash flows from financing activities:
  Net proceeds from grants and allowances            $        3  $        8
  Proceeds from issuance of common stock                      -           4
  Proceeds from borrowings, net                              75       1,155
  Repayments of long-term debt and capital lease
   obligations                                              (72)     (1,115)
  Other                                                       -          (6)
                                                     ----------  ----------
Net cash provided by financing activities            $        6  $       46
                                                     ----------  ----------
Net increase (decrease) in cash and cash equivalents        165         (64)
                                                     ----------  ----------
Cash and cash equivalents at beginning of period     $      640  $      869
                                                     ----------  ----------
Cash and cash equivalents at end of period           $      805  $      805
                                                     ----------  ----------



ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)


                               Three Months Ended            Year Ended
-------------------------------------------------------  -------------------

Segment and Category      Dec. 27,  Sep. 27,  Dec. 28,   Dec. 27,  Dec. 28,
 Information                2014      2014      2013       2014      2013

-------------------------------------------------------  -------------------

  Computing and Graphics
   (1)
    Net revenue           $    662  $    781  $    888   $  3,132  $  3,720
    Operating loss        $    (56) $    (17) $    (15)  $    (76) $   (101)

  Enterprise, Embedded
   and Semi-Custom (2)
    Net revenue                577       648       699      2,374     1,577
    Operating income           109       108       129        399       295

  All Other (3)
    Net revenue                  -         -         2          -         2
    Operating income
     (loss)                   (383)      (28)       21       (478)      (91)

  Total
    Net revenue           $  1,239  $  1,429  $  1,589   $  5,506  $  5,299
    Operating income
     (loss)               $   (330) $     63  $    135   $   (155) $    103

-------------------------------------------------------  -------------------

Other Data

  Depreciation and
   amortization,
   excluding amortization
   of acquired intangible
   assets                 $     44  $     46  $     50   $    189  $    218
  Capital additions       $     22  $     29  $     21   $     95  $     84
  Adjusted EBITDA (4)     $     96  $    133  $    165   $    505  $    412
  Cash, cash equivalents
   and marketable
   securities, including
   long-term marketable
   securities             $  1,040  $    938  $  1,187   $  1,040  $  1,187
  Non-GAAP free cash flow
   (5)                    $     94  $    (11) $      0   $   (193) $   (232)
  Total assets            $  3,767  $  4,325  $  4,337   $  3,767  $  4,337
  Total debt              $  2,212  $  2,208  $  2,058   $  2,212  $  2,058
  Headcount                  9,687    10,149    10,671      9,687    10,671

-------------------------------------------------------  -------------------

(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, dense servers, 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 for the indicated periods: for fourth quarter of
    2014, the Company included a goodwill impairment, net restructuring and
    other special charges and a lower of cost or market inventory
    adjustment; for 2014, the Company included a goodwill impairment, net
    restructuring and other special charges, a lower of cost or market
    inventory adjustment, loss on debt repurchase and workforce rebalancing
    severance charges; for the fourth quarter of 2013, the Company included
    net legal settlements; and for 2013, the Company included net
    restructuring and other special charges and net legal settlements.

(4) Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
                                Three Months Ended           Year Ended
                           ----------------------------  ------------------
                           Dec. 27,  Sep. 27,  Dec. 28,  Dec. 27,  Dec. 28,
                             2014      2014      2013      2014      2013
                           --------  --------  --------  --------  --------
    GAAP operating income
     (loss)                $   (330) $     63  $    135  $   (155) $    103
      Goodwill impairment       233         -         -       233         -
        Restructuring and
         other special
         charges, net            71         -         -        71        30
        Lower of cost or
         market inventory
         adjustment              58         -         -        58         -
        Employee stock-
         based
         compensation
         expense                 16        21        24        81        91
        Amortization of
         acquired
         intangible assets        4         3         4        14        18
        Depreciation and
         amortization            44        46        50       189       218
      Workforce
       rebalancing
       severance charges          -         -         -        14         -
        Legal settlements,
         net                      -         -       (48)        -       (48)
                           --------  --------  --------  --------  --------
    Adjusted EBITDA        $     96  $    133  $    165  $    505  $    412
                           ========  ========  ========  ========  ========


(5) Non-GAAP free cash flow reconciliation**
                                Three Months Ended           Year Ended
                           ----------------------------  ------------------
                           Dec. 27,  Sep. 27,  Dec. 28,  Dec. 27,  Dec. 28,
                             2014      2014      2013      2014      2013
                           --------  --------  --------  --------  --------
    GAAP net cash provided
     by (used in)
     operating activities  $    116  $     18  $     21  $    (98) $   (148)
      Purchases of
       property, plant and
       equipment                (22)      (29)      (21)      (95)      (84)
                           --------  --------  --------  --------  --------
    Non-GAAP free cash
     flow                  $     94  $    (11) $      0  $   (193) $   (232)
                           ========  ========  ========  ========  ========


    * 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 fourth quarter of 2014, the
    Company included an adjustment for goodwill impairment, net
    restructuring and other special charges and lower of cost or market
    inventory adjustment; for 2014, the Company included an adjustment for
    goodwill impairment, net restructuring and other special charges, lower
    of cost or market inventory adjustment and workforce rebalancing
    severance charges; for the fourth quarter of 2013, the Company included
    an adjustment for net legal settlements; and for 2013, the Company
    included adjustments for net restructuring and other special charges
    and net legal settlements. 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 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.


SOURCE: Advanced Micro Devices




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