AMD Reports 2016 Third Quarter Results
GAAP Financial Results | ||||||
Q3-16 | Q2-16 | Q3-15 | ||||
Revenue | \\$1,307M | \\$1,027M | \\$1,061M | |||
Operating loss | \\$(293)M | \\$(8)M | \\$(158)M | |||
Net income (loss) / earnings (loss) per share | \\$(406)M/\\$(0.50) | \\$69M/\\$0.08 | \\$(197)M/\\$(0.25) | |||
Non-GAAP Financial Results(1) | ||||||
Q3-16 | Q2-16 | Q3-15 | ||||
Revenue | \\$1,307M | \\$1,027M | \\$1,061M | |||
Operating income (loss) | \\$70M | \\$3M | \\$(97)M | |||
Net income (loss) / earnings (loss) per share | \\$27M/\\$0.03 | \\$(40)M/\\$(0.05) | \\$(136)M/\\$(0.17) | |||
"Our third quarter financial results highlight the progress we are making across our business," said
Lisa Su, AMD president and CEO. "We now expect to deliver higher 2016 annual revenue based on stronger demand for AMD semi-custom solutions and Polaris GPUs. This positions us well to accelerate our growth in 2017 as we introduce new high-performance computing and graphics products."
Q3 2016 Results
- Q3 2016, Q2 2016, and Q3 2015 were 13-week fiscal quarters.
- Revenue of
\\$1,307 million , up 27 percent sequentially and up 23 percent year-over-year primarily due to record semi-custom SoC and higher GPU and mobile APU sales, partially offset by client desktop processor and chipset sales. - Gross margin was 5 percent, down from 31 percent from the previous quarter due to a
\\$340 million charge related to the 6th amendment to the Wafer Supply Agreement (WSA) withGLOBALFOUNDRIES (GF). Non-GAAP gross margin of 31 percent was flat quarter-over-quarter. - Operating expenses of
\\$376 million , compared to\\$353 million for the prior quarter. Non-GAAP operating expenses of\\$353 million , compared to non-GAAP operating expenses of\\$342 million in Q2 2016, driven by increased investments in research and development. - Operating loss of
\\$293 million , compared to an operating loss of\\$8 million in Q2 2016 due to a\\$340 million WSA charge. Non-GAAP(1) operating income of\\$70 million , compared to non-GAAP(1) operating income of\\$3 million in Q2 2016, primarily due to higher revenue. - Net loss of
\\$406 million , net loss per share of\\$0.50 , compared to net income of\\$69 million , net earnings per share of\\$0.08 in Q2 2016. The decline was driven by a\\$340 million WSA charge and a\\$61 million loss on debt redemption offset by increased revenue. Q2 2016 net income included a\\$150 million pre-tax gain on the sale of 85 percent of assembly, test, mark, and pack (ATMP) facilities toNantong Fujitsu Microelectronics (NFME). - Non-GAAP(1) net income of
\\$27 million , non-GAAP(1) earnings per share of\\$0.03 . This compares to non-GAAP(1) net loss of\\$40 million and non-GAAP(1) loss per share of\\$0.05 in Q2 2016, primarily due to increased revenue in Q3 2016. - Cash and cash equivalents were
\\$1,258 million at the end of the quarter, up\\$301 million from the end of the prior quarter. The quarter-end cash balance includes approximately\\$274 million of net proceeds from recent capital markets transactions. - Total debt at the end of the quarter was
\\$1,632 million , down\\$606 million from the prior quarter as a result of the timing and execution of Q3 2016 debt reduction actions and due to bifurcation of the newly issued 2.125 percent Convertible Notes due 2026 into equity and liability components based on GAAP accounting regulations. We plan to further reduce debt by deploying a significant portion of the remaining cash from our capital markets transactions.
Financial Segment Summary
- Computing and Graphics segment revenue of
\\$472 million increased 9 percent sequentially and 11 percent from Q3 2015. The sequential and year-over-year increases were driven primarily by increased sales of GPUs, offset by decreased sales of client desktop processors and chipsets. The year-over-year increase was also driven by increased sales of client mobile processors.- Operating loss was
\\$66 million , compared with an operating loss of\\$81 million in Q2 2016 and an operating loss of\\$181 million in Q3 2015. The sequential improvement was driven primarily by higher GPU revenue, and the year-over-year improvement was primarily due to higher GPU revenue and the absence of an inventory write-down charge.
- Client average selling price (ASP) decreased sequentially driven by lower mobile and desktop processor ASPs and was flat year-over-year.
- GPU ASP increased sequentially and year-over-year driven by higher channel and professional graphics ASPs.
- Operating loss was
- Enterprise, Embedded and Semi-Custom segment revenue of
\\$835 million increased 41 percent sequentially and 31 percent year-over-year due to higher sales of semi-custom SoCs.
- Operating income was
\\$136 million compared with\\$84 million in Q2 2016 and\\$84 million in Q3 2015. The sequential improvement was primarily due to higher revenue and the year-over-year improvement was primarily due to higher revenue and a\\$24 million IP licensing gain.
- Operating income was
- All Other category operating loss was
\\$363 million in Q3 2016 compared with\\$11 million in Q2 2016 and\\$61 million in Q3 2015. The sequential increase was primarily driven by a\\$340 million WSA charge.
Q3 2016 Highlights
- AMD completed capital markets transactions that raised approximately
\\$1.4 billion in cash, before issuance costs, to lower overall debt, reduce interest expense payments, and further support growing business opportunities. - AMD announced a five-year amendment to the WSA with GF that strengthens the strategic partnership, while providing AMD with flexibility in sourcing foundry services and greater financial predictability.
- AMD disclosed new details about its upcoming high-performance x86 "Zen" core architecture and "Zen"-based products, including:
- A public preview of the competitive performance of the "Zen"-based "Summit Ridge" desktop processor,
- A first look at "
Naples ," its "Zen"-based 32-core, 64-thread server product, and
- A detailed technical overview of the new grounds-up "Zen" core architecture at the 28th annual Hot Chips conference.
- A public preview of the competitive performance of the "Zen"-based "Summit Ridge" desktop processor,
- AMD expanded its family of mainstream and workstation class graphics based on its new Polaris architecture based on 14nm FinFET technology.
- Launched the new Radeon™ RX 470 GPU, enabling exceptional HD gaming, true asynchronous compute, and support for high dynamic range (HDR) monitors.
- Launched the Radeon™ RX 460 GPU for eSports gamers who demand pristine HD gaming, smooth beyond-HD streaming capabilities, and an assortment of future-ready gaming technologies.
- Unveiled the new Radeon™ Pro WX Series of professional graphics cards, a set of new solutions to address modern content creation and engineering.
- Introduced the upcoming Radeon™ Pro SSG (Solid State Graphics), a new Radeon™ Pro solution with 1 terabyte of dedicated memory designed for large dataset applications, which will be available initially as a developer kit.
- Launched the new Radeon™ RX 470 GPU, enabling exceptional HD gaming, true asynchronous compute, and support for high dynamic range (HDR) monitors.
- Customer adoption of Radeon™ RX GPUs expanded with notable gaming PC design wins with HP and Alienware.
- HP announced support for the Radeon™ RX 400-Series graphics cards and introduced the HP OMEN X, a fully customizable enthusiast gaming desktop PC designed for top-end gaming and superior VR experiences that can accommodate up to two Radeon™ R9 Fury X graphics cards.
- Alienware introduced its latest line of premium gaming laptops, including the new Alienware 15 and new Alienware 17 available with the future-proof2 Radeon™ RX 470 graphics card.
- HP announced support for the Radeon™ RX 400-Series graphics cards and introduced the HP OMEN X, a fully customizable enthusiast gaming desktop PC designed for top-end gaming and superior VR experiences that can accommodate up to two Radeon™ R9 Fury X graphics cards.
- AMD continued to gain momentum in virtual reality (VR) with the introduction of the most affordable VR-ready PC to-date, the limited edition CyberPowerPC, featuring the AMD FX 4350 processor and Radeon™ RX 470 graphics. Priced at
\\$499 standalone or\\$999 when bundled with the Oculus Rift headset.
- AMD strengthened its GPUOpen initiative with the addition of AMD TrueAudio Next and Radeon™ ProRender.
- TrueAudio Next is an API that lets developers leverage the GPU for audio rendering, allowing developers and sound designers to add physics-based environmental audio to games and VR apps across platforms.
- Radeon™ ProRender is an open source professional GPU-optimized photorealistic renderer that gives developers access to the source code and enables creators to bring ideas to life through high-performance applications and workflows enhanced by photorealistic rendering.
- TrueAudio Next is an API that lets developers leverage the GPU for audio rendering, allowing developers and sound designers to add physics-based environmental audio to games and VR apps across platforms.
- AMD announced the availability of new consumer and commercial desktop systems based on 7th Generation AMD APUs and the new AM4 platform.
- The AMD AM4 socket is a new unified infrastructure that supports both 7th Generation AMD A-Series APUs and the upcoming "Zen"-based high-performance "Summit Ridge" AMD desktop CPU. AM4 platforms feature DDR4 Memory and next-gen I/O and peripheral support, including PCIe® Gen 3, USB 3.1 Gen 2, NVMe, and SATA Express.
- AMD 7th Generation APU-based consumer desktop systems are now available from HP, with other global OEM designs to follow.
- The commercial-focused HP EliteDesk 705 G3 Series desktops feature the new 7th Generation AMD PRO APUs.
- AMD 7th Generation AMD PRO APUs deliver up to 14 percent more compute and 22 percent more graphic performance, and are 32 percent more energy efficient than the previous generation3, while providing a secure and stable platform to protect customers' IT investments.
- AMD 7th Generation AMD PRO APUs deliver up to 14 percent more compute and 22 percent more graphic performance, and are 32 percent more energy efficient than the previous generation3, while providing a secure and stable platform to protect customers' IT investments.
- The AMD AM4 socket is a new unified infrastructure that supports both 7th Generation AMD A-Series APUs and the upcoming "Zen"-based high-performance "Summit Ridge" AMD desktop CPU. AM4 platforms feature DDR4 Memory and next-gen I/O and peripheral support, including PCIe® Gen 3, USB 3.1 Gen 2, NVMe, and SATA Express.
Sony announced a new, thinner and lighter PS4, as well as the PS4 Pro with support for 4K gameplay, both powered by AMD semi-custom SoCs.
- AMD announced two new, Polaris-based Embedded Radeon™ discrete GPU products with 4K and 3D support -- the E9260 and E9550 -- targeting medical imaging, digital signage and casino gaming applications, among others.
- AMD reinforced its commitment to open standards by participating in three consortia with the overarching goal of bringing open standards to future servers and datacenters through high-performance interconnect technologies. Other technology leaders taking part in these consortia include Dell EMC,
Google , HPE,IBM ,Lenovo ,Qualcomm ,Samsung andXilinx .
- AMD was recognized for its commitment to corporate responsibility by receiving the Catalyst Award by the
Green Electronics Council for its 25x20 Energy Efficiency Initiative and being named to the Dow Jones Sustainability Index for the 15th consecutive year.
Current Outlook
AMD's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.
For Q4 2016, AMD expects revenue to decrease 18 percent sequentially, plus or minus 3 percent. The midpoint of guidance would result in Q4 2016 revenue increasing approximately 12 percent year-over-year and 2016 revenue increasing 6 percent from 2015.
For additional details regarding AMD's results and outlook please see the CFO commentary posted at quarterlyearnings.amd.com.
AMD Teleconference
AMD will hold a conference call for the financial community at
Reconciliation of GAAP to Non-GAAP Gross Margin | |||||||||||||
(Millions except percentages) | Q3-16 | Q2-16 | Q3-15 | ||||||||||
GAAP Gross Margin | \\$ | 59 | \\$ | 319 | \\$ | 239 | |||||||
GAAP Gross Margin % | 5 | % | 31 | % | 23 | % | |||||||
Charge related to the sixth amendment to the WSA with GF | 340 | - | - | ||||||||||
Non-GAAP Gross Margin | \\$ | 399 | \\$ | 319 | \\$ | 239 | |||||||
Non-GAAP Gross Margin % | 31 | % | 31 | % | 23 | % | |||||||
Reconciliation of GAAP to Non-GAAP Operating Expenses | |||||||||||||
(Millions) | Q3-16 | Q2-16 | Q3-15 | ||||||||||
GAAP operating expenses | \\$ | 376 | \\$ | 353 | \\$ | 397 | |||||||
Restructuring and other special charges, net | - | (7 | ) | 48 | |||||||||
Stock-based compensation | 23 | 18 | 13 | ||||||||||
Non-GAAP operating expenses | \\$ | 353 | \\$ | 342 | \\$ | 336 | |||||||
Reconciliation of GAAP Operating loss to Non-GAAP Operating Income (loss) | |||||||||||||
(Millions) | Q3-16 | Q2-16 | Q3-15 | ||||||||||
GAAP operating loss | \\$ | (293 | ) | \\$ | (8 | ) | \\$ | (158 | ) | ||||
Charge related to the sixth amendment to the WSA with GF | 340 | - | - | ||||||||||
Restructuring and other special charges, net | - | (7 | ) | 48 | |||||||||
Stock-based compensation | 23 | 18 | 13 | ||||||||||
Non-GAAP operating income (loss) | \\$ | 70 | \\$ | 3 | \\$ | (97 | ) | ||||||
Reconciliation of GAAP to Non-GAAP Net Income (Loss)/Income (Loss) per Share | |||||||||||||||||||||||||
(Millions except per share amounts) | Q3-16 | Q2-16 | Q3-15 | ||||||||||||||||||||||
GAAP net income (loss) /income (loss) per share | \\$ | (406 | ) | \\$ | (0.50 | ) | \\$ | 69 | \\$ | 0.08 | \\$ | (197 | ) | \\$ | (0.25 | ) | |||||||||
Charge related to the sixth amendment to the WSA with GF | 340 | 0.39 | - | - | - | - | |||||||||||||||||||
Loss on debt redemption | 61 | 0.07 | - | - | - | - | |||||||||||||||||||
Non-cash interest expense related to convertible debt | 1 | - | - | - | - | - | |||||||||||||||||||
Restructuring and other special charges, net | - | - | (7 | ) | (0.01 | ) | 48 | 0.06 | |||||||||||||||||
Stock-based compensation | 23 | 0.03 | 18 | 0.02 | 13 | 0.02 | |||||||||||||||||||
Gain on sale of 85% of ATMP JV | 4 | - | (150 | ) | (0.19 | ) | - | - | |||||||||||||||||
Equity in income (loss) of ATMP JV | 5 | 0.01 | 3 | - | - | - | |||||||||||||||||||
Tax provision (benefit) related to sale of 85% of ATMP JV | (1 | ) | - | 27 | 0.03 | - | - | ||||||||||||||||||
Non-GAAP net income (loss)/ income (loss) per share | \\$ | 27 | \\$ | 0.03 | \\$ | (40 | ) | \\$ | (0.05 | ) | \\$ | (136 | ) | \\$ | (0.17 | ) | |||||||||
About AMD
For more than 45 years, AMD has driven innovation in high-performance computing, graphics, and visualization technologies -- the building blocks for gaming, immersive platforms, and the datacenter. Hundreds of millions of consumers, leading Fortune 500 businesses, and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work, and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog,
Cautionary Statement
This press release contains forward-looking statements concerning
AMD, the AMD Arrow logo, Catalyst, FirePro, Radeon, and combinations thereof, are trademarks of
1. | In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this earnings press release. AMD also provided adjusted EBITDA and non-GAAP free cash flow as supplemental measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the CFO Commentary. | |
2. | Statement of "future-proof" refers to support of current and upcoming technology standards including 14nm FinFET process technology, DirectX®12 and Vulkan™ API support, new display technology, and experiences such as VR. "Future-proof" statement is not meant to serve as a warranty or indicate that users will never have to upgrade their graphics technology again. Support of current and upcoming technology standards described above has the potential to reduce frequency of graphics upgrades for some users. | |
3. | Testing by AMD Performance labs. PC manufacturers may vary configurations yielding different results. 3DMark 11 Performance is used to simulate graphics performance, and Cinebench R11.5 1T Performance is used to simulate single threaded CPU performance; the 7th Generation AMD PRO A12-9800 at 65W scored 3521.25 and 1.21 while the AMD PRO A10-8850B at 95W scored 2880 and 1.06 respectively. CPU Performance improvement: 1.21/1.06=1.14X or 14% more, Graphic Performance improvement: 3521.25/2880=1.22X or 22% more, Power Consumption improvement: (95W-65W)/95W=0.32X or 32% less. BRPD-4 | |
ADVANCED MICRO DEVICES, INC. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(Millions except per share amounts and percentages) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | June 25, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||||||||||||||||
Net revenue | \\$ | 1,307 | \\$ | 1,027 | \\$ | 1,061 | \\$ | 3,166 | \\$ | 3,033 | |||||||||||
Cost of sales | 1,248 | 708 | 822 | 2,519 | 2,236 | ||||||||||||||||
Gross margin | 59 | 319 | 239 | 647 | 797 | ||||||||||||||||
Gross margin % | 5 | % | 31 | % | 23 | % | 20 | % | 26 | % | |||||||||||
Research and development | 259 | 243 | 241 | 744 | 718 | ||||||||||||||||
Marketing, general and administrative | 117 | 117 | 108 | 339 | 373 | ||||||||||||||||
Amortization of acquired intangible assets | - | - | - | - | 3 | ||||||||||||||||
Restructuring and other special charges, net | - | (7 | ) | 48 | (10 | ) | 135 | ||||||||||||||
Licensing gain | (24 | ) | (26 | ) | - | (57 | ) | - | |||||||||||||
Operating loss | (293 | ) | (8 | ) | (158 | ) | (369 | ) | (432 | ) | |||||||||||
Interest expense | (41 | ) | (41 | ) | (39 | ) | (122 | ) | (119 | ) | |||||||||||
Other income (expense), net | (63 | ) | 150 | - | 87 | (3 | ) | ||||||||||||||
Income (loss) before equity loss and income taxes | (397 | ) | 101 | (197 | ) | (404 | ) | (554 | ) | ||||||||||||
Provision for income taxes | 4 | 29 | - | 34 | 4 | ||||||||||||||||
Equity in income (loss) of ATMP JV | (5 | ) | (3 | ) | - | (8 | ) | - | |||||||||||||
Net income (loss) | \\$ | (406 | ) | \\$ | 69 | \\$ | (197 | ) | \\$ | (446 | ) | \\$ | (558 | ) | |||||||
Net income (loss) per share | |||||||||||||||||||||
Basic | \\$ | (0.50 | ) | \\$ | 0.09 | \\$ | (0.25 | ) | \\$ | (0.56 | ) | \\$ | (0.72 | ) | |||||||
Diluted | \\$ | (0.50 | ) | \\$ | 0.08 | \\$ | (0.25 | ) | \\$ | (0.56 | ) | \\$ | (0.72 | ) | |||||||
Shares used in per share calculation | |||||||||||||||||||||
Basic | 815 | 794 | 785 | 801 | 780 | ||||||||||||||||
Diluted | 815 | 821 | 785 | 801 | 780 | ||||||||||||||||
ADVANCED MICRO DEVICES, INC. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||
(Millions) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | June 25, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||||||||||||||||
Total comprehensive income (loss) | \\$ | (406 | ) | \\$ | 72 | \\$ | (207 | ) | \\$ | (441 | ) | \\$ | (568 | ) | |||||||
ADVANCED MICRO DEVICES, INC. | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (1) (2) | ||||||||||||||
(Millions) | ||||||||||||||
September 24, 2016 |
June 25, 2016 |
December 26, 2015 |
||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | \\$ | 1,258 | \\$ | 957 | \\$ | 785 | ||||||||
Accounts receivable, net | 640 | 671 | 533 | |||||||||||
Inventories, net | 772 | 743 | 678 | |||||||||||
Prepayment and other - GLOBALFOUNDRIES | 13 | 12 | 33 | |||||||||||
Prepaid expenses | 63 | 68 | 43 | |||||||||||
Other current assets | 78 | 55 | 248 | |||||||||||
Total current assets | 2,824 | 2,506 | 2,320 | |||||||||||
Property, plant and equipment, net | 161 | 169 | 188 | |||||||||||
Goodwill | 289 | 289 | 278 | |||||||||||
Investment in ATMP JV | 60 | 62 | - | |||||||||||
Other assets | 282 | 290 | 298 | |||||||||||
Total Assets | \\$ | 3,616 | \\$ | 3,316 | \\$ | 3,084 | ||||||||
Liabilities and Stockholders' Equity (Deficit) | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term debt | \\$ | - | \\$ | 226 | \\$ | 230 | ||||||||
Accounts payable | 582 | 616 | 279 | |||||||||||
Payable to GLOBALFOUNDRIES | 284 | 94 | 245 | |||||||||||
Payable to ATMP JV | 144 | 150 | - | |||||||||||
Accrued liabilities | 384 | 392 | 472 | |||||||||||
Other current liabilities | 25 | 61 | 124 | |||||||||||
Deferred income on shipments to distributors | 54 | 42 | 53 | |||||||||||
Total current liabilities | 1,473 | 1,581 | 1,403 | |||||||||||
Long-term debt, net | 1,632 | 2,012 | 2,007 | |||||||||||
Other long-term liabilities | 126 | 136 | 86 | |||||||||||
Stockholders' equity (deficit): | ||||||||||||||
Capital stock: | ||||||||||||||
Common stock, par value | 9 | 8 | 8 | |||||||||||
Additional paid-in capital | 8,258 | 7,053 | 7,017 | |||||||||||
Treasury stock, at cost | (127 | ) | (125 | ) | (123 | ) | ||||||||
Accumulated deficit | (7,752 | ) | (7,346 | ) | (7,306 | ) | ||||||||
Accumulated other comprehensive loss | (3 | ) | (3 | ) | (8 | ) | ||||||||
Total Stockholders' equity (deficit) | 385 | (413 | ) | (412 | ) | |||||||||
Total Liabilities and Stockholders' Equity (Deficit) | \\$ | 3,616 | \\$ | 3,316 | \\$ | 3,084 | ||||||||
(1) | Amounts reflected adoption of FASB ASU 2015-17, Balance Sheet Classification of Deferred Taxes beginning in the first quarter of 2016. |
(2) | Amounts reflected adoption of FASB ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs beginning in the first quarter of 2016. |
ADVANCED MICRO DEVICES, INC. | ||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||
(Millions) | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
September 24, 2016 |
September 24, 2016 |
|||||||||
Cash flows from operating activities: | ||||||||||
Net loss | \\$ | (406 | ) | \\$ | (446 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
Net gain on sale of equity interests in ATMP JV | 4 | (146 | ) | |||||||
Equity in loss of ATMP JV | 2 | 1 | ||||||||
Depreciation and amortization | 33 | 99 | ||||||||
Provision for deferred income taxes | - | 11 | ||||||||
Stock-based compensation expense | 23 | 57 | ||||||||
Non-cash interest expense | 4 | 11 | ||||||||
Loss on debt redemption | 61 | 61 | ||||||||
Fair value of warrant issued related to sixth amendment to the WSA | 240 | 240 | ||||||||
Other | 1 | (5 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 31 | (107 | ) | |||||||
Inventories | (28 | ) | (94 | ) | ||||||
Prepayment and other - GLOBALFOUNDRIES | (1 | ) | 20 | |||||||
Prepaid expenses and other assets | (17 | ) | (134 | ) | ||||||
Payable to ATMP JV | (6 | ) | 144 | |||||||
Payable to GLOBALFOUNDRIES | 190 | 39 | ||||||||
Accounts payable, accrued liabilities and other | (102 | ) | 151 | |||||||
Net cash provided by (used in) operating activities | \\$ | 29 | \\$ | (98 | ) | |||||
Cash flows from investing activities: | ||||||||||
Purchases of property, plant and equipment | (9 | ) | (56 | ) | ||||||
Net proceeds from sale of equity interests in ATMP JV | (5 | ) | 346 | |||||||
Other | 4 | 3 | ||||||||
Net cash provided by (used in) investing activities | \\$ | (10 | ) | \\$ | 293 | |||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of common stock, net of issuance costs | 668 | 668 | ||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs | 681 | 681 | ||||||||
Proceeds from issuance of common stock under stock-based compensation equity plans | 10 | 12 | ||||||||
Repayments of borrowings, net | (226 | ) | (230 | ) | ||||||
Repayments of long-term debt | (848 | ) | (848 | ) | ||||||
Other | (3 | ) | (5 | ) | ||||||
Net cash provided by financing activities | \\$ | 282 | \\$ | 278 | ||||||
Net increase in cash and cash equivalents | 301 | 473 | ||||||||
Cash and cash equivalents at beginning of period | \\$ | 957 | \\$ | 785 | ||||||
Cash and cash equivalents at end of period | \\$ | 1,258 | \\$ | 1,258 | ||||||
ADVANCED MICRO DEVICES, INC. | ||||||||||||||||||||||
SELECTED CORPORATE DATA | ||||||||||||||||||||||
(Millions except headcount) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
Segment and Category Information | September 24, 2016 | June 25, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||||||||||||||||
Computing and Graphics (1) | ||||||||||||||||||||||
Net revenue | \\$ | 472 | \\$ | 435 | \\$ | 424 | \\$ | 1,367 | \\$ | 1,335 | ||||||||||||
Operating loss | \\$ | (66 | ) | \\$ | (81 | ) | \\$ | (181 | ) | \\$ | (217 | ) | \\$ | (403 | ) | |||||||
Enterprise, Embedded and Semi-Custom (2) | ||||||||||||||||||||||
Net revenue | \\$ | 835 | \\$ | 592 | \\$ | 637 | \\$ | 1,799 | \\$ | 1,698 | ||||||||||||
Operating income | \\$ | 136 | \\$ | 84 | \\$ | 84 | \\$ | 236 | \\$ | 156 | ||||||||||||
All Other (3) | ||||||||||||||||||||||
Net revenue | - | - | - | - | - | |||||||||||||||||
Operating loss | (363 | ) | (11 | ) | (61 | ) | (388 | ) | (185 | ) | ||||||||||||
Total | ||||||||||||||||||||||
Net revenue | \\$ | 1,307 | \\$ | 1,027 | \\$ | 1,061 | \\$ | 3,166 | \\$ | 3,033 | ||||||||||||
Operating loss | \\$ | (293 | ) | \\$ | (8 | ) | \\$ | (158 | ) | \\$ | (369 | ) | \\$ | (432 | ) | |||||||
Other Data | ||||||||||||||||||||||
Depreciation and amortization, excluding amortization of acquired intangible assets | \\$ | 33 | \\$ | 33 | \\$ | 42 | \\$ | 99 | \\$ | 130 | ||||||||||||
Capital additions | \\$ | 9 | \\$ | 21 | \\$ | 25 | \\$ | 56 | \\$ | 64 | ||||||||||||
Adjusted EBITDA (4) | \\$ | 103 | \\$ | 36 | \\$ | (55 | ) | \\$ | 117 | \\$ | (84 | ) | ||||||||||
Cash and cash equivalents | \\$ | 1,258 | \\$ | 957 | \\$ | 755 | \\$ | 1,258 | \\$ | 755 | ||||||||||||
Non-GAAP free cash flow (5) | \\$ | 20 | \\$ | (106 | ) | \\$ | (81 | ) | \\$ | (154 | ) | \\$ | (349 | ) | ||||||||
Total assets | \\$ | 3,616 | \\$ | 3,316 | \\$ | 3,229 | \\$ | 3,616 | \\$ | 3,229 | ||||||||||||
Total debt | \\$ | 1,632 | \\$ | 2,238 | \\$ | 2,260 | \\$ | 1,632 | \\$ | 2,260 | ||||||||||||
Headcount | 8,306 | 8,099 | 9,475 | 8,306 | 9,475 | |||||||||||||||||
(1) | Computing and Graphics segment primarily includes desktop and notebook processors, chipsets, discrete graphics processing units (GPUs) and professional graphics. |
(2) | Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services, technology for game consoles and licensing portions of its intellectual property portfolio. |
(3) | All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category are stock-based compensation expense and restructuring and other special charges, net. In addition, the Company also included a charge related to the sixth amendment to the WSA with GF for the three and nine months ended September 24, 2016 and amortization of acquired intangible assets for the nine months ended September 26, 2015. |
(4) | Reconciliation of GAAP Operating Loss to Adjusted EBITDA* | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | June 25, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||||||||||||||||
GAAP operating loss | \\$ | (293 | ) | \\$ | (8 | ) | \\$ | (158 | ) | \\$ | (369 | ) | \\$ | (432 | ) | ||||||
Charge related to the sixth amendment to the WSA with GF | 340 | - | - | 340 | - | ||||||||||||||||
Technology node transition charge | - | - | - | - | 33 | ||||||||||||||||
Restructuring and other special charges, net | - | (7 | ) | 48 | (10 | ) | 135 | ||||||||||||||
Stock-based compensation | 23 | 18 | 13 | 57 | 47 | ||||||||||||||||
Amortization of acquired intangible assets | - | - | - | - | 3 | ||||||||||||||||
Depreciation and amortization | 33 | 33 | 42 | 99 | 130 | ||||||||||||||||
Adjusted EBITDA | \\$ | 103 | \\$ | 36 | \\$ | (55 | ) | \\$ | 117 | \\$ | (84 | ) | |||||||||
(5) | Non-GAAP free cash flow reconciliation** | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 24, 2016 | June 25, 2016 | September 26, 2015 | September 24, 2016 | September 26, 2015 | |||||||||||||||||
GAAP net cash provided by (used in) operating activities | \\$ | 29 | \\$ | (85 | ) | \\$ | (56 | ) | \\$ | (98 | ) | \\$ | (285 | ) | |||||||
Purchases of property, plant and equipment | (9 | ) | (21 | ) | (25 | ) | (56 | ) | (64 | ) | |||||||||||
Non-GAAP free cash flow | \\$ | 20 | \\$ | (106 | ) | \\$ | (81 | ) | \\$ | (154 | ) | \\$ | (349 | ) | |||||||
* | The Company presents "Adjusted EBITDA" as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting operating income (loss) for depreciation and amortization, stock-based compensation expense and restructuring and other special charges, net. In addition, the Company excluded a charge related to the sixth amendment to the WSA with GF for the three and nine months ended September 24, 2016, a technology node transition charge and amortization of acquired intangible assets for the nine months ended September 26, 2015. The Company calculates and communicates Adjusted EBITDA because the Company's management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of operating income (loss) or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. |
** | The Company also presents non-GAAP free cash flow as a supplemental measure of its performance. Non-GAAP free cash flow is determined by adjusting GAAP net cash provided by (used in) operating activities for capital expenditures. The Company calculates and communicates non-GAAP free cash flow in the financial earnings press release because the Company's management believes it is of importance to investors to understand the nature of these cash flows. The Company's calculation of non-GAAP free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view non-GAAP free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities. The Company has provided reconciliations within the earnings press release of these non-GAAP financial measures to the most directly comparable GAAP financial measures. |
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