AMD Reports Fourth Quarter and Annual Results
In the fourth quarter of 2009, AMD reported net income attributable to AMD common stockholders of $1.178 billion, or $1.52 per share, which includes a net favorable impact of $1.238 billion, or $1.57 per share. AMD reported operating income of $1.288 billion in the quarter, including a net favorable impact of $1.224 billion. The net favorable impacts were primarily from a legal settlement with Intel Corp.
For the year ended Dec. 26, 2009, AMD reported revenue of $5.403 billion. Fiscal 2009 net income attributable to AMD common stockholders was $304 million. AMD reported revenue of $5.808 billion and a net loss attributable to AMD common stockholders of $3.129 billion for fiscal 2008.
As of the first quarter of 2010, AMD will report operating results for what was formerly referred to as AMD Product Company only and will no longer consolidate the financial results of GLOBALFOUNDRIES. AMD's investment in GLOBALFOUNDRIES will be accounted for using the equity method.
"AMD's quarter marks another milestone in our transformation and underscores our growing momentum," said Dirk Meyer, AMD president and CEO. "We enter 2010 having completed the transition to a fabless business model, reached a historic antitrust settlement, and made significant progress strengthening our balance sheet. Our innovative strategy for designing the world's most vivid digital experiences continues to generate demand."
In the third quarter of 2009, AMD had revenue of $1.396 billion, a net loss attributable to AMD common stockholders of $128 million and an operating loss of $77 million. In the fourth quarter of 2008, AMD had revenue of $1.162 billion, a net loss attributable to AMD common stockholders of $1.436 billion and an operating loss of $1.274 billion.
In the fourth quarter of 2009, AMD Product Company reported non-GAAP net income of $80 million and non-GAAP operating income of $169 million. In the third quarter of 2009, AMD Product Company reported non-GAAP net income of $2 million and a non-GAAP operating income of $47 million. AMD Product Company adjusted EBITDA for the fourth quarter was $282 million, up from $169 million in the prior quarter.
Fourth quarter 2009 AMD gross margin was 45 percent compared to 42 percent in the prior quarter. Fourth quarter 2009 AMD Product Company non-GAAP gross margin was 41 percent compared to 38 percent in the prior quarter.
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 the "Cautionary Statement" below.
AMD expects revenue to be down seasonally for the first quarter of 2010.
- Intel and AMD announced a comprehensive agreement to end all outstanding legal disputes. Both companies obtained patent rights under a new crosslicense agreement, Intel agreed to abide by a set of fair business practice provisions, and Intel paid AMD $1.25 billion.
- AMD redeemed the remaining amount outstanding of its 7.75% Senior Notes due 2012 (approximately $390 million), reduced the aggregate amount outstanding of its 5.75% Convertible Senior Notes due 2012 by approximately $1 billion and issued $500 million of 8.125% Senior Notes due 2017. In the fourth quarter, AMD decreased its debt due in 2012 by nearly $1.4 billion, to $485 million.
- Lenovo announced its first AMDpowered notebooks, including the Lenovo ThinkPad Edge and Lenovo ThinkPad X100e commercial notebooks based on VISION Pro Technology from AMD.
- Acer, Dell, HP and Lenovo began selling consumer PCs based on the latest AMD Athlon(TM) II mainstream processors that offer low energy consumption and reduced heat and noise.
- AMD powers four of the top five supercomputers in the world, including the world's highestperforming supercomputer. AMD GPUs also power the world's highestperforming supercomputer featuring graphics processors.
- AMD extended its nextgeneration ATI Radeon(TM) HD 5000 graphics cards, bringing the industry's only DirectX 11capable cards to additional market segments and enabling new levels of graphics performance for the mobile market. AMD shipped more than two million DirectX 11 GPUs within three months of the launch of the initial products.
AMD hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) to discuss its fourth quarter financial results. AMD will provide a realtime audio broadcast of the teleconference on the Investor Relations page of its Web site at www.amd.com. The webcast will be available for 10 days after the conference call.
This release contains forwardlooking statements concerning AMD, including its first quarter 2010 revenue and anticipated future demand for its products which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forwardlooking 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 forwardlooking 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 targeting the company's business will prevent attainment of the company's current plans; global business and economic conditions will worsen resulting in lower than currently expected revenue in the first quarter of 2010 and beyond; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; customers stop buying the company's products or materially reduce their demand for its products; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; there will 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 or a decline in demand; the company will be unable to transition its products to advanced manufacturing process technologies in a timely and effective way; the company will be unable to maintain the level of investment in research and development and capacity that is required to remain competitive; and the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will underutilize its commitment with respect to GLOBALFOUNDRIES' microprocessor manufacturing facilities. 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 26, 2009.
AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, and ATI, the ATI logo, and Radeon 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.
 - For financial reporting purposes, AMD consolidated the operating results of GLOBALFOUNDRIES Inc. in its results from March 2, 2009 through December 26, 2009 and created the Foundry segment as of the start of fiscal 2009. References to "AMD" in this announcement include these consolidated operating results which are reported for GAAP purposes. "AMD Product Company" refers to AMD, excluding the operating results of the Foundry segment and Intersegment eliminations. Foundry segment includes the operating results attributable to the front end wafer manufacturing operations and related activities as of the beginning of the first quarter of 2009, which includes the operating results of GLOBALFOUNDRIES from March 2, 2009 through December 26, 2009. Intersegment eliminations consist of revenues, cost of sales and profits on inventory between AMD Product Company and the Foundry segment.
 - In this press release, in addition to GAAP financial results, the Company has provided non-GAAP financial measures for AMD net income (loss) attributable to AMD common stockholders and operating income (loss). These non-GAAP financial measures reflect certain adjustments as presented in the tables in this press release. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results by, among other things, excluding items that are not indicative of ongoing operating performance.
 - The Company is providing non-GAAP financial measures for AMD Product Company such as a statement of operations and selected balance sheet items as reflected in this press release. In addition, for AMD Product Company, the Company is providing non-GAAP financial measures such as net income (loss), operating income (loss) and gross margin which exclude certain adjustments as reflected in the tables above. Adjusted EBITIDA is also provided as a non-GAAP financial measure and is defined in the selected corporate data tables. AMD is providing these financial measures because it believes it is important for investors to have visibility into AMD's financial results excluding the Foundry segment, intersegment eliminations and certain adjustments as reflected in the tables in this press release and to better understand the Company's financial results absent the requirement to consolidate the financial results of GLOBALFOUNDRIES.
Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and technology partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com