AMD Reports Fourth Quarter and Annual Results

¹ During the fourth quarter of 2008, the Company determined that the discontinued operation classification criteria for the Handheld business unit were no longer met. Accordingly, the results of the Handheld business have been reclassified from discontinued operations to continuing operations. Prior periods have been recast to conform to current period.

² In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for net loss, operating income (loss) and gross margin. These non-GAAP financial measures exclude certain adjustments as reflected 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.

³ Refer to corresponding table at the end of this press release for annual data.

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


	Quarter Ended									Year Ended
	Dec. 27,			Sept. 27,			Dec. 29,			Dec. 27,			Dec. 29,
		2008			2008			2007			2008		2007*
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Net revenue	$	1,162		$	1,797		$	1,737		$	5,808		$	5,858

Cost of sales		890			881			968			3,488			3,669


Gross margin		272			916			769			2,320			2,189

Gross margin %		23	%		51	%		44	%		40	%		37	%

Research and development		465			438			455			1,848			1,771

Marketing, general and administrative		317			315			319			1,304			1,360

Amortization of acquired intangible assets and integration charges		30			30			50			137			236

Impairment of goodwill and acquired intangible assets		684			2			1,132			1,089			1,132

Restructuring charges		50			9			-			90			-

Gain on sale of 200 millimeter equipment		-			-			-			(193	)		-


Operating income (loss)		(1,274	)		122			(1,187	)		(1,955	)		(2,310	)

Interest income		7			7			19			39			73
Interest expense		(89	)		(87	)		(95	)		(366	)		(367	)
Other income (expense), net		37			(4	)		1			22			(7	)


Income (loss) from continuing operations before minority interest, equity in net loss of Spansion Inc. and other and income taxes
		(1,319	)		38			(1,262	)		(2,260	)		(2,611	)

Minority interest in consolidated subsidiaries		(6	)		(7	)		(9	)		(33	)		(35	)

Equity in net loss of Spansion Inc. and other		(20	)		(9	)		(69	)		(53	)		(155	)


Income (loss) from continuing operations before income taxes		(1,345	)		22			(1,340	)		(2,346	)		(2,801	)

Provision (benefit) for income taxes		69			(1	)		(42	)		68			27


Income (loss) from continuing operations	$	(1,414	)	$	23		$	(1,298	)	$	(2,414	)	$	(2,828	)

Income (loss) from discontinued operations, net of tax		(10	)		(150	)		(474	)		(684	)		(551	)


Net income (loss)	$	(1,424	)	$	(127	)	$	(1,772	)	$	(3,098	)	$	(3,379	)


Net income (loss) per common share

Basic and diluted
Continuing operations	$	(2.32	)	$	0.04		$	(2.24	)	$	(3.98	)	$	(5.07	)
Discontinued operations	$	(0.02	)	$	(0.25	)	$	(0.82	)	$	(1.12	)	$	(0.99	)
Basic and diluted net income (loss) per common share	$	(2.34	)	$	(0.21	)	$	(3.06	)	$	(5.10	)	$	(6.06	)


Shares used in per share calculation

Basic and diluted		609			608			579			607			558

* Amounts for the year ended December 29, 2007 were derived from the December 29, 2007 audited financial statements, adjusted for discontinued operations.


ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
		Dec. 27,			Dec. 29,
		2008			2007*
		(Unaudited)

Assets

Current assets:
	Cash, cash equivalents and marketable securities	$	1,096		$	1,889
	Accounts receivable, net		320			640
	Inventories		656			810
	Prepaid expenses and other current assets		279			401
	Deferred income taxes		28			64
	Assets of discontinued operations		-			759


	Total current assets		2,379			4,563

Property, plant and equipment, net			4,296			4,716
Goodwill			323			1,286
Acquisition related intangible assets, net			168			465
Other assets			509			520


Total Assets		$	7,675		$	11,550

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
	Accounts payable	$	631		$	1,009
	Accrued compensation and benefits		162			186
	Accrued liabilities		785			821
	Deferred income on shipments to distributors		50			101
	Current portion of long-term debt and capital lease obligations		286			238
	Other short-term obligations		86			-
	Other current liabilities		226			270


	Total current liabilities		2,226			2,625

Deferred income taxes			91			6
Long-term debt and capital lease obligations, less current portion			4,702			5,031
Other long-term liabilities			569			633
Minority interest in consolidated subsidiaries			169			265

Stockholders' equity (deficit):
	Capital stock:
	Common stock, par value		6			6
	Capital in excess of par value		6,002			5,921
	Retained earnings (deficit)		(6,198	)		(3,100	)
	Accumulated other comprehensive income		108			163


	Total stockholders' equity (deficit)		(82	)		2,990


Total Liabilities and Stockholders' Equity (Deficit)		$	7,675		$	11,550

* Amounts for the year ended December 29, 2007 were derived from the December 29, 2007 audited financial statements, adjusted for discontinued operations.

ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA (1)
(Unaudited)
(Millions except headcount and percentages)


		Quarter Ended												Year Ended
		Dec. 27,				Sept. 27,				Dec. 29,				Dec. 27,				Dec. 29,
Segment Information from Continuing Operations		2008				2008				2007				2008				2007


Computing Solutions (2)
	Net revenue		$	873			$	1,391			$	1,402			$	4,559			$	4,702
	Operating income (loss)		$	(431	)		$	143			$	10			$	(461	)		$	(712	)

Graphics (3)
	Net revenue			270				385				295				1,165				992
	Operating income (loss)			(10	)			47				15				12				(39	)

All Other (4)
	Net revenue			19				21				40				84				164
	Operating income (loss)			(833	)			(68	)			(1,212	)			(1,506	)			(1,559	)

Total from Continuing Operations
	Net revenue		$	1,162			$	1,797			$	1,737			$	5,808			$	5,858
	Operating income (loss)		$	(1,274	)		$	122			$	(1,187	)		$	(1,955	)		$	(2,310	)



Revenue Reconciliation

Revenue from continuing operations			$	1,162			$	1,797			$	1,737			$	5,808			$	5,858
Revenue from discontinued operations				8				23				33				73				155
	Total revenue		$	1,170			$	1,820			$	1,770			$	5,881			$	6,013

Components of Discontinued Operations

Operating income (loss)			$	(10	)		$	(15	)		$	2			$	(74	)		$	(75	)
Impairment of goodwill and acquired intangible assets				-				(135	)			(476	)			(609	)			(476	)
Restructuring charges				-				-				-				(1	)			-
	Total loss from discontinued operations		$	(10	)		$	(150	)		$	(474	)		$	(684	)		$	(551	)


Other Data

Depreciation & amortization
(excluding amortization of acquired intangible assets)			$	271			$	266			$	272			$	1,068			$	1,030

Capital additions			$	112			$	83			$	264			$	621			$	1,683

Adjusted EBITDA (5)			$	(271	)		$	406			$	206			$	313			$	(64	)


Headcount				14,652				15,460				16,420				14,652				16,420




(1)	Comparative amounts adjusted for discontinued operations except for headcount data.
(2)	Computing Solutions segment includes microprocessors, chipsets and embedded processors. For the year ended December 27, 2008 , the operating loss includes a $193M gain on the sale of 200 mm equipment. For the quarter ended Sept. 27, 2008 and year ended December 27, 2008, net revenue includes $191M in technology license revenue.
(3)	Graphics segment includes graphics, video and multimedia products developed for use in desktop and notebook computers, including home media PCs, professional workstations and servers. Starting in the quarter ended June 28, 2008 this segment also includes royalties received in connection with the sale of game console systems that incorporate the Company’s graphics technology. Prior periods have been recast to conform to current period presentation.
(4)	All Other category includes employee stock-based compensation expense and certain operating expenses and credits that are not allocated to the operating segments. Also included in this category are charges for the impairment of goodwill and acquired intangible assets, amortization of acquired intangible assets and integration, restructuring, severance; The Foundry Company formation costs; and the cost of fair value adjustment of acquired inventory. Details of these significant items are shown below. Starting in the quarter ended December 27, 2008, the All Other category includes the results of our Handheld business. Prior periods have been recast to conform to current period presentation.

	Significant items in All Other																Employee stock-based compensation expense:
		Quarter Ended									Year Ended							Quarter Ended						Year Ended
		Q408			Q308			Q407			FY08			FY07				Q408		Q308		Q407		FY08		FY07
	Impairment of goodwill and acquired intangible assets	$	684		$	2		$	1,132		$	1,089		$	1,132		Cost of sales	$	2	$	2	$	5	$	10	$	11
	Amortization of acquired intangible assets and integration charges		30			30			50			137			236		Research and development		10		10		11		44		50
	Restructuring charges		50			9			-			90			-		Marketing, general and administrative		8		7		10		23		48
	The Foundry Company formation costs		23			-			-			23			-			$	20	$	19	$	26	$	77	$	109
	Cost of fair value adjustment of acquired inventory		-			-			-			-			25
	Severance charges		-			-			-			-			18
		$	787		$	41		$	1,182		$	1,339		$	1,411

(5)	Reconciliation of income (loss) from continuing operations to Adjusted EBITDA*
		Quarter Ended									Year Ended
		Q408			Q308			Q407			FY08			FY07
	Income (loss) from continuing operations	$	(1,414	)	$	23		$	(1,298	)	$	(2,414	)	$	(2,828	)
	Impairment of goodwill and acquired intangible assets		684			2			1,132			1,089			1,132
	Depreciation and amortization		271			266			272			1,068			1,030
	Amortization of acquired intangible assets		30			29			47			136			208
	Interest expense		89			87			95			366			367
	Provision (benefit) for income taxes		69			(1	)		(42	)		68			27
	Adjusted EBITDA	$	(271	)	$	406		$	206		$	313		$	(64	)

*	The Company defines Adjusted EBITDA as income (loss) from continuing operations adjusted for impairment of goodwill and acquired intangible assets, depreciation and amortization, amortization of acquired intangible assets, interest expense and taxes. The Company calculates and communicates Adjusted EBITDA because management believes it is of interest to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. 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 U.S. GAAP operating measure of net income (loss) or U.S. 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.

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