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AMD Reports First Quarter Results

SUNNYVALE, Calif.--(BUSINESS WIRE)--April 17, 2008--AMD (NYSE:AMD) today reported first quarter 2008 revenue of $1.505 billion, a net loss of $358 million, or $0.59 per share, and an operating loss of $264 million. These results include an impact of $50 million, or $0.08 per share, from ATI acquisition-related charges. First quarter revenue decreased 15 percent compared to the fourth quarter of 2007 and increased 22 percent compared to the first quarter of 2007. In the fourth quarter of 2007, AMD reported revenue of $1.770 billion, a net loss of $1.772 billion, and an operating loss of $1.678 billion. In the first quarter of 2007, AMD reported revenue of $1.233 billion, a net loss $611 million, and an operating loss of $504 million.

       Reconciliation of GAAP Net Loss to Non-GAAP Net Loss(1)

(Millions except per share
 amounts)                       Q1-08          Q4-07         Q1-07
---------------------------- ------------ --------------- ------------
GAAP net loss/EPS, less:     $(358)(0.59) $(1,772)$(3.06) $(611)(1.11)
---------------------------- ------------ --------------- ------------
    ATI acquisition-related
     charges                   (50)(0.08)  (1,669) (2.89)  (113)(0.21)
---------------------------- ------------ --------------- ------------
    Tax benefit from ATI
     acquisition-related
     charges                     -     -       63   0.11      -     -
---------------------------- ------------ --------------- ------------
    Spansion investment
     impairment                  -     -      (69) (0.12)     -     -
---------------------------- ------------ --------------- ------------
Total net charges              (50)(0.08)  (1,675) (2.89)  (113)(0.21)
---------------------------- ------------ --------------- ------------
Non-GAAP net loss (1)        $(308)    -  $   (97)     -  $(498)    -
---------------------------- ------------ --------------- ------------
 Reconciliation of GAAP Operating Loss to Non-GAAP Operating Loss(1)

(Millions)                                      Q1-08   Q4-07   Q1-07
----------------------------------------------- ------ -------- ------
GAAP operating loss, less:                      $(264) $(1,678) $(504)
----------------------------------------------- ------ -------- ------
     ATI acquisition-related charges              (50)  (1,669)  (113)
----------------------------------------------- ------ -------- ------
Non-GAAP operating loss(1)                      $(214) $    (9) $(391)
----------------------------------------------- ------ -------- ------

"A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products, resulting in lower than expected revenues in all business segments. However, we are encouraged by the market acceptance of our Quad-Core AMD Opteron(TM) server processors as well as our new chipset and graphics offerings," said Robert J. Rivet, AMD's Chief Financial officer. "We remain committed to achieve operating profitability in the second half of the year, driven by our portfolio of new products and platforms and aggressive restructuring programs."

First quarter 2008 gross margin was 42 percent compared to 44 percent in the fourth quarter of 2007 and 28 percent in the first quarter of 2007. The decrease from the prior quarter was primarily due to decreased microprocessor unit shipments.

                         Segment Information

                                                         vs Q4- vs Q1-
(Millions)                                       Q1-08     07     07
-------------------------------------------------------- ------ ------
Computing Solutions
-------------------------------------------------------- ------ ------
  Revenue                                      $   1,194   -15%    30%
-------------------------------------------------------- ------ ------
  Microprocessor Units                                 -   Down     Up
-------------------------------------------------------- ------ ------
  Microprocessor Average Selling Price (ASP)           -   Flat   Flat
-------------------------------------------------------- ------ ------
Graphics
-------------------------------------------------------- ------ ------
  Revenue                                      $     230   -11%    17%
-------------------------------------------------------- ------ ------
  Units                                                -     Up     Up
-------------------------------------------------------- ------ ------
  Average Selling Price (ASP)                          -   Down   Flat
-------------------------------------------------------- ------ ------
Consumer Electronics
-------------------------------------------------------- ------ ------
  Revenue                                      $      81   -26%   -31%
-------------------------------------------------------- ------ ------
Total AMD
-------------------------------------------------------- ------ ------
  Revenue                                      $   1,505   -15%    22%
-------------------------------------------------------- ------ ------

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.

In the seasonally down second quarter, AMD expects revenue to decrease in line with seasonality. As previously disclosed, AMD expects to record a restructuring charge in the second quarter of 2008.

Additional Quarterly Highlights

-- AMD began volume shipments of Quad-Core AMD Opteron processors.
   Initial systems are available now from several customers including
   Dell and HP and more platforms expected to be available in the
   coming weeks from our largest global customers.

-- AMD launched seven new AMD Phenom(TM) processors, including:

   -- AMD Phenom X4 9100e, the industry's first energy-efficient
      desktop quad-core processor;
   -- AMD Phenom X4 9850 Black Edition processor; and
   -- AMD Phenom X3 8000 series, the world's first triple-core
      processor.

-- AMD introduced the 780 Series chipset, the industry's most advanced
   motherboard GPU and the first product capable of combining the
   graphics power of integrated motherboard and discrete graphics to
   deliver a better visual experience.

-- AMD introduced the ATI Radeon(TM) HD 3870 X2 graphics card
   delivering leading performance for the enthusiast user and the ATI
   Radeon HD 3400 and ATI Radeon HD 3600 series to provide outstanding
   performance and unmatched value for the mainstream user. AMD also
   announced software updates to enable the world's first quad-GPU
   support.

-- AMD demonstrated its first 45nm quad-core processors for servers
   and desktops.

-- AMD announced its first application processor for feature-rich
   multimedia mobile phones, strengthened its portfolio of discrete
   media processors, and expanded its handheld graphics IP offerings.

-- AMD introduced the ATI FireGL(TM) V7700, the first commercially
   available 3D workstation graphics card with DisplayPort support,
   and a new 2D workstation graphics card which delivers exceptional
   energy efficiency and longevity.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its first quarter financial results. AMD will provide a real-time 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.

About AMD

Advanced Micro Devices (NYSE:AMD) is a leading global provider of innovative processing solutions in the computing, graphics and consumer electronics markets. AMD is dedicated to driving open innovation, choice and industry growth by delivering superior customer-centric solutions that empower consumers and businesses worldwide. For more information, visit www.amd.com.

Cautionary Statement

This release contains forward-looking statements concerning revenue for the second quarter of 2008, profitability for the second half of 2008 driven by new products and platforms, restructuring programs, and availability of platforms containing the Quad-Core AMD Opteron processor, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this 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; the company will require additional funding and may not be able to raise funds on favorable terms or at all; the company's cost containment efforts will not be effective; customers stop buying the company's products or materially reduce their operations or demand for its products; 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; the company's competitors, customers and suppliers may take actions that will negate the anticipated benefits of the company's acquisition of ATI; demand for computers and consumer electronics products and, in turn, demand for the company's products will be lower than currently expected; global business and economic conditions will worsen, resulting in lower than currently expected revenue in the second quarter of 2008 and beyond; 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 to advanced manufacturing process technologies in a timely and effective way, consistent with planned capital expenditures; 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 under-utilize its 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 Annual Report on Form 10-K for the year ended December 29, 2007.

AMD, the AMD Arrow logo, AMD Opteron, AMD Phenom and combinations thereof, and ATI, the ATI logo, FireGL 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 owners.

(1) In this press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures for operating loss and net loss to reflect its financial results without ATI acquisition-related charges (refer to footnote 4 of the financial tables for further details of these charges) for operating loss and in addition, for Q4-07 without the tax benefit from ATI acquisition-related charges and investment impairment charges for net loss. Management believes this non-GAAP presentation makes it easier for investors to compare current and historical period operating results.

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


                                               Quarter Ended
----------------------------------------------------------------------
                                      Mar. 29,   Dec. 29,   Mar. 31,
                                        2008       2007       2007
                                     (Unaudited)(Unaudited)(Unaudited)
----------------------------------------------------------------------

Net revenue                              $1,505    $ 1,770     $1,233

Cost of sales                               877        985        886

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

Gross margin                                628        785        347

Gross margin %                               42%        44%        28%

Research and development                    501        473        432

Marketing, general and
 administrative                             341        321        335

Amortization of acquired intangible
 assets and integration charges              50         61         84

Impairment of goodwill and acquired
 intangible assets                            -      1,608          -

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

Operating income (loss)                    (264)    (1,678)      (504)

Interest income                              15         19         16
Interest expense                            (95)       (95)       (78)
Other income (expense), net                  (1)         1          2

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

Income (loss) before minority
 interest, equity in net loss of
 Spansion Inc. and other and income
 taxes                                     (345)    (1,753)      (564)

Minority interest in consolidated
 subsidiaries                               (13)        (9)        (8)

Equity in net loss of Spansion Inc.
 and other                                    -        (69)       (16)

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

Income (loss) before income taxes          (358)    (1,831)      (588)

Provision (benefit) for income taxes          -        (59)        23

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

Net income (loss)                        $ (358)   $(1,772)    $ (611)

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

Net income (loss) per common share

Basic                                    $(0.59)   $ (3.06)    $(1.11)

Diluted                                  $(0.59)   $ (3.06)    $(1.11)

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

Shares used in per share calculation

Basic                                       606        579        549
Diluted                                     606        579        549
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
                                                Mar. 29,    Dec. 29,
                                                  2008       2007(a)
                                              (Unaudited)
----------------------------------------------------------------------

Assets

Current assets:
   Cash, cash equivalents and marketable
    securities                                    $ 1,753     $ 1,889
   Accounts receivable, net                           538         640
   Inventories                                        785         821
   Prepaid expenses and other current assets          332         402
   Deferred income taxes                              105          64

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

        Total current assets                        3,513       3,816

Property, plant and equipment, net                  4,765       4,720
Goodwill                                            1,907       1,907
Acquisition related intangible assets, net            536         587
Other assets                                          487         520

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

Total Assets                                      $11,208     $11,550
======================================================================

Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable                               $   944     $ 1,009
   Accrued compensation and benefits                  151         186
   Accrued liabilities                                946         821
   Deferred income on shipments to
    distributors                                       92         101
   Current portion of long-term debt and
    capital lease obligations                         262         238
   Other current liabilities                          343         270
----------------------------------------------------------------------

        Total current liabilities                   2,738       2,625

Deferred income taxes                                   4           6
Long-term debt and capital lease obligations,
 less current portion                               5,025       5,031
Other long-term liabilities                           615         633
Minority interest in consolidated
 subsidiaries                                         189         265

Stockholders' equity:
   Capital stock:
    Common stock, par value                             6           6
    Capital in excess of par value                  5,941       5,921
   Retained earnings (deficit)                     (3,458)     (3,100)
   Accumulated other comprehensive income             148         163
----------------------------------------------------------------------

        Total stockholders' equity                  2,637       2,990

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

Total Liabilities and Stockholders' Equity        $11,208     $11,550
======================================================================



(a)Amounts for the year ended December 29, 2007 were derived from the
    December 29, 2007 audited financial statements.
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Unaudited)
(Millions except headcount and percentages)

                                               Quarter Ended
----------------------------------   ---------------------------------
Segment Information                   Mar. 29,  Dec. 29,    Mar. 31,
                                        2008      2007        2007
---------------------------------

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

Computing Solutions (1)
   Net revenue                         $ 1,194   $ 1,402    $   918
   Operating income (loss)             $  (160)  $    21    $  (321)

Graphics (2)
   Net revenue                             230       259        197
   Operating income (loss)                 (11)      (12)       (35)

Consumer Electronics (3)
   Net revenue                              81       109        118
   Operating income (loss)                  (8)       12         (4)

All Other (4)
   Net revenue                               -         -          -
   Operating income (loss)                 (85)   (1,699)      (144)

Total AMD
   Net revenue                         $ 1,505   $ 1,770    $ 1,233
   Operating income (loss)             $  (264)  $(1,678)   $  (504)


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

Other Data
---------------------------------

Depreciation & amortization
 (excluding amortization of
 acquired intangible assets)           $   267   $   273    $   243

Capital additions                      $   323   $   267    $   586

Headcount                               16,398    16,420     16,745

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

Adjusted EBITDA (5)                    $    54   $   203    $  (196)
---------------------------------

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


(1)Computing Solutions segment includes microprocessors, chipsets and
    embedded processors.
(2)Graphics segment includes graphics, video and multimedia products
    developed for use in desktop and notebook computers, including
    home media PCs, professional workstations and servers.
(3)Consumer Electronics segment includes products for and revenue
    related to mobile phones and PDAs, digital televisions and other
    consumer electronics and royalties received in connection with the
    sale of game console systems that incorporate the Company's
    technology.
(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 the ATI acquisition-related charges. Details of the
    ATI acquisition-related charges and employee stock-based
    compensation expense are shown below.


     ATI acquisition-related charges:    Employee stock-based
                                          compensation expense:
                      Quarter Ended                     Quarter Ended
                   Q108    Q407    Q107                 Q108 Q407 Q107
                  ------ -------- ------                ---- ---- ----
     Amortization
      of acquired
      intangible
      assets      $  50  $    58  $  71  Cost of sales   $ 3 $ 3   $ 2
     Integration                         Research and
      charges         -        3     13   development     16  12    14
                  ------ -------- ------
     Subtotal                            Marketing,
                                          general and
                  $  50  $    61  $  84   administrative   2  11    12
                                                        ---- ---- ----
     Impairment of
      goodwill and
      acquired
      intangible
      assets          -    1,608      -                  $21 $26   $28
                                                        ==== ==== ====
     Cost of fair
      value
      adjustment
      of acquired
      inventory       -        -     29
                  ------ -------- ------
     ATI
      acquisition-
      related
      charges     $  50  $ 1,669  $ 113

(5)  Reconciliation of Net income (loss)
      to Adjusted EBITDA(a)
                      Quarter Ended
                   Q108    Q407    Q107
                  ------ -------- ------
     Net income
      (loss)      $(358) $(1,772) $(611)
     Depreciation
      and
      amortization  267      273    243
     Amortization
      of acquired
      intangible
      assets         50       58     71
     Impairment of
      goodwill and
      acquired
      intangible
      assets          -    1,608      -
     Interest
      expense        95       95     78
     Provision
      (benefit)
      for income
      taxes           -      (59)    23
     ------------------- -------- ------
     Adjusted
      EBITDA      $  54  $   203  $(196)
                  ====== ======== ======

  (a)The Company defines Adjusted EBITDA as net income (loss) adjusted
      for depreciation and amortization, amortization of acquired
      intangible assets, impairment of goodwill and 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 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.

    CONTACT: AMD
             Drew Prairie, 512-602-4425 (Editorial Contact)
             drew.prairie@amd.com
             or
             Ruth Cotter, 408-749-3887 (Investor Contact)
             ruth.cotter@amd.com

    SOURCE: Advanced Micro Devices Inc.