What are the main reasons AMD is presenting non-GAAP financial measures?

AMD is presenting non-GAAP financial measures to provide investors with a clearer view of its ongoing operational performance. These measures exclude certain charges that management believes are not indicative of current or future operating performance, such as impairment charges related to the ATI acquisition, inventory write-downs due to weak market conditions, restructuring costs, and expenses incurred in forming The Foundry Company. The company aims to facilitate easier comparison of current operating results with historical trends.

What is the significance of Intel's letter regarding The Foundry Company?

Intel's letter raises significant questions about AMD's creation of The Foundry Company and its compliance with existing patent cross-license agreements. Intel is seeking clarification on whether The Foundry Company qualifies as a 'Subsidiary' under the agreement and if its formation, or the prior acquisition of ATI, constitutes a breach of contract or a change of control. This could potentially impact AMD's intellectual property rights and licensing arrangements with a major competitor.

What significant divestitures did AMD complete or expect to complete around this time?

During the fourth fiscal quarter of 2008, AMD completed the sale of its DTV business unit to Broadcom Corporation for $141.5 million in cash. Additionally, the filing notes that in the first fiscal quarter of 2009 (following the report date), AMD completed the sale of technology assets, intellectual property, and resources of its Handheld business unit to Qualcomm for $65 million in cash. These divestitures align with AMD's strategy to focus on core computing and graphics opportunities.

AMD 8-K: Earnings & Results & Regulation FD

Summary

This 8-K filing from Advanced Micro Devices (AMD) on January 22, 2009, primarily announces the company's financial results for the fourth quarter and fiscal year ended December 27, 2008. A significant aspect of the filing is the detailed explanation and presentation of non-GAAP financial measures. These adjustments are used to provide a clearer view of ongoing operational performance by excluding items such as impairment charges related to the ATI acquisition, inventory write-downs due to weak market conditions, restructuring charges, and costs associated with forming The Foundry Company. Furthermore, the report discloses that AMD received a letter from Intel Corporation questioning the status of The Foundry Company under their existing patent cross-license agreements. Intel is seeking to determine if The Foundry Company qualifies as a "Subsidiary" and if its creation, or the earlier ATI acquisition, constitutes a breach or change of control under the agreement. AMD maintains a strong belief that its actions are compliant with the agreements.

Key Highlights

1AMD announced its financial results for the fourth quarter and full fiscal year ended December 27, 2008.
2The company provided detailed non-GAAP financial measures to present a view of ongoing operational performance, excluding certain charges.
3Key exclusions in non-GAAP calculations include impairment of goodwill and intangibles from the ATI acquisition, inventory write-downs, restructuring charges, and Foundry Company formation costs.
4AMD completed the sale of its DTV business unit to Broadcom for $141.5 million in cash during Q4 2008.
5In Q1 2009, AMD completed the sale of its Handheld business unit assets to Qualcomm for $65 million in cash.
6Intel Corporation sent a letter to AMD questioning the qualification of The Foundry Company as a "Subsidiary" under their 1976 and 2001 Patent Cross License Agreements.
7Intel also inquired whether The Foundry Company's creation or the ATI acquisition constituted a breach of contract or a change of control under the cross-license agreements.

ADVANCED MICRO DEVICES INC 8-K Report, Financial Results (Jan 22, 2009)

Summary

Key Highlights

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