What is GLOBALFOUNDRIES (GF) and why is AMD consolidating it?

GLOBALFOUNDRIES (GF) was created through a manufacturing joint venture AMD entered into on March 2, 2009. Although AMD does not have a majority ownership, it is required by accounting rules to consolidate GF's operations into its financial statements for reporting purposes.

Why is AMD providing non-GAAP financial measures?

AMD is providing non-GAAP financial measures to help investors better understand the company's ongoing operational performance and to facilitate comparisons with prior periods. These measures exclude certain items that are considered non-recurring or not indicative of core operations, such as gains from debt buybacks, restructuring charges, and acquisition-related amortization.

What is the 'AMD Product Company' basis for reporting?

The 'AMD Product Company' reporting excludes the results of AMD's Foundry segment and intersegment eliminations. This is intended to provide investors with a clearer view of AMD's financial results specifically for its product business, separate from the manufacturing operations of GF, and absent the requirement to consolidate GF.

What was the impact of the inventory write-down and subsequent sale?

In Q4 2008, AMD recorded an incremental inventory write-down of $227 million due to economic conditions. In Q1 2009, some of this inventory was sold due to unexpected demand. AMD excludes the benefit from this sale in its Q1 2009 non-GAAP results to better reflect ongoing operating performance.

AMD 8-K: Earnings & Results & Regulation FD

Summary

This 8-K filing from Advanced Micro Devices (AMD) on April 21, 2009, primarily serves to announce the company's financial results for the fiscal quarter ended March 28, 2009. A significant event highlighted is the formation of GLOBALFOUNDRIES Inc. (GF) through a manufacturing joint venture, which AMD is required to consolidate for financial reporting. To provide investors with a clearer understanding of its core operations, AMD is presenting non-GAAP financial measures, both on a consolidated basis and on a stand-alone "AMD Product Company" basis, excluding the Foundry segment and certain other items. The company is also detailing various adjustments made to GAAP results to arrive at these non-GAAP figures. These adjustments include excluding the benefit from selling previously written-down inventory, amortization of acquired intangible assets (primarily from the ATI acquisition), restructuring charges, GF formation costs, investment net charges, gains from debt buybacks, gains from asset sales, and incremental tax provisions related to GF. These exclusions aim to present a view of ongoing operational performance and comparability across periods. Investors are encouraged to review these non-GAAP measures alongside the official GAAP financials.

Key Highlights

1AMD announced its financial results for the fiscal quarter ended March 28, 2009.
2The formation of GLOBALFOUNDRIES Inc. (GF) through a manufacturing joint venture is a key event, with GF's operations being consolidated by AMD.
3AMD is presenting non-GAAP financial measures to offer investors a better view of ongoing operational performance.
4Non-GAAP results are provided on both a consolidated basis and a stand-alone 'AMD Product Company' basis, excluding the Foundry segment.
5Significant adjustments in non-GAAP reporting include excluding inventory write-down benefits, amortization of intangibles, restructuring charges, and GF formation costs.
6The company highlights a gain of $108 million from a debt buyback in Q1 2009.
7AMD also reported a $65 million gain from the sale of certain Handheld business assets to Qualcomm.

ADVANCED MICRO DEVICES INC 8-K Report, Financial Results (Apr 21, 2009)

Summary

Key Highlights

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