What is the main change in accounting presented in this filing?

The primary accounting change is that Advanced Micro Devices (AMD) has begun deconsolidating GLOBALFOUNDRIES Inc. (GF) and is now accounting for its investment in GF using the equity method of accounting, starting from the first fiscal quarter of 2010. This means GF's results will no longer be fully consolidated into AMD's financial statements.

Why is AMD providing non-GAAP financial measures?

AMD is providing non-GAAP financial measures to offer investors a clearer and more comparable view of its ongoing operating performance. These measures exclude certain items that management believes are not indicative of core business operations, such as the impact of deconsolidating GF, amortization of acquired intangibles, restructuring costs, and one-time gains or losses.

What is the "deconsolidation gain on the fair value assessment of investment in GF"?

This refers to a non-cash, one-time gain of approximately $325 million recognized by AMD in the first fiscal quarter of 2010. It resulted from the accounting requirement to record their investment in GF at fair value when deconsolidating GF's operations, and the difference between this fair value and the net carrying book value was recognized as a gain.

How does the accounting change for GF affect AMD's financial reporting?

By moving to the equity method for GF, AMD will report its proportionate share of GF's net income or loss, rather than consolidating all of GF's revenues and expenses. This shift necessitates the use of non-GAAP measures to highlight AMD's performance as a standalone entity, separate from the financial results of GF.

AMD 8-K: Earnings & Results & Regulation FD

Summary

This 8-K filing from Advanced Micro Devices, Inc. (AMD), dated July 15, 2010, primarily announces its financial results for the fiscal quarter ended June 26, 2010. A significant change in accounting is highlighted: AMD has begun deconsolidating GLOBALFOUNDRIES Inc. (GF) and accounting for its investment in GF using the equity method. This shift significantly impacts how AMD reports its financial performance and necessitates the use of non-GAAP financial measures to provide a clearer view of its core operations. The company is emphasizing non-GAAP financial measures to help investors compare current and historical performance, excluding items like the equity in net income/loss of GF, amortization of acquired intangibles, and restructuring charges. These adjustments aim to present a more consistent and comparable view of AMD's operational results, particularly in light of the accounting changes related to GF. Investors should pay close attention to these non-GAAP figures alongside the standard GAAP reporting.

Key Highlights

1AMD announced its financial results for the fiscal quarter ended June 26, 2010.
2The company has begun deconsolidating GLOBALFOUNDRIES Inc. (GF) and is now accounting for its investment in GF using the equity method, effective from the first fiscal quarter of 2010.
3AMD is presenting various non-GAAP financial measures (e.g., non-GAAP net income, operating income, EPS, gross margin, Adjusted EBITDA, and adjusted free cash flow) to supplement its GAAP reporting.
4These non-GAAP measures exclude items such as equity in net income/loss of GF, amortization of acquired intangibles, restructuring charges/reversals, and gains/losses from debt repurchases, aimed at providing a clearer view of ongoing operating performance.
5A one-time, non-cash gain of approximately $325 million related to the fair value assessment of its investment in GF upon deconsolidation was recognized in the first fiscal quarter of 2010.
6The company also provided historical non-GAAP financial measures for comparable periods (Q2 2009) to aid investor comparison.
7The filing details specific adjustments made to derive these non-GAAP metrics, explaining the rationale for excluding certain financial activities.

ADVANCED MICRO DEVICES INC 8-K Report, Financial Results (Jul 15, 2010)

Summary

Key Highlights

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