QUARTERLY REPORT PURSUANT to SECTION 13 OR 15 (D) of the SECURITIES EXCHANGE ACT of 1934
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 29, 1996 --------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-7882 ------ ADVANCED MICRO DEVICES, INC. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 94-1692300 - -------------------------------- ----------------------------------- State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization One AMD Place P. O. Box 3453 Sunnyvale, California 94088-3453 - --------------------- --------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 732-2400 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- --------- The number of shares of $0.01 par value common stock outstanding as of October 31, 1996: 136,543,378. ----------- ADVANCED MICRO DEVICES, INC. - ---------------------------- INDEX - ----- <TABLE> <CAPTION> Part I. Financial Information Page No. --------------------- -------- <S> <C> <C> Item 1. Financial Statements Condensed Consolidated Statements of Operations-- Quarters Ended September 29, 1996 and October 1, 1995, and Nine Months Ended September 29, 1996 and October 1, 1995 3 Condensed Consolidated Balance Sheets-- September 29, 1996 and December 31, 1995 4 Condensed Consolidated Statements of Cash Flows-- Nine Months Ended September 29, 1996 and October 1, 1995 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Part II. Other Information ----------------- Item 1. Legal Proceedings 26 Item 6. Exhibits and Reports on Form 8-K 27 Signature 32 ---------- </TABLE> 1. FINANCIAL INFORMATION --------------------- ITEM 1. ------- FINANCIAL STATEMENTS -------------------- ADVANCED MICRO DEVICES, INC. ---------------------------- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- (Unaudited) (Thousands except per share amounts) <TABLE> <CAPTION> Quarter Ended Nine Months Ended ----------------------------- -------------------------------- October 1, October 1, September 29, 1995 September 29, 1995 1996 (Restated)* 1996 (Restated)* -------- -------- ---------- ---------- <S> <C> <C> <C> <C> Net sales $456,862 $606,953 $1,456,151 $1,873,201 Expenses: Cost of sales 337,692 368,359 1,086,206 989,949 Research and development 105,656 106,237 293,204 308,806 Marketing, general and administrative 90,432 102,549 276,506 311,885 -------- -------- ---------- ---------- 533,780 577,145 1,655,916 1,610,640 -------- -------- ---------- ---------- Operating income (loss) (76,918) 29,808 (199,765) 262,561 Interest income and other, net 4,214 10,408 55,312 24,441 Interest expense (3,443) (315) (7,236) (1,394) -------- -------- ---------- ---------- Income (loss) before income taxes and equity in joint venture (76,147) 39,901 (151,689) 285,608 Provision (benefit) for income taxes (30,459) 10,212 (62,182) 92,052 -------- -------- ---------- ---------- Income (loss) before equity in joint venture (45,688) 29,689 (89,507) 193,556 Equity in net income of joint venture 7,326 12,311 41,800 13,426 -------- -------- ---------- ---------- Net income (loss) (38,362) 42,000 (47,707) 206,982 Preferred stock dividends - - - 10 -------- -------- ---------- ---------- Net income (loss) applicable to common stockholders $(38,362) $ 42,000 $ (47,707) $ 206,972 ======== ======== ========== ========== Net income (loss) per common share $ (.28) $ .30 $ (.35) $ 1.53 ======== ======== ========== ========== Shares used in per share calculation 136,082 139,288 135,019 135,451 ======== ======== ========== ========== </TABLE> * Restated from previously released financial information to reflect the January 1996 merger with NexGen, Inc., which has been accounted for under the pooling-of-interests method. See accompanying notes - ---------------------- 3 ADVANCED MICRO DEVICES, INC. ---------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Thousands) <TABLE> <CAPTION> September 29, December 31, 1996 1995(1) (Unaudited) (Restated)* ------------- ------------- <S> <C> <C> Assets - ------ Current assets: Cash and cash equivalents $ 108,748 $ 126,316 Short-term investments 252,596 383,349 ----------- ----------- Total cash, cash equivalents, and short-term investments 361,344 509,665 Accounts receivable, net 234,242 284,238 Inventories: Raw materials 23,680 29,494 Work-in-process 97,946 68,827 Finished goods 41,863 57,665 ----------- ----------- Total inventories 163,489 155,986 Deferred income taxes 149,289 147,489 Prepaid expenses and other current assets 95,287 40,564 ----------- ----------- Total current assets 1,003,651 1,137,942 Property, plant, and equipment, at cost 3,231,071 2,946,901 Accumulated depreciation and amortization (1,497,804) (1,305,267) ----------- ----------- Property, plant, and equipment, net 1,733,267 1,641,634 Investment in joint venture 192,128 176,821 Other assets 124,946 122,070 ----------- ----------- $ 3,053,992 $ 3,078,467 =========== =========== Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Notes payable to banks $ 12,902 $ 26,770 Accounts payable 166,791 241,916 Accrued compensation and benefits 73,333 106,347 Accrued liabilities 107,617 103,404 Income tax payable 148 56,297 Deferred income on shipments to distributors 85,936 100,057 Current portion of long-term debt and capital lease obligations 27,711 41,642 ----------- ----------- Total current liabilities 474,438 676,433 Deferred income taxes 97,407 84,607 Long-term debt and capital lease obligations, less current portion 445,489 214,965 Stockholders' equity: Capital stock: Common stock, par value 1,413 1,050 Capital in excess of par value 943,077 908,989 Retained earnings 1,092,168 1,192,423 ----------- ----------- Total stockholders' equity 2,036,658 2,102,462 ----------- ----------- $ 3,053,992 $ 3,078,467 =========== =========== </TABLE> (1) The information in this column was derived from the Company's Supplemental Audited Consolidated Balance Sheet as of December 31, 1995. * Restated from previously released financial information to reflect the January 1996 merger with NexGen, Inc., which has been accounted for under the pooling-of-interests method. See accompanying notes - ---------------------- 4 ADVANCED MICRO DEVICES, INC. --------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited) (Thousands) <TABLE> <CAPTION> Nine Months Ended ------------------------------------ October 1, September 29, 1995 1996 (Restated)* -------------- ------------ <S> <C> <C> Cash flows from operating activities Net income (loss) (47,707) $ 206,982 Adjustments to reconcile net income (loss) to net cash: provided by (used in) operating activities Depreciation and amortization 248,457 180,622 Net (gain) loss on sale of property, plant, and equipment 6,252 (348) Write-down of property, plant, and equipment 1,068 513 Net gain realized on sale of available-for-sale securities (41,028) (2,707) Compensation recognized under employee stock plans 2,478 1,863 Undistributed income of joint venture (41,800) (13,426) Changes in operating assets and liabilities: Net increase in receivables, inventories, prepaid expenses, and other assets (56,420) (84,792) Payment of litigation settlement - (20,000) Net (increase) decrease in deferred income taxes 11,000 (16,900) Increase (decrease) in income tax payable (59,471) 56,260 Net increase (decrease) in payables and accrued liabilities (98,972) 111,232 -------------- ------------ Net cash provided by (used in) operating activities (76,143) 419,299 -------------- ------------ Cash flows from investing activities: Purchase of property, plant, and equipment (349,132) (491,176) Proceeds from sale of property, plant, and equipment 2,278 3,046 Purchase of available-for-sale securities (518,317) (628,079) Proceeds from sale of available-for-sale securities 692,741 582,072 Purchase of held-to-maturity debt securities - (566,619) Proceeds from maturities of held-to-maturity debt securities - 508,635 Investment in joint venture - (18,019) -------------- ------------ Net cash used in investing activities (172,430) (610,140) -------------- ------------ Cash flows from financing activities: Proceeds from borrowings 432,760 227,828 Payments on capital lease obligations and other debt (230,377) (117,270) Proceeds from issuance of stock 28,622 96,051 Redemption of preferred stock and stockholder rights - (2,501) Payments of preferred stock dividends - (10) -------------- ------------ Net cash provided by financing activities 231,005 204,098 -------------- ------------ Net increase (decrease) in cash and cash equivalents (17,568) 13,257 Cash and cash equivalents at beginning of period 126,316 85,966 -------------- ------------ Cash and cash equivalents