Advanced Micro Devices (AMD)
Q4 2010 Earnings Call
January 20, 2011 5:00 pm ET
Ruth Cotter - Director, Investor Relations
Richard Bergman - Senior Vice President and General Manager of Products Group
Robert Rivet - Chief Operations & Administrative Officer and Executive Vice President
Thomas Seifert - Interim Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Senior Vice President
David Wong - Wells Fargo Securities, LLC
Shawn Webster - Macquarie Research
James Covello - Goldman Sachs Group Inc.
Romit Shah - Lehman Brothers
Uche Orji - UBS Investment Bank
Glen Yeung - Citigroup Inc
Stacy Rasgon - Bernstein Research
Christopher Danely - JP Morgan Chase & Co
Patrick Wang - Wedbush Securities Inc.
Srini Pajjuri - Credit Agricole Securities (USA) Inc.
John Pitzer - Crédit Suisse AG
Ambrish Srivastava - BMO Capital Markets U.S.
Timothy Luke - Barclays Capital
Doug Freedman - Gleacher & Company, Inc.
Previous Statements by AMD
» Advanced Micro Devices CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Advanced Micro Devices Inc. Q2 2010 Earnings Conference Call
» Advanced Micro Devices, Inc. Q1 2010 Earnings Call Transcript
Thank you and welcome to AMD's fourth quarter and year-end earnings conference call. Starting this quarter, we are providing written CFO commentary, which will contain additional information regarding AMD's results and outlook and can be found on the IR section of AMD's website at quarterlyearnings.amd.com. Participants on today's conference call are Thomas Seifert, our Chief Financial Officer and interim CEO; and Rick Bergman, Senior Vice President and General Manager, AMD's Product Group. This is a live call and will be replayed via webcast on amd.com. There will also be a telephone replay. The number for the replay is (888)266-2081. Outside of the United States, the number is (703)925-2533. The access code for both is 1502479. The telephone replay will be available for the next 10 days starting later this evening. I would like to highlight a few dates for you this afternoon. Thomas will present at the Goldman Sachs Technology and Internet Conference on the 16th of February in San Francisco and our first quarter quiet time will begin at the close of business on Friday, March 18.
On December 27, AMD announced that starting with the first fiscal quarter of 2011, the company will begin accounting for its investment in GLOBALFOUNDRIES under the cost method of accounting and will no longer recognize any share of GLOBALFOUNDRIES' net income or loss and its statements of operation. The transition to cost-based accounting was triggered by the contribution of Chartered Semiconductor to GLOBALFOUNDRIES and amendments to certain agreements.
As a result of the contribution, AMD's ownership of the newly combined entity on a fully diluted basis is approximately 14%. Reconciliation for all non-GAAP financial measures discussed on today's call is included in our financial tables that accompany our earnings release available in the Investor Relations section of amd.com.
Before we begin today's call, I'd like to caution everyone that we will be making forward-looking statements about management's expectations. Investors are cautioned that those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and involve risks and uncertainties that could cause actual results to differ materially from our current expectations.
The semiconductor industry is generally volatile and market conditions are particularly difficult to forecast especially in light of the current state of the economy. We encourage you to review our filings with the SEC, where we discuss the risk factors that could cause actual results to differ materially from our expectations. You'll find detailed discussions about such risk factors in our most recent SEC filings, AMD's quarterly report on Form 10-Q for the quarter ended September 25, 2010. Now with that, I'd like to hand the call over to Thomas.
Thank you, Ruth. Before we begin, I would like to take a moment to thank Dirk Meyer for his leadership as AMD's CEO over the past two and a half years. Indeed, he leaves behind a much stronger company than the one he inherited heard, a much nimbler AMD with the people, the IP and the spirit to fully realize the breadth of opportunities in front of us.
As you know, AMD announced last week that our Board has formed a CEO search committee led by Bruce Claflin, Executive Chairman of AMD's Board of Directors. The Board has retained an executive search firm to assist with this process. The search is obviously a priority and the committee is moving the process forward to ensure that we select a person with the right vision, experience and track record to lead AMD into the future and to create increased shareholder value over time.
While we don't plan on communicating further until the search process has concluded, we will update you should events warrant. That being said, we are here to focus on our fourth quarter and full year earnings results. 2010 was an important year for AMD. It was a year in which we achieved many of our major milestones, resulting in a company with solid momentum and well positioned for the opportunities immediately ahead.
First, we demonstrated that our fab-less business model works, restructuring our balance sheet and reducing our overall debt by $400 million excluding GLOBALFOUNDRIES, improving our 2010 non-GAAP gross margin by nine percentage points over the prior year, and generating $553 million in non-GAAP operating income and $355 million in adjusted free cash flow in 2010.