AMD Advanced Micro DevicesPresented By Tio Bennett.docx

AMD
Advanced Micro Devices
Presented By:
Tio Bennett
Introduction
AMD – Advanced Micro Devices
With AMD facing a potential bankruptcy in October of 2014,
previous Vice President, Lisa Su, became the CEO of the
organization for a historic recovery.
Leading Global Innovation – worldwide leader in high
performance graphics and compute technology.
Record breaking growth – over 2000% stock gain (2015-
Current)
Stocks - 52-Week High: $58.90 | 52-Week Low: $22.82
Current Net Worth – $6.73B Company
Today’s Market Cap: $52.78 billion
AMD’s outstanding shares were, 1.120B as of Dec. 31st, 2019.
Headquarters is located in Santa Clara, CA
Founded on May 1st, 2069 in Sunnyvale, CA by Jerry Sanders,
Jack Gifford, John Carey, Larry Stenger, Frank Botte, Edwin
Turney, Sven Simonsen and Jim Giles.
Currently employs about 11,400 employees as of 2019
Invest in AMD
Innovations
Creators of the world’s 1st 7nm microprocessors. In both
computing and graphics technologies.

World leader in high performance processors, surpassing sales
of their main competitor, Intel.
Bringing enterprise level quality performance to the consumer
market
Demand
High performance mobile processors with on-board graphics on
high demand by many mainstream PC manufacturers, such as
Lenovo, Asus, and Acer.
AMD’s “Zen” Core architecture, leads the market of top rated
performance for gamers and content creators.
AMD – Current Events
2018
Press Release of the World’s first 7nm GPUs, to be featured in
the next era of AI, High Performance Computing and Cloud
Computing.
AMD is introduced into the Supercomputer industry with their
new High Frequency AMD EPYC™ Processors. Leading for
Discovery and Accelerating Innovation
2019
Professional level graphics performance introduced with AMD’s
new 7nm discrete mobile GPUs in the new Apple MacBook Pro.
AMD Wins the “Best-in-Class” Performance aware from
Supercomputers to HPC in the Cloud at SC19
2020
Next generation of AMD EPYC™ processors for high
performance workstation, database, and commercial HPC
Competition & Environment
AMD’s Primary Competitor: Intel
In a computing environment, AMD’s competition would be Intel
on the CPU market and NVidia in the GPU market.
The environment in both are within a race of dollar to
performance ratios and frequency computing power.

AMD combats their competitors with leading innovation by
being the first to implement and expand the new 7nm
processors.
The environment is favorable as technology advances, virtual
reality and AI being examples.
Profitability
Income StatementAMD, Income Statement (USD $ in
Millions)Year Ending Dec 2019 (Update)Year Ending Dec 2018
(Update)Year Ending Dec 2017 (Restated)Year Ending Dec
2016 (Update)Net
Sales6,731.006,475.005,253.004,272.00Revenue6,731.006,475.0
05,253.004,272.00Total
Revenue6,731.006,475.005,253.004,272.00Cost of Revenue-
3,863.00-4,028.00-3,466.003,274.00Cost of Revenue, Total-
3,863.00-4,028.00-3,466.003,274.00Gross
Profit2,868.002,447.001,787.00-
998Selling/General/Administrative Expense471344322294Labor
& Related Expense62423835Advertising
Expense217176156131Selling/General/Administrative
Expenses, Total750562516460Research &
Development1,547.001,434.001,196.001,008.00Restructuring
Charge--00-10Other Unusual Expense (Income)11612-40-
20Unusual Expense (Income)11612-40-30Total Operating
Expense6,276.006,036.005,138.004,712.00Operating
Income455439115-440Interest Expense - Non-Operating-94-
121-126-156Interest Expense, Net Non-Operating-94-121-126-
156Interest Income, Non-Operating15186--Investment Income,
Non-Operating-1-3-33Interest/Investment Income, Non-
Operating141533Interest Income (Expense), Net-Non-
Operating, Total-80-106-123-153Other Non-Operating Income

(Expense)-3-30145Other, Net-3-30145Net Income Before
Taxes372330-8-448
Growth
AMD’s growth is a result of the initiation and innovation to
become a high-performance leader.
The introduction to AMD’s product line of Ryzen and new
Radeon products were quickly adopted by the industry.
Increasing manufacture output and fulfilling the supply and
demand of the market, AMD saw drastic double digit percentage
increases year by year over a 4 year span.
Strong demands beginning in 2016 for computing and graphics
drew in large growths.
REVENUE
$ Millions
Leadership Products Drive Revenue Growth
2016 2017 2018 2019 4.3 5.3 6.5 6.7
Premium Products Drive Margin Expansion
2016 2017 2018 2019 0.23 0.34 0.38 0.43

Operating Margin
Solid Growth With OpEx Investments
[VALUE]
2016 2017 2018 2019 -0.09 0.02 7.0000000000000007E-2
0.09
NET INCOME
$ Millions
Significant Growth In Profitability
2016 2017 2018 201 9 -498 -33 337 341
AMD & Intel Processor Sales
Sales figures from one of the largest retailers of computer parts
AMD dominated the market over its top competitor, Intel.
AMD introducing their back to back new generation lineups of
processors
~
Very competitively priced, further highlighting their high-
performance per dollar lead
~
AMD Ryzen 3000 Series was a major improvement from
previous generations, and the expected 4000 Series set to
release in 2020, we should expect the same result

Cash Flow & Liquidity
Cash Flow & LiquidityCash Flow
($ in In millions of USD except for per share items)Year Ending
Dec 2019 (Update)Year Ending Dec 2018 (Update)Year Ending
Dec 2017 (Restated)Year Ending Dec 2016 (Update)Net
Income/Starting Line341337-33-497Depreciation –
Supplemental222170144133Depreciation/Depletion222170144.0
0133Deferred Taxes-4-4--11Unusual Items2188412.0068Equity
in Net Earnings (Loss)---3.00-144Other Non-Cash
Items258174136339Non-Cash Items476258145263Accounts
Receivable-623-806-103222Inventories-137-151-3.00-73Prepaid
Expenses-162-98-173-165Accounts
Payable712129138Payable/Accrued373207658Changes in
Working Capital-542-727-244180
AMD Cash Flow has an overall positive cash flow. Recovering
from a predicted bankruptcy at the time, AMD was able to
secure their climb in net income once the company made huge
strides with their Ryzen Processors and next generation Radeon
graphics cards. From 2017 to 2018, there was a surge in
Accounts Receivables by $703M as manufacturers demanded for
their next generation Ryzen desktop and mobile processors.
AMD has a continued drive to lead into the next years and with
another generation of Ryzen, processors coming to release by
end of 2020, a similar trend is expected as through projected
costs to performance exceeds what Intel has planned on their
next release. AMD has re-entered the datacenter computing
industry with their next line-up of EPYC processors to reach the
professional market. In the event that AMD, fails to account for
Nvidia’s drive to continue their lead in graphics computing,
AMD could fall short of delivering top tier performance
numbers for the second largest of their technology field.

Cash Flow & LiquidityCash Flow
($ in In millions of USD except for per share items)Year Ending
Dec 2019 (Update)Year Ending Dec 2018 (Update)Year Ending
Dec 2017 (Restated)Year Ending Dec 2016 (Update)Cash from
Operating Activities493.0034.001290Purchase of Fixed Assets-
217-163-113-77Capital Expenditures-217-163-113-
77Sale/Maturity of Investment32545223342Purchase of
Investments-284-123-222--Other Investing Cash
Flow2771582Other Investing Cash Flow Items, Total68-
759344Cash from Investing Activities-149-170-54267Other
Financing Cash Flow-7-1-13-4Financing Cash Flow Items-7-1-
13.00-4Issuance (Retirement) of Stock, Net5237020687Issuance
(Retirement) of Debt, Net-473-41-40-561Cash from Financing
Activities4328-33122Net Change in Cash387-108-75479Net
Cash - Beginning Balance1.08M1.19M1.27M785Net Cash -
Ending Balance1.47M1.08M1.19M1.26MLiquidity Ratio:
Current1.951.781.761.88Liquidity Ratio:
Quick1.431.211.071.17Liquidity Ratio: Cash0.640.580.80.94
(Has your company generated cash and will it continue to
generate cash going forward?)
Capital Structure & Financial Leverage
AMD - Capital Structure
AMD's capital structure comes primarily from a combination of
bonds and common stock
At the end of 2019, AMD had a total of 6.028 Billion in total
liabilities and stockholder equity. In their annual statement
they reported the use of $473 Million for debt reduction in order

to continue the path towards strengthening their net cash
position.
Common stock shareholders own $9.975 Billion of the equity in
AMD. The company has 53 Million in treasury stock. As of
December 28, 2019, 2,250 shares have been authorized, 1,175
shares issued, and 1,170 shares are outstanding.
The company posted a negative retained earnings of $7.095
Billion as of the end of 2019, with no additional
outstanding accumulated other comprehensive income. With
this retained earnings, AMD reported a total of 2.827 Billion in
total stockholders' equity at the end of 2019.
AMD – Debt Structuring
As of December 2019, AMD had no short-term debt, but it does
have 2,359 Million in current liabilities from accounts payable,
accrued, and other current liabilities.
AMD has a secured revolving credit account with Wells Fargo
Bank for up to $500 Million in financing. At the end of 2019,
there were no borrowings outstanding under
their Credit Agreement
The company has a combined long-term debt and other long-
term liabilities totaling 8.42 Million with 3,397 Million coming
from contractual obligations as depicted in the chart.
AMD has $563 Million in term senior notes and $102 Million in
interest obligation from aggregate convertible senior notes.
The company sustains 287 Million in operating leases, 2,290
Million in purchase obligations, and an additional 155 Million
in other long-term liabilities.
Consolidated Contractual Cash Obligations as of December 28,
2019

Cash Obligations
($ in In millions )Total Term Debt563Aggregate Interest
Obligation102Other Long-Term Liabilities155Operating
Leases287Purchase Obligations2290Total Contractual
Obligations3,397
AMD's Financial Leverage
•Debt Ratio= (6,028,000 -2,827,000)/6,028,000 --> 0.531 or
53.1% (2019)
•Debt Ratio=(3,540,000 -1,266,000)/3,540,000 --> 0.642 or
64.2% (2018)
•All dollar amounts are in thousands
•In 2019, AMD’s debt ratio shows that for every dollar of its
assets, there are around 53 cents of debt.
•In 2018, AMD’s debt ratio shows that for every dollar of its
assets, there are around 64 cents of debt.
•A debt ratio of .53 is conceived to be less risky since AMD has
three times as many assets as liabilities.
•A debt ratio of .64 is considered less risky since AMD has
three times as many assets as liabilities.
•Consequently, Advanced Micro Devices’ creditors own just a
bit less than half of the company and the shareholders own the
remainder of the assets.
AMD's Financial Leverage
•Advanced’s times interest earned
= EBIT/(Interest Expense)=724,000/94,000→7.702 (2019)
•Advanced’s times interest earned

= EBIT/(Interest Expense)=621,000/121,000→5.132 (2018)
All dollar amounts are in thousands
In 2019, Advanced covered around two times over its interest
obligation by its earnings before it payed its interest expense
and taxes.
In 2019, Advanced’s TIE ratio is a lesser risk to its creditors
because the company could afford to pay its interest payments
to lenders when they are due.
In 2018, Advanced’s TIE is considered less risky to its creditors
because the company was able to pay their interest payments to
lenders when they were due. Furthermore, there is no long-term
concern for ADM’s solvency.
SELECTED FINANCIAL DATA
In addition to the information presented above, you will provide
the following slides. The
first slide, titled
SELECTED FINANCIAL DATA
, which has the most important
financial numbers from the last two years. This could be
information from the main
financial statements. From IS you could include revenue, gross
profit, operating profit,
interest expense, EBITDA, and net income. From SOCF you
include operating cash flow,
investing cash flow, financing cash flow, and change in cash.
From the BS, assets, cash
and cash equivalents, liabilities, total debt, shareholder's equity.
If you feel other numbers
are significant for your particular company, feel free to include
them as well.
KEY RATIOS

The second slide, titled
KEY RATIOS
, should have all relevant financial ratios for the
last two fiscal years that you have calculated for the purpose of
the project.
To earn the
max points, apply 10 relevant ratios we learned in chapter 14 to
support your
conclusion.
Conclusion
Final Recommendation
The purpose is to summarize all of your findings. You can
include a summary of what
they do, its income performance, its cash flow ability, its
overall financial position
(balance sheet). Also include non-financial factors that you
think impacts the assigned
investment decision. Conclude with your final recommendation.
If the company is rated
by one of the major risk rating agencies, Standard and Poor's,
Moody's, or Fitch
Ratings, include the rating that has been assigned by those
parties, or if you can find
another 3
rd
party rating from an analyst on the stock include this. I know
this may
not be as easy to get, so just a marginal point total is earned
here.
The last slide
should list your references where you retrieved the financial
statements.

References
New AMD-Powered Supercomputers Unleash Discovery and
Accelerate Innovation
https://ir.amd.com/news-releases/news-release-details/new-amd-
powered-supercomputers-unleash-discovery-and-accelerate
AMD Unveils World’s First 7nm Datacenter GPUs -- Powering
the Next Era of Artificial Intelligence, Cloud Computing and
High Performance Computing (HPC)
https://ir.amd.com/news-releases/news-release-details/amd-
unveils-worlds-first-7nm-datacenter-gpus-powering-next-era
AMD Delivers Best-in-Class Performance from Supercomputers
to HPC in the Cloud at SC19
https://ir.amd.com/news-releases/news-release-details/amd-
delivers-best-class-performance-supercomputers-hpc-cloud
News Releases https://ir.amd.com/news-
releases?field_nir_news_date_value%5Bmin%5D=2020&items_
per_page=10#views-exposed-form-widget-news-widget-news-ul
AMD Ryzen 3000 Sales Hit All-Time High, Ryzen 7 3700X &
Ryzen 5 3600 Sales Reach 2x Total Number of Intel CPUs Sold
https://wccftech.com/amd-ryzen-3000-cpu-sales-all-time-high-
versus-intel-9th-gen-core/
AMD Balance Sheet
https://finance.yahoo.com/quote/AMD/balance-sheet/
AMD Cash Flow
https://finance.yahoo.com/quote/AMD/cash-flow?p=AMD
AMD Income Statement
https://finance.yahoo.com/quote/AMD/financials?p=AMD
AMD 2019 Annual Report on Form 10-K
https://ir.amd.com/static-files/480b482b-79ee-4b43-bcda-
0d86dedfeb04
AMD 2018 ANNUAL REPORT ON FORM 10-K
https://ir.amd.com/static-files/a388f1a0-6bbd-4218-96ec-
d9cf41544e6b

AMD Advanced Micro DevicesPresented By Tio Bennett.docx

AMD Advanced Micro DevicesPresented By Tio Bennett.docx

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