Financial: AMD Reports Second Quarter Results

Edge: Work-Group Computing Report, July 13, 1998

Advanced Micro Devices, Inc.

CONSOLIDATED BALANCE SHEETS

(Thousands)

                                June 28,            December 28,

                                  1998                 1997

                               (Unaudited)           (Audited)

Assets

Current assets:

  Cash, cash

    equivalents and

    short-term investments     $ 692,443            $ 467,032

  Accounts receivable, net      239,602              329,111

  Inventories                   171,633              168,517

  Deferred income taxes         168,841              160,583

  Prepaid expenses and

    other current assets          55,135               50,024

  Total current assets        1,327,654            1,175,267

Property, plant and

equipment, net                2,163,009            1,990,689

Investment in joint venture      201,560              204,031

Other assets                     166,361              145,284

                             $ 3,858,584          $ 3,515,271

Liabilities and Stockholders' Equity

Current liabilities:

  Notes payable to banks      $   5,027            $   6,601

  Accounts payable              340,911              359,536

  Accrued compensation

    and benefits                  82,266               63,429

  Accrued liabilities           142,574              134,656

  Income tax payable             16,787               12,676

  Deferred income on

    shipments to distributors     81,284               83,508

  Current portion of

    long-term debt and

    capital lease obligations    123,257               66,364

  Total current liabilities     792,106              726,770

Deferred income taxes              5,461               96,269

Long-term debt and capital

lease obligations,

less current portion          1,142,568              662,689

Stockholders' equity:

  Capital stock:

      Common stock, par value      1,445                1,428

     Capital in excess

      of par value             1,044,074            1,018,884

     Retained earnings           938,842            1,066,131

     Accumulated other

      comprehensive income       (65,912)             (56,900)

  Total stockholders' equity  1,918,449            2,029,543

                            $ 3,858,584          $ 3,515,271

Advanced Micro Devices, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Thousands except per share amounts)

                 Quarters Ended             Six Months Ended

                    (Unaudited)                (Unaudited)

            June 28,  Mar. 29,  June 29,      June 28,   June 29,

              1998      1998      1997          1998       1997

Net sales  $ 526,538 $ 540,856 $ 594,561    $1,067,394 $1,146,560

Cost of sales390,140   423,591   372,266       813,731    721,342

Research and

development 139,158   128,120   110,021       267,278    214,929

Marketing,

general and

administrative

             101,198    88,214   102,983       189,412    197,502

             630,496   639,925   585,270     1,270,421  1,133,773

Operating

income

(loss)     (103,958)  (99,069)    9,291      (203,027)    12,787

Litigation

settlement       -    (11,500)        -       (11,500)         -

Interest income

and other, net8,518     5,581     9,718        14,099     23,040

Interest

expense     (17,663)  (12,472)   (9,958)      (30,135)  (19,368)

Income (loss)

before income

taxes and

equity in

joint

  venture  (113,103)  (117,460)   9,051       (230,563)   16,459

Provision

(benefit) for

income taxes  (44,110)(46,997)    2,630        (91,107)    4,778

Income (loss)

before equity

in joint

venture    (68,993)   (70,463)    6,421       (139,456)   11,681

Equity in net

income of

joint venture4,433      7,736     3,547         12,169    11,238

Net income

(loss)   $ (64,560) $ (62,727)  $ 9,968     $ (127,287) $ 22,919

Net income

(loss) per

common share

  - Basic   $ (0.45)   $ (0.44)   $ 0.07        $ (0.89)   $ 0.16

  - Diluted $ (0.45)   $ (0.44)   $ 0.07        $ (0.89)   $ 0.16

Shares used

in per share

calculation

  - Basic   143,462    142,503   140,255        142,983   139,435

  - Diluted 143,462    142,503   147,919        142,983   147,335

Advanced Micro Devices, Inc.

NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS(a)

(Includes Pre-Tax FASL Investment Equity

Income in Operating Income (Loss))

(Thousands except per share amounts)

                  Quarters Ended               Six Months Ended

                    (Unaudited)                   (Unaudited)

           Jun. 28   Mar. 29   Jun. 29       June 28,    June 29,

               1998      1998      1997          1998        1997

Net sales  $ 526,538  $ 540,856  $ 594,561  $ 1,067,394 $1,146,560

Cost of sales390,140    423,591    372,266      813,731    721,342

Income from

equity

investment

in FASL      (7,416)   (15,988)    (7,256)     (23,404)  (19,738)

Research and

development 139,158    128,120    110,021      267,278    214,929

Marketing,

general and

administrative

             101,198     88,214    102,983      189,412    197,502

             623,080    623,937    578,014    1,247,017  1,114,035

Operating

income (loss)(96,542)  (83,081)    16,547     (179,623)    32,525

Litigation

settlement        -    (11,500)         -      (11,500)         -

Interest income

and other, net8,518      5,581      9,718       14,099     23,040

Interest

expense     (17,663)   (12,472)    (9,958)     (30,135)  (19,368)

Income (loss)

before income

taxes      (105,687)  (101,472)    16,307     (207,159)    36,197

Provision

(benefit)

for income

taxes       (44,110)   (46,997)     2,630      (91,107)     4,778

Provision for

taxes on equity

income in FASL2,983      8,252      3,709       11,235      8,500

Net income

(loss)    $ (64,560) $ (62,727)  $  9,968   $ (127,287) $  22,919

Net income (loss)

per common

share

  - Basic $   (0.45) $   (0.44)  $   0.07   $    (0.89) $    0.16

  - Diluted  $(0.45) $   (0.44)  $   0.07   $    (0.89) $    0.16

Shares used in

per share

calculation

  - Basic   143,462    142,503    140,255      142,983    139,435

  - Diluted 143,462    142,503    147,919      142,983    147,335

(a) The above statements of operations are not in accordance with

generally accepted accounting principles (GAAP) in that the pre-tax

equity income of FASL has been reclassified and included in the

determination of operating income (loss).  Net income (loss) and

related net income (loss) per common share amounts are the same as

those reported under GAAP.

                             AMD

                   Selected Corporate Data

                         (Unaudited)

Product Line

Breakdown      Q2 '98              Q1 '98              Q2 '97

        % of Sales Revenue  % of Sales Revenue   % of Sales Revenue

Communications

Group

(CPD, EPD, NPD) 23  $ 123M         28  $ 149M          31   $ 183M

Vantis (PLD)    10     52M         10     56M          10      57M

Memory Group (MG)25   132M         31    167M          30     181M

Computation

Products Group

(CMD, PPD, TMD)42    220M         31    169M          29     174M

Other Data         Q2 '98            Q1 '98              Q2 '97

Depreciation

and Amortization $  113M          $  112M(a)           $  94M

Capital Additions    314M             181M(a)             160M

Headcount          13,313           12,936              12,382

International Sales   48%              55%                 54%(a)

Restated from Q1 '98.