Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-07882 | |
Entity Registrant Name | ADVANCED MICRO DEVICES INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-1692300 | |
Entity Address, Address Line One | 2485 Augustine Drive | |
Entity Address, City or Town | Santa Clara, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 408 | |
Local Phone Number | 749-4000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | AMD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,113,627,528 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000002488 | |
Current Fiscal Year End Date | --12-28 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 1,801 | $ 1,653 | $ 4,604 | $ 5,056 |
Cost of sales | 1,024 | 992 | 2,685 | 3,146 |
Gross profit | 777 | 661 | 1,919 | 1,910 |
Research and development | 406 | 363 | 1,152 | 1,063 |
Marketing, general and administrative | 185 | 148 | 544 | 424 |
Licensing gain | 0 | 0 | (60) | 0 |
Operating income | 186 | 150 | 283 | 423 |
Interest expense | (24) | (30) | (76) | (92) |
Other expense, net | (36) | (6) | (40) | (4) |
Income before income taxes and equity income (loss) | 126 | 114 | 167 | 327 |
Provision (benefit) for income taxes | 7 | 12 | (4) | 26 |
Equity income (loss) in investee | 1 | 0 | 0 | (2) |
Net income | $ 120 | $ 102 | $ 171 | $ 299 |
Earnings per share | ||||
Basic (in usd per share) | $ 0.11 | $ 0.10 | $ 0.16 | $ 0.31 |
Diluted (in usd per share) | $ 0.11 | $ 0.09 | $ 0.15 | $ 0.28 |
Shares used in per share calculation | ||||
Basic (in shares) | 1,097 | 987 | 1,075 | 976 |
Diluted (in shares) | 1,117 | 1,076 | 1,107 | 1,058 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 120 | $ 102 | $ 171 | $ 299 |
Unrealized gains (losses) on cash flow hedges: | ||||
Unrealized losses arising during the period | (9) | (5) | ||
Losses reclassified into income | 2 | 6 | ||
Total change in unrealized gains (losses) on cash flow hedges | (7) | 1 | ||
Unrealized losses arising during the period | (5) | (16) | ||
Losses reclassified into income | 5 | 0 | ||
Total change in unrealized gains (losses) on cash flow hedges | 0 | (16) | ||
Cumulative-effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | 0 | 0 | 0 | 2 |
Total comprehensive income | $ 113 | $ 102 | $ 172 | $ 285 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,156 | $ 1,078 |
Marketable securities | 53 | 78 |
Accounts receivable, net | 1,393 | 1,235 |
Inventories, net | 1,040 | 845 |
Prepayments and receivables-related parties | 17 | 34 |
Prepaid expenses and other current assets | 253 | 270 |
Total current assets | 3,912 | 3,540 |
Property and equipment, net | 453 | 348 |
Operating lease right-of-use assets | 205 | 0 |
Goodwill | 289 | 289 |
Investment: equity method | 59 | 58 |
Other assets | 335 | 321 |
Total assets | 5,253 | 4,556 |
Current liabilities: | ||
Short-term debt, net | 0 | 136 |
Accounts payable | 763 | 834 |
Payables to related parties | 215 | 207 |
Accrued liabilities | 837 | 783 |
Other current liabilities | 49 | 24 |
Total current liabilities | 1,864 | 1,984 |
Long-term debt, net | 872 | 1,114 |
Long-term operating lease liabilities | 201 | 0 |
Other long-term liabilities | 140 | 192 |
Contingencies (See Note 13) | ||
Capital stock: | ||
Common stock, par value $0.01; shares authorized: 2,250; shares issued: 1,119 and 1,010; shares outstanding: 1,114 and 1,005 | 11 | 10 |
Additional paid-in capital | 9,490 | 8,750 |
Treasury stock, at cost (shares issued: 5 and 5) | (53) | (50) |
Accumulated deficit | (7,265) | (7,436) |
Accumulated other comprehensive loss | (7) | (8) |
Total stockholders’ equity | 2,176 | 1,266 |
Total liabilities and stockholders’ equity | $ 5,253 | $ 4,556 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,250,000,000 | 2,250,000,000 |
Common stock, shares issued (in shares) | 1,119,000,000 | 1,010,000,000 |
Common stock, shares outstanding (in shares) | 1,114,000,000 | 1,005,000,000 |
Treasury stock, shares (in shares) | 5,000,000 | 5,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 171 | $ 299 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 158 | 127 |
Stock-based compensation | 140 | 101 |
Amortization of debt discount and issuance costs | 25 | 29 |
Amortization of operating lease right-of-use assets | 27 | 0 |
Loss on debt redemption, repurchase and conversion | 48 | 7 |
Loss on sale/disposal of property and equipment | 34 | 0 |
Other | (13) | 2 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (158) | (803) |
Inventories | (195) | (44) |
Prepayments and receivables - related parties | 17 | (37) |
Prepaid expenses and other assets | (32) | (9) |
Payables to related parties | 8 | 40 |
Accounts payable, accrued liabilities and other | (179) | 202 |
Net cash provided by (used in) operating activities | 51 | (86) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (175) | (122) |
Purchases of available-for-sale debt securities | (284) | (45) |
Proceeds from maturity of available-for-sale debt securities | 309 | 35 |
Collection of deferred proceeds on sale of receivables | 25 | 50 |
Other | 2 | 0 |
Net cash used in investing activities | (123) | (82) |
Cash flows from financing activities: | ||
Repayments of short-term debt | (70) | 0 |
Proceeds from warrant exercise by related party | 449 | 0 |
Proceeds from issuance of common stock through employee equity incentive plans | 38 | 44 |
Payments to extinguish long-term debt | (261) | (15) |
Other | (6) | (1) |
Net cash provided by financing activities | 150 | 28 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 78 | (140) |
Cash, cash equivalents, and restricted cash at beginning of period | 1,083 | 1,191 |
Cash, cash equivalents, and restricted cash at end of period | 1,161 | 1,051 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment, accrued but not paid | 120 | 46 |
Issuance of common stock to partially settle convertible debt, net | 108 | 0 |
Issuance of treasury stock to partially settle debt | 7 | 103 |
Deferred proceeds on sale of receivables | 0 | 21 |
Other | 9 | 9 |
Reconciliation of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 1,156 | 1,046 |
Restricted cash included in Prepaid expenses and other current assets | 5 | 5 |
Total cash, cash equivalents, and restricted cash | $ 1,083 | $ 1,191 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional paid-in capital | Treasury stock | Accumulated deficit | Accumulated other comprehensive income (loss) |
Beginning balance at Dec. 30, 2017 | $ 9 | $ 8,464 | $ (108) | $ (7,775) | $ 6 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Common stock issued under employee equity incentive plans, net of tax withholding | 1 | 44 | (5) | |||
Stock-based compensation | 101 | |||||
Issuance of treasury stock to partially settle debt | 57 | 47 | ||||
Other | (1) | |||||
Net income | $ 299 | 299 | ||||
Cumulative effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | 2 | 2 | ||||
Other comprehensive income (loss) | (16) | |||||
Ending balance at Sep. 29, 2018 | 1,125 | 10 | 8,666 | (67) | (7,474) | (10) |
Beginning balance at Jun. 30, 2018 | 10 | 8,564 | (109) | (7,576) | (10) | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Common stock issued under employee equity incentive plans, net of tax withholding | 9 | (5) | ||||
Stock-based compensation | 36 | |||||
Issuance of treasury stock to partially settle debt | 57 | 47 | ||||
Net income | 102 | 102 | ||||
Cumulative effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | 0 | |||||
Ending balance at Sep. 29, 2018 | 1,125 | 10 | 8,666 | (67) | (7,474) | (10) |
Beginning balance at Dec. 29, 2018 | 1,266 | 10 | 8,750 | (50) | (7,436) | (8) |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Common stock issued under employee equity incentive plans, net of tax withholding | 38 | |||||
Stock-based compensation | 140 | |||||
Issuance of common stock upon warrant exercise | 1 | 449 | ||||
Issuance of common stock to partially settle convertible debt, net | 108 | |||||
Issuance of treasury stock to partially settle debt | 4 | 3 | ||||
Other | 1 | |||||
Other | (6) | |||||
Net income | 171 | 171 | ||||
Cumulative effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | 0 | |||||
Other comprehensive income (loss) | 1 | |||||
Ending balance at Sep. 28, 2019 | 2,176 | 11 | 9,490 | (53) | (7,265) | (7) |
Beginning balance at Jun. 29, 2019 | 11 | 9,325 | (50) | (7,385) | 0 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Common stock issued under employee equity incentive plans, net of tax withholding | 3 | |||||
Stock-based compensation | 54 | |||||
Issuance of common stock to partially settle convertible debt, net | 108 | |||||
Other | (3) | |||||
Net income | 120 | 120 | ||||
Cumulative effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | 0 | |||||
Other comprehensive income (loss) | (7) | |||||
Ending balance at Sep. 28, 2019 | $ 2,176 | $ 11 | $ 9,490 | $ (53) | $ (7,265) | $ (7) |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. and its subsidiaries (the Company or AMD) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three and nine months ended September 28, 2019 shown in this report are not necessarily indicative of results to be expected for the full year ending December 28, 2019 . In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and s tockholders' equity . All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Certain prior period amounts have been reclassified to conform to current period presentation. The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. The three and nine months ended September 28, 2019 and September 29, 2018 each consisted of 13 weeks and 39 weeks, respectively. Principles of Consolidation. The condensed consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Significant Accounting Policies. Except for the accounting policies highlighted below, there have been no material changes to the Company's significant accounting policies in Note 2 - Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Leases. The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement. When the Company determines the arrangement is a lease, or contains a lease, at lease inception, it then determines whether the lease is an operating lease or a finance lease. Operating and finance leases result in the Company recording a right-of-use (ROU) asset and lease liability on its balance sheet. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit interest rate if readily determinable or when the implicit interest rate is not readily determinable, the Company uses its incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes any lease incentives. Specific lease terms may include options to extend or terminate the lease when the Company believes it is reasonably certain that it will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. As allowed by the guidance, the Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities in the Company's condensed consolidated balance sheet. The Company's finance leases are immaterial. Recently Adopted Accounting Standards Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to increase transparency and comparability among organizations for lease recognition and disclosure. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet, while recognizing expenses on the income statements in a manner similar to legacy guidance. The Company adopted this standard in the first quarter of 2019, using the optional adoption method, which did not require an adjustment to comparative period financial statements, and recorded $228 million of right-of-use assets and $261 million of lease liabilities primarily related to office buildings in its consolidated balance sheet as of December 30, 2018. The Company's accounting for capital leases, now referred to as finance leases, remains unchanged. The Company's adoption of the new standard had no impact on its consolidated statement of operations or on net cash provided by or used in operating, financing, or investing activities on its consolidated statement of cash flows. Upon adoption of ASU 2016-02, the Company elected a transition practical expedient under the new accounting standard allowing it not to separate lease and non-lease components and instead to account for each separate lease component and non-lease component as a single lease component. The Company implemented internal controls and key system functionality to enable the preparation of financial information on adoption. Recently Issued Accounting Standards Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . This standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, using a modified retrospective adoption method. The Company will adopt this standard in the first quarter of 2020 and this standard will not have a material impact on its consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its consolidated financial statements. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 28, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Accounts Receivable, net As of September 28, 2019 and December 29, 2018 , Accounts receivable, net included unbilled accounts receivable of $176 million and $308 million , respectively. Unbilled receivables primarily represent work completed on semi-custom products under non-cancellable purchase orders that have no alternative use to the Company at contract inception, for which revenue has been recognized but not yet invoiced to customers. All unbilled accounts receivable are expected to be billed and collected within twelve months. Inventories, net September 28, December 29, (In millions) Raw materials $ 95 $ 134 Work in process 754 354 Finished goods 191 357 Total inventories, net $ 1,040 $ 845 Property and Equipment, net September 28, December 29, (In millions) Leasehold improvements $ 207 $ 179 Equipment 945 798 Construction in progress 70 78 Property and equipment, gross 1,222 1,055 Accumulated depreciation (769 ) (707 ) Total property and equipment, net $ 453 $ 348 Other Assets September 28, December 29, (In millions) Software technology and licenses, net $ 220 $ 226 Other 115 95 Total other assets $ 335 $ 321 Accrued Liabilities September 28, December 29, (In millions) Accrued compensation and benefits $ 212 $ 236 Marketing programs and advertising expenses 327 275 Software technology and licenses payable 43 28 Other 255 244 Total accrued liabilities $ 837 $ 783 Other Current Liabilities September 28, December 29, (In millions) Unearned revenue $ 5 $ 11 Operating lease liabilities 38 — Other 6 13 Total other current liabilities $ 49 $ 24 Unearned revenue represents consideration received or due from customers in advance of the Company satisfying its performance obligations. The unearned revenue is associated with any combination of development services, IP licensing and product revenue. Changes in unearned revenue were as follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Beginning balance $ 1 $ 67 $ 11 $ 85 Unearned revenue 4 37 5 124 Revenue recognized during the period — (86 ) (11 ) (186 ) Other — (15 ) — (20 ) Ending balance $ 5 $ 3 $ 5 $ 3 Revenue allocated to remaining performance obligations that are unsatisfied (or partially unsatisfied) as of September 28, 2019 is $523 million , which may include amounts received from customers but not yet earned and amounts that will be invoiced and recognized as revenue in future periods associated with any combination of development services, IP licensing and product revenue. The Company expects to recognize $220 million in the next 12 months . The revenue allocated to remaining performance obligations did not include amounts which have an original contractual expected duration of less than one year. |
Equity Joint Ventures
Equity Joint Ventures | 9 Months Ended |
Sep. 28, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Joint Ventures | ATMP Joint Ventures The Company holds a 15% equity interest in two joint ventures (collectively, the ATMP JV), and as such, the ATMP JV is a related party of the Company. The Company has no obligation to fund the ATMP JV. The Company accounts for its equity interests in the ATMP JV under the equity method of accounting due to its significant influence over the ATMP JV. The ATMP JV provides assembly, test, mark and packaging (ATMP) services to the Company. The Company assists the ATMP JV in its management of certain raw material inventory. The purchases from and resales to the ATMP JV of inventory under inventory management is reported within purchases and resales with the ATMP JV and does not impact the Company’s condensed consolidated statement of operations. The Company’s total purchases from the ATMP JV during the three and nine months ended September 28, 2019 amounted to $175 million and $479 million , respectively. The Company’s total purchases from the ATMP JV during the three and nine months ended September 29, 2018 amounted to $151 million and $429 million , respectively. As of September 28, 2019 and December 29, 2018 , the amount payable to the ATMP JV was $215 million and $207 million , respectively, included in Payables to related parties on the Company’s condensed consolidated balance sheets. The Company’s resales back to the ATMP JV during the three and nine months ended September 28, 2019 amounted to $4 million and $47 million , respectively. The Company’s resales back to the ATMP JV during the three and nine months ended September 29, 2018 amounted to $21 million and $40 million , respectively. As of September 28, 2019 and December 29, 2018 , the Company had receivables from ATMP JV of $4 million and $16 million , respectively, included in Prepayments and receivables-related parties on the Company’s condensed consolidated balance sheets. For the three and nine months ended September 28, 2019 , the Company recorded income of $1 million and $0 million , respectively, in Equity income (loss) in investee on its condensed consolidated statements of operations, which included certain expenses incurred by the Company on behalf of the ATMP JV. For the three and nine months ended September 29, 2018 , the Company recorded a loss of $0 million and $2 million , respectively, in Equity income (loss) in investee on its condensed consolidated statements of operations, which included certain expenses incurred by the Company on behalf of the ATMP JV. As of September 28, 2019 and December 29, 2018 , the carrying value of the Company’s investment in the ATMP JV was $59 million and $58 million , respectively. THATIC Joint Ventures In February 2016, the Company and Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity (JV Partner), formed a joint venture comprised of two separate legal entities, China JV1 and China JV2 (collectively, the THATIC JV). The Company’s equity share in China JV1 and China JV2 is a majority and minority interest, respectively, funded by the Company’s contribution of certain of its patents. The JV Partner is responsible for the initial and on-going financing of the THATIC JV’s operations. The Company has no obligations to fund the THATIC JV. The Company does not consolidate either of these entities and accounts for its investments in the THATIC JV under the equity method of accounting. The THATIC JV is a related party of the Company. The Company’s share in the net losses of the THATIC JV for the three and nine months ended September 28, 2019 is not recorded in the Company’s condensed consolidated statements of operations since the Company is not obligated to fund the THATIC JV’s losses in excess of the Company’s investment in the THATIC JV, which was zero as of September 28, 2019 . As of September 28, 2019 and December 29, 2018 , the total assets and liabilities of the THATIC JV were not material. In February 2016, the Company licensed certain of its intellectual property (Licensed IP) to the THATIC JV for a total of $293 million in license fees payable over several years upon achievement of certain milestones. The Company also expects to receive a royalty based on the sales of the THATIC JV’s products to be developed on the basis of such Licensed IP. The Company classifies Licensed IP income and royalty income, associated with the February 2016 agreement, as licensing gain within operating income. The Company recognized $60 million as licensing gain associated with the Licensed IP during the nine months ended September 28, 2019 . In March 2017, the Company entered into a development and intellectual property agreement (Development and IP) with the THATIC JV, and also expects to receive a royalty based on the sales of the THATIC JV’s products to be developed on the basis of such agreement. The Company classifies Development and IP income and royalty income, associated with the March 2017 agreement, as revenue once earned. In addition, from time to time, the Company enters into certain agreements with the THATIC JV to provide other services primarily related to research and development. The Company’s receivable from the THATIC JV for the above agreements was $13 million and $18 million as of September 28, 2019 and December 29, 2018 , respectively, included in Prepayments and receivables-related parties on its condensed consolidated balance sheets. In June 2019, the U.S. Commerce Department’s Bureau of Industry and Security added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation. |
GLOBALFOUNDRIES
GLOBALFOUNDRIES | 9 Months Ended |
Sep. 28, 2019 | |
Related Party Transactions [Abstract] | |
GLOBALFOUNDRIES | GLOBALFOUNDRIES In March 2009, the Company and GLOBALFOUNDRIES Inc. (GF) entered into a Wafer Supply Agreement (the WSA) under which the Company would purchase wafers from GF. The WSA, which has been amended from time to time, governs the terms by which the Company purchases products manufactured by GF through March 1, 2024. Pursuant to the WSA and its amendments, the Company is required to purchase all of its microprocessor and APU product requirements, and a certain portion of its GPU product requirements from GF manufactured at process nodes larger than 7 nanometer (nm), with limited exceptions. Under the terms of the WSA, the Company has minimum annual wafer purchase targets through 2021. If the Company fails to meet the agreed wafer purchase target during a calendar year, it will be required to pay to GF a portion of the difference between the actual wafer purchases and the applicable annual purchase target. The Company also agreed to continue to make quarterly payments to GF based on the volume of certain wafers purchased from another wafer foundry. On August 30, 2016, in consideration for the limited waiver and rights under the WSA Sixth Amendment, the Company entered into a warrant agreement (the Warrant Agreement) with West Coast Hitech L.P. (WCH), a wholly-owned subsidiary of Mubadala Development Company PJSC (Mubadala). Under the Warrant Agreement, WCH and its permitted assigns were entitled to purchase 75 million shares of the Company’s common stock (the Warrant Shares) at a purchase price of $5.98 per share. On February 13, 2019, WCH exercised its warrant to purchase 75 million shares of the Company’s common stock at a purchase price of $5.98 per share for a total amount of $449 million . Through May 15, 2019, GF was a related party of the Company because Mubadala and Mubadala Technology Investments LLC (Mubadala Tech, a party to the WSA) were affiliated with WCH, and a member of the Company's Board of Directors (the Board) was associated with Mubadala. GF, WCH and Mubadala Tech are wholly-owned subsidiaries of Mubadala. Effective May 15, 2019, the member of the Board associated with Mubadala retired from the Board, and as a result, GF was no longer considered a related party of the Company. All prior period related party classifications on the financial statements for GF have been reclassified to conform to the current period presentation. |
Debt, Secured Revolving Facilit
Debt, Secured Revolving Facility and Secured Revolving Line of Credit | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt, Secured Revolving Facility and Secured Revolving Line of Credit | Debt, Secured Revolving Facility and Secured Revolving Line of Credit Debt 2.125% Convertible Senior Notes Due 2026 In September 2016, the Company issued $805 million principal amount of 2.125% Convertible Senior Notes due 2026 ( 2.125% Notes). The 2.125% Notes mature on September 1, 2026. However, holders of the 2.125% Notes may convert them at their option during certain time periods and upon the occurrence of one of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2016 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (equivalent to an initial conversion price of approximately $8.00 per share of common stock); (2) during the five business day period after any ten consecutive trading day period (the Measurement Period) in which the trading price per $1,000 principal amount of notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after June 1, 2026 until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The first event described in (1) above was met during the third quarter of 2019 and as a result, the 2.125% Notes are convertible at the option of the holder from October 1, 2019 until December 31, 2019. During the three and nine months ended September 28, 2019 , the Company converted $126 million principal amount of its 2.125% Notes through the issuance of approximately 16 million shares of the Company's common stock at the conversion price of $8.00 per share and an aggregate cash payment of $14 million . As of September 28, 2019, the Company had $679 million principal of its 2.125% Notes outstanding. The Company’s current intent is to deliver shares of its common stock upon conversion of the 2.125% Notes. As such, the Company continued to classify the carrying value of the liability component of the 2.125% Notes as long-term debt and the equity component of the 2.125% Notes as permanent equity on its condensed consolidated balance sheet as of September 28, 2019 . The 2.125% Notes consisted of the following: September 28, December 29, (In millions) Principal amounts: Principal $ 679 $ 805 Unamortized debt discount (1) (205 ) (262 ) Unamortized debt issuance costs (8 ) (11 ) Net carrying amount $ 466 $ 532 Carrying amount of the equity component, net (2) $ 258 $ 305 (1) Included in the consolidated balance sheets within Long-term debt, net and amortized over the remaining life of the notes using the effective interest rate method. (2) Included in the consolidated balance sheets within additional paid-in capital, net of $8 million of equity issuance costs. As of September 28, 2019 , the remaining life of the 2.125% Notes was approximately 84 months . Based on the closing price of the Company’s common stock of $28.72 on September 27, 2019, the last trading day of the three months ended September 28, 2019 , the if-converted value of the 2.125% Notes exceeded its principal amount by $1,759 million . The effective interest rate of the liability component of the 2.125% Notes is 8% . This interest rate was based on the interest rates of similar liabilities at the time of issuance that did not have associated conversion features. The following table sets forth total interest expense recognized related to the 2.125% Notes: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Contractual interest expense $ 4 $ 5 $ 12 $ 13 Interest cost related to amortization of debt issuance costs $ — $ — $ 1 $ 1 Interest cost related to amortization of the debt discount $ 6 $ 6 $ 18 $ 18 6.75% Senior Notes Due 2019 On February 26, 2014, the Company issued $600 million of its 6.75% Senior Notes due March 1, 2019 ( 6.75% Notes). During the first three months of 2019, the Company redeemed the remaining $66 million in aggregate principal amount of its 6.75% Notes with a combination of cash and treasury stock. 7.50% Senior Notes Due 2022 On August 15, 2012, the Company issued $500 million of its 7.50% Senior Notes due 2022 ( 7.50% Notes). During the nine months ended September 28, 2019 , the Company repurchased $25 million in aggregate principal amount of its 7.50% Notes in cash. As of September 28, 2019 , the outstanding aggregate principal amount of the 7.50% Notes was $312 million . 7.00% Senior Notes Due 2024 On June 16, 2014, the Company issued $500 million of its 7.00% Senior Notes due 2024 ( 7.00% Notes). During the three and nine months ended September 28, 2019 , the Company repurchased $80 million and $154 million , respectively, in aggregate principal amount of its 7.00% Notes with a combination of cash and treasury stock. As of September 28, 2019 , the outstanding aggregate principal amount of the 7.00% Notes was $96 million . Potential Repurchase of Outstanding Notes The Company may elect to purchase or otherwise retire the 7.50% Notes and 7.00% Notes with cash or treasury stock and the 2.125% Notes with stock from time to time in the open market or through privately negotiated transactions, either directly or through intermediaries, or by tender offer when the Company believes the market conditions are favorable. Debt Redemption, Repurchase and Conversion In aggregate, for the three and nine months ended September 28, 2019 , the Company recorded a loss on extinguishment of debt of $40 million and $48 million , respectively, associated with the various debt redemptions, repurchases and conversions noted above. Secured Revolving Facility On June 7, 2019, the Company entered into a secured revolving credit facility for up to $500 million (the Secured Revolving Facility) pursuant to a credit agreement by and among the Company, as borrower, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (the Credit Agreement). The Secured Revolving Facility consists of a $500 million , five-year secured revolving loan facility, including a $50 million swingline subfacility and a $75 million sublimit for letters of credit. The Company’s obligations under the Credit Agreement are secured by a lien on substantially all of the Company’s property, other than intellectual property. The Credit Agreement also provides the ability to increase the Secured Revolving Facility or incur incremental term loans or other incremental equivalent debt by an amount not to exceed certain amounts as set forth in the Credit Agreement. The Company's available borrowings under the Secured Revolving Facility are also subject to reduction by an amount equal to the net cash proceeds of (i) any debt issuances not permitted by the Secured Revolving Facility and (ii) any non-ordinary course asset sales, in excess of $250 million , if such net cash proceeds are not reinvested by the Company within twelve months of receipt. Borrowings under the Secured Revolving Facility bear interest at a variable rate based upon, at the Company’s option, either at the LIBOR rate, or the base rate (in each case, as customarily defined) plus an applicable margin. The applicable margin for LIBOR rate loans ranges, based on an applicable total leverage ratio, from 1.00% to 1.75% per annum and the applicable margin for base rate loans ranges from 0.00% to 0.75% per annum. The Company is required to pay fees on the undrawn portion available under the Secured Revolving Facility and in respect of outstanding letters of credit. The Credit Agreement contains customary affirmative and negative covenants, as well as a total leverage covenant requiring the Company to maintain a maximum ratio of consolidated funded debt to consolidated EBITDA of 4.00 :1.00 and an interest coverage covenant requiring the Company to maintain a minimum ratio of consolidated EBITDA to consolidated cash interest expense of 3.00 :1.00. The Credit Agreement also contains customary events of default, which if they occur, could result in the termination of commitments under the Secured Revolving Facility, the declaration that all outstanding loans are immediately due and payable in whole or in part and the requirement to maintain cash collateral deposits in respect of outstanding letters of credit. As of September 28, 2019 , there were no borrowings outstanding under the Credit Agreement, and the Company was in compliance with all required covenants under the Credit Agreement. As of September 28, 2019 , the Company had $14 million of letters of credit outstanding under the Credit Agreement. Secured Revolving Line of Credit On June 7, 2019, in connection with entering into the Credit Agreement as described above, the Company repaid its outstanding loan balance of $70 million under the secured revolving line of credit (Secured Revolving Line of Credit) and terminated the Amended and Restated Loan and Security Agreement dated as of April 14, 2015, as amended (the Agreement) among the Company, a group of lenders, and Bank of America, N.A., acting as agent for the lenders. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 28, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments Cash, Cash Equivalents, and Marketable Securities Cash and financial instruments measured and recorded at fair value as of September 28, 2019 and December 29, 2018 are summarized below: Total Fair Cash and Short-Term Marketable Securities (In millions) September 28, 2019 Cash $ 1,155 $ 1,155 $ — Level 1 (1) Government money market funds $ 1 $ 1 $ — Total level 1 $ 1 $ 1 $ — Level 2 (2) Commercial paper $ 53 $ — $ 53 Total level 2 $ 53 $ — $ 53 Total $ 1,209 $ 1,156 $ 53 Total Fair Cash and Short-Term Marketable Securities (In millions) December 29, 2018 Cash $ 315 $ 315 $ — Level 1 (1) Government money market funds $ 275 $ 275 $ — Total level 1 $ 275 $ 275 $ — Level 2 (2) Commercial paper $ 566 $ 488 $ 78 Total level 2 $ 566 $ 488 $ 78 Total $ 1,156 $ 1,078 $ 78 (1) The Company ’ s Level 1 assets are valued using quoted prices for identical instruments in active markets. (2) The Company’s Level 2 assets are valued using broker reports that utilize quoted prices for identical instruments in markets that are not active or comparable instruments in active markets. Brokers gather observable inputs for all of the Company’s fixed income securities from a variety of industry data providers and other third-party sources. In addition to the amounts presented above, as of both September 28, 2019 and December 29, 2018 , the Company had $5 million of investments in government money market funds, used as collateral for letters of credit deposits, which were included in Other current assets on the Company’s condensed consolidated balance sheets. As of September 28, 2019 and December 29, 2018 , the Company also had $28 million and $21 million , respectively, of investments in mutual funds held in a Rabbi trust established for the Company’s deferred compensation plan, which were included in Other assets on the Company’s condensed consolidated balance sheets. These government money market funds and mutual funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized cost approximates the fair value for all periods presented. The Company is restricted from accessing these investments. Financial Instruments Not Recorded at Fair Value on a Recurring Basis The Company carries its financial instruments at fair value with the exception of its debt. Financial instruments that are not recorded at fair value are measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values of financial instruments not recorded at fair value are as follows: September 28, 2019 December 29, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (In millions) Short-term debt, net $ — $ — $ 136 $ 136 Long-term debt, net (1) $ 872 $ 2,977 $ 1,114 $ 2,428 (1) Carrying amounts of long-term debt are net of unamortized debt issuance costs of $11 million as of September 28, 2019 and $16 million as of December 29, 2018 , and net of unamortized debt discount associated with the 2.125% Notes of $205 million as of September 28, 2019 and $262 million as of December 29, 2018 . The Company’s long-term debt is classified within Level 2. The fair value of the debt was estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The Company’s 2.125% Notes, included in Long-term debt, net above, were convertible at the option of the holder as of September 28, 2019. The estimated fair value of the 2.125% Notes take into account the value between the Company’s stock price as of the end of the quarter and the equivalent initial conversion price of approximately $8.00 per share of common stock. The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing payment terms. Hedging Transactions and Derivative Financial Instruments Cash Flow Hedges and Foreign Currency Forward Contracts not Designated as Accounting Hedges The following table shows the impact of losses resulting from cash flow hedges and foreign currency forward contracts not designated as accounting hedges on the respective condensed consolidated statement of operations line items: Three Months Ended September 28, September 29, Research and development Marketing, general and administrative Other income (expense), net Research and development Marketing, general and administrative Other income (expense), net (In millions) Amounts presented in the condensed consolidated statements of operations in which the effects of cash flow hedges were recorded $ 406 $ 185 $ (36 ) $ 363 $ 148 $ (6 ) Foreign Currency Forward Contracts - losses Contracts designated as cash flow hedging instruments Losses reclassified from OCI into income (1 ) (1 ) — (4 ) (1 ) — Contracts not designated as hedging instruments Losses recognized in income — — (1 ) — — — Total losses $ (1 ) $ (1 ) $ (1 ) $ (4 ) $ (1 ) $ — Nine Months Ended September 28, September 29, Research and development Marketing, general and administrative Other income (expense), net Research and development Marketing, general and administrative Other income (expense), net (In millions) Amounts presented in the condensed consolidated statements of operations in which the effects of cash flow hedges were recorded $ 1,152 $ 544 $ (40 ) $ 1,063 $ 424 $ (4 ) Foreign Currency Forward Contracts - losses Contracts designated as cash flow hedging instruments Losses reclassified from OCI into income (5 ) (1 ) — — — — Contracts not designated as hedging instruments Losses recognized in income — — (2 ) — — (2 ) Total losses $ (5 ) $ (1 ) $ (2 ) $ — $ — $ (2 ) For foreign currency contracts designated as cash flow hedges, the amounts excluded from the assessment of hedge effectiveness were immaterial. The Company’s foreign currency derivative contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. The following table shows the fair value amounts of the Company's foreign currency derivative contracts depending on whether the foreign currency forward contracts are in a gain or loss position. These amounts were recorded in the Company’s condensed consolidated balance sheets in either Other current assets or Other current liabilities. September 28, December 29, (In millions) Foreign Currency Forward Contracts - gains (losses) Contracts designated as cash flow hedging instruments - gains $ 1 $ 1 Contracts designated as cash flow hedging instruments - losses $ (7 ) $ (8 ) As of September 28, 2019 and December 29, 2018 , the notional values of the Company’s outstanding foreign currency forward contracts were $573 million and $396 million , respectively. All the contracts mature within 12 months, and, upon maturity, the amounts recorded in Accumulated other comprehensive income (loss) are expected to be reclassified into earnings. The Company hedges its exposure to the variability in future cash flows for forecasted transactions over a maximum of 12 months. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The tables below summarize the changes in accumulated other comprehensive income (loss) by component: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Beginning balance $ — $ (10 ) (8 ) 6 Unrealized losses on cash flow hedges (9 ) (5 ) (5 ) (16 ) Losses reclassified into income 2 5 6 — Total other comprehensive income (loss) (7 ) — 1 (16 ) Ending balance $ (7 ) $ (10 ) (7 ) (10 ) |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus potentially dilutive shares outstanding during the period. Potentially dilutive shares are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding Restricted Stock Units (RSUs), the assumed issuance of common shares under the stock purchase plan, and the assumed exercise of the warrant under the Warrant Agreement with WCH prior to the exercise of the warrant on February 13, 2019. Potentially dilutive shares issuable upon conversion of the 2.125% Notes are calculated using the if-converted method. The following table sets forth the components of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions, except per share amounts) Numerator Net income $ 120 $ 102 $ 171 $ 299 Denominator Basic weighted-average shares 1,097 987 1,075 976 Effect of potentially dilutive shares: Employee equity incentive plans and warrants 20 89 32 82 Diluted weighted-average shares 1,117 1,076 1,107 1,058 Earnings per share: Basic $ 0.11 $ 0.10 $ 0.16 $ 0.31 Diluted $ 0.11 $ 0.09 $ 0.15 $ 0.28 Potential shares from employee equity incentive plans and the conversion of the 2.125% Notes totaling 101 million for the three months ended September 28, 2019 were not included in the earnings per share calculation because their inclusion would have been anti-dilutive. Potential shares from employee equity incentive plans and the conversion of the 2.125% Notes totaling 103 million for the three months ended September 29, 2018 were not included in the earnings per share calculation because their inclusion would have been anti-dilutive. Potential shares from employee equity incentive plans and the conversion of the 2.125% Notes totaling 102 million for the nine months ended September 28, 2019 were not included in the earnings per share calculation because their inclusion would have been anti-dilutive. Potential shares from employee equity incentive plans and the conversion of the 2.125% Notes totaling 104 million for the nine months ended September 29, 2018 were not included in the earnings per share calculation because their inclusion would have been anti-dilutive. |
Stock-Based Incentive Compensat
Stock-Based Incentive Compensation Plans | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Compensation Plans | Stock-Based Incentive Compensation Plans Stock Options During the three and nine months ended September 28, 2019 , the Company granted 0.6 million and 0.7 million shares of employee stock options, respectively, with weighted average grant date fair values per share of $13.74 and $13.31 , respectively. During the three and nine months ended September 29, 2018 , the Company granted 1.0 million and 1.1 million shares of employee stock options, respectively, with weighted average grant date fair values per share of $8.08 and $7.62 , respectively. Restricted Stock Units (RSUs) During the three and nine months ended September 28, 2019 , the Company granted 5.8 million and 7.2 million shares of RSUs, respectively, with weighted average grant date fair values per share of $34.02 and $32.34 , respectively. During the three and nine months ended September 29, 2018 , the Company granted 8.0 million and 11.0 million shares of RSUs, respectively, with weighted average grant date fair values per share of $19.39 and $17.47 , respectively. Performance-based Restricted Stock Units with Market Conditions From time to time, the Company grants performance-based RSUs to its senior executives. The number of shares earned are dependent upon achievement of either market conditions, or performance and market conditions and are subject to requisite service conditions. During the three and nine months ended September 28, 2019 , the Company granted 1.5 million and 1.6 million shares of market-based RSUs, respectively, with weighted average grant date fair values per share of $50.83 and $50.00 , respectively. During the three and nine months ended September 29, 2018 , the Company granted 0.8 million and 1.0 million shares of market-based RSUs, respectively, with weighted average grant date fair values per share of $23.97 and $21.67 , respectively. Employee Stock Purchase Plan (ESPP) During the nine months ended September 28, 2019 and September 29, 2018 , 1.8 million and 2.2 million shares of common stock were purchased under the ESPP at a purchase price of $16.18 and $9.57 , respectively, resulting in cash proceeds of $29 million and $21 million , respectively. The fair values of stock purchase rights granted under the ESPP during the nine months ended September 28, 2019 and September 29, 2018 were $9.52 and $3.42 per share, respectively. For the three and nine months ended September 28, 2019 , the Company recorded stock-based compensation expense under employee equity incentive plans of $54 million and $140 million , respectively. For the three and nine months ended September 29, 2018 , the Company recorded stock-based compensation expense under employee equity incentive plans of $36 million and $101 million , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended September 28, 2019 , the Company recorded an income tax provision of $7 million , consisting primarily of $4 million of withholding taxes and $3 million of foreign income taxes in profitable locations. For the three months ended September 29, 2018 , the Company recorded an income tax provision of $12 million , consisting of $7 million for withholding taxes and $5 million for U.S. income taxes. For the nine months ended September 28, 2019 , the Company recorded an income tax benefit of $4 million , consisting primarily of a $13 million tax benefit as a result of the completion of an internal tax structuring, partially offset by $5 million of withholding taxes and $4 million of foreign income taxes in profitable locations. For the nine months ended September 29, 2018 , the Company recorded an income tax provision of $26 million , consisting of $15 million for U.S. taxes, $7 million for withholding taxes and $4 million of foreign income taxes in profitable locations. As of September 28, 2019 , substantially all of the Company’s U.S. and Canadian deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, as of September 28, 2019 , in management’s estimate, is not more likely than not to be achieved. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Management, including the Chief Operating Decision Maker, who is the Company’s Chief Executive Officer, reviews and assesses operating performance using segment net revenue and operating income before interest, other income (expense), net and income taxes. These performance measures include the allocation of expenses to the operating segments based on management’s judgment. The Company has the following two reportable segments: • the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), datacenter and professional GPUs, and development services. The Company also licenses portions of its IP portfolio; and • the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services, and technology for game consoles. The Company also licenses portions of its IP portfolio. In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. This category also includes employee stock-based compensation expense. The following table provides a summary of net revenue and operating income by segment: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Net revenue: Computing and Graphics $ 1,276 $ 938 $ 3,047 $ 3,139 Enterprise, Embedded and Semi-Custom 525 715 1,557 1,917 Total net revenue $ 1,801 $ 1,653 $ 4,604 $ 5,056 Operating income (loss): Computing and Graphics $ 179 $ 100 $ 217 $ 355 Enterprise, Embedded and Semi-Custom 61 86 218 169 All Other (1) (54 ) (36 ) (152 ) (101 ) Total operating income $ 186 $ 150 $ 283 $ 423 (1) For all periods presented, All Other operating loss was related to stock-based compensation expense except for All Other operating loss of $152 million for the nine months ended September 28, 2019 , which consisted of $140 million stock-based compensation expense and $12 million |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into operating and finance leases for its corporate offices, datacenters, research and development facilities and certain equipment. The leases expire at various dates through 2028, some of which include options to extend the lease for up to 5 years . For the three and nine months ended September 28, 2019 , the Company recorded $13 million and $39 million of operating lease expense, respectively. For the three and nine months ended September 28, 2019 , the Company recorded $6 million and $19 million of variable lease expense, respectively. For the three and nine months ended September 28, 2019 , cash paid for operating leases included in operating cash flows was $14 million and $36 million , respectively. The Company's finance leases and short-term leases are immaterial. September 28, 2019 Weighted-average remaining lease term – operating leases 6 years Weighted-average discount rate – operating leases 6.11 % Future minimum lease payments under non-cancellable operating lease liabilities are as follows: September 28, 2019 (In millions) 2019 (3 months remaining) $ 13 2020 51 2021 46 2022 42 2023 37 Thereafter 103 Total minimum lease payments $ 292 Less: interest (53 ) Present value of net minimum lease payments 239 Less: current portion (38 ) Total $ 201 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Zeng Shareholder Derivative Lawsuit On March 8, 2018, a purported shareholder derivative lawsuit captioned Zeng v. Su, et al., Case No. 18CIV01192 was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the San Mateo County Superior Court of the State of California. The complaint purports to assert claims against the Company and certain individual directors and officers for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual directors and officers regarding Spectre, which statements and omissions, the plaintiffs claim, allegedly operated to artificially inflate the price paid for AMD's common stock during the period. On April 26, 2018, the lawsuit was transferred to Santa Clara County and assigned a new case number, 18CV327692. On August 14, 2018, the Court stayed this lawsuit pending a decision on the motion to dismiss in Kim et al. v. AMD, et al., Case No. 3:18-cv-00321 filed against the Company in the United States District Court for the Northern District of California (“Securities Class Action”). As discussed above, on May 23, 2019, the court in the Securities Class Action granted a motion to dismiss filed by the Company and certain individual officers and thereafter entered final judgment dismissing the Securities Class Action with prejudice. On June 17, 2019, the court in this case entered a joint stipulation to extend the stay until October 7, 2019. On September 5, 2019, the court granted the parties' joint stipulation of dismissal. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. In re Advanced Micro Devices, Inc. Shareholder Derivative Litigation Two purported shareholder derivative lawsuits were filed against the Company (as a nominal defendant only) and certain of its directors and officers in the United States District Court, Northern District of California: (1) Jacqueline Dolby, derivatively on behalf of AMD, Inc. v. Su et al., Case No. 5:18-cv-03575, filed on June 14, 2018; and (2) Gusinsky Trust, derivatively on behalf of AMD, Inc. v. Su et al., Case No. 5:18-cv-03811, filed on June 26, 2018. The complaints purport to assert claims against the Company and certain individual directors and officers for violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9, breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The complaints seek damages purportedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual directors and officers regarding Spectre. The plaintiffs allege that these statements and omissions operated to artificially inflate the price paid for AMD's common stock during the period. On July 12, 2018, the court consolidated the Dolby and Gusinsky Trust shareholder derivative lawsuits under the caption In re Advanced Micro Devices, Inc. Shareholder Derivative Litigation. On August 10, 2018, the Court stayed this lawsuit pending a decision on the motion to dismiss in Kim et al. v. AMD, et al., Case No. 3:18-cv-00321 filed against the Company in the United States District Court for the Northern District of California (Class Action). As discussed above, on May 23, 2019, the court in the Class Action granted a motion to dismiss filed by the Company and certain individual officers and thereafter entered final judgment dismissing the Class Action with prejudice. On June 12, 2019, the court in this case entered a joint stipulation to extend the stay until October 7, 2019. On August 1, 2019, the court granted the parties' voluntary dismissal. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. MediaTek Litigation MediaTek, Inc. v. Advanced Micro Devices , Inc., No. 19-cv-368 in the United States District Court for the District of Delaware. On February 21, 2019, MediaTek, Inc. filed suit against the Company, alleging infringement of six patents related to memory controllers and integrated circuit structures. On April 15, 2019, the Company filed a motion to dismiss portions of MediaTek’s complaint. On April 29, 2019, MediaTek filed an amended complaint. On May 13, 2019, AMD filed a motion to dismiss part of MediaTek's amended complaint. Subsequently, the parties agreed to dismiss the lawsuit and the Court granted the parties' request on September 24, 2019. On March 18, 2019, AMD Products (China) Co., Ltd. was provided with four complaints filed by MediaTek in the Intermediate People’s Court of Shenzhen, China. Each complaint alleges infringement of one patent by certain AMD entities, identifies an exemplary product, and seeks injunctive and monetary relief. AMD subsequently initiated invalidity proceedings regarding each of the patents-in-suit. The parties are now in the process of mutually dismissing each of the infringement and invalidity proceedings as well. Based upon information presently known to management, the Company believes that the resolution of these matters will not have a material adverse effect on its financial condition, cash flows or results of operations. Dickey Litigation On October 26, 2015, a putative class action complaint captioned Dickey et al. v. AMD, No. 15-cv-04922 was filed against the Company in the United States District Court for the Northern District of California. Plaintiffs allege that the Company misled consumers by using the term “eight cores” in connection with the marketing of certain AMD FX CPUs that are based on the Company's “Bulldozer” core architecture. The plaintiffs allege these products cannot perform eight calculations simultaneously, without restriction. The plaintiffs seek to obtain damages under several causes of action for a nationwide class of consumers who allegedly were deceived into purchasing certain Bulldozer-based CPUs that were marketed as containing eight cores. The plaintiffs also seek attorneys’ fees. On December 21, 2015, the Company filed a motion to dismiss the complaint, which was granted on April 7, 2016. The plaintiffs then filed an amended complaint with a narrowed putative class definition, which the Court dismissed upon the Company's motion on October 31, 2016. The plaintiffs subsequently filed a second amended complaint, and the Company filed a motion to dismiss the second amended complaint. On June 14, 2017, the Court issued an order granting in part and denying in part the Company's motion to dismiss, and allowing the plaintiffs to move forward with a portion of their complaint. On March 27, 2018, plaintiffs filed their motion for class certification. On January 17, 2019, the Court granted plaintiffs’ motion for class certification. The class definition does not encompass the Company's Ryzen TM or EPYC TM processors. On January 31, 2019, the Company filed a petition in the Ninth Circuit Court of Appeals seeking review of certain aspects of the January 17, 2019 class certification order. On May 9, 2019, the parties attended mediation and reached a tentative settlement. The tentative settlement is subject to a final executed agreement and court approval. On June 3, 2019, the Ninth Circuit Court of Appeals denied the Company’s petition seeking appellate review of the January 17, 2019 class certification order. On August 9, 2019, the parties executed a settlement agreement. On August 23, 2019, Plaintiffs filed their motion for preliminary approval of the settlement agreement. On October 4, 2019, the Court granted the motion for preliminary approval of the settlement agreement. Based upon information presently known to management, the Company believes that the settlement will not have a material adverse effect on its financial condition, cash flows or results of operations. Quarterhill Inc. Litigation On July 2, 2018, three entities named Aquila Innovations, Inc. (Aquila), Collabo Innovations, Inc. (Collabo), and Polaris Innovations, Ltd. (Polaris), filed separate patent infringement complaints against the Company in the United States District Court for the Western District of Texas. Aquila alleges that the Company infringes two patents (6,239,614 and 6,895,519) relating to power management; Collabo alleges that the Company infringes one patent (7,930,575) related to power management; and Polaris alleges that the Company infringes two patents (6,728,144 and 8,117,526) relating to control or use of dynamic random-access memory, or DRAM. Each of the three complaints seeks unspecified monetary damages, interest, fees, expenses, and costs against the Company; Aquila and Collabo also seek enhanced damages. Aquila, Collabo, and Polaris each appear to be related to a patent assertion entity named Quarterhill Inc. (formerly WiLAN Inc.). On November 16, 2018, AMD filed answers in the Collabo and Aquila cases and filed a motion to dismiss in the Polaris case. On January 25, 2019, the Company filed amended answers and counterclaims in the Collabo and Aquila cases. On July 22, 2019, the Company's motion to dismiss in the Polaris case was denied. On August 23, 2019, the Court held a claim construction hearing in each case. Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Other Legal Matters The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With respect to these matters, the Company believes that the amount or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial condition, cash flows or results of operations. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. and its subsidiaries (the Company or AMD) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three and nine months ended September 28, 2019 shown in this report are not necessarily indicative of results to be expected for the full year ending December 28, 2019 . In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and s tockholders' equity . All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Certain prior period amounts have been reclassified to conform to current period presentation. |
Fiscal Period | The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. The three and nine months ended September 28, 2019 and September 29, 2018 each consisted of 13 weeks and 39 weeks, respectively. |
Principles of Consolidation | Principles of Consolidation. The condensed consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Leases | Leases. The Company determines if an arrangement is a lease, or contains a lease, at the inception of the arrangement. When the Company determines the arrangement is a lease, or contains a lease, at lease inception, it then determines whether the lease is an operating lease or a finance lease. Operating and finance leases result in the Company recording a right-of-use (ROU) asset and lease liability on its balance sheet. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit interest rate if readily determinable or when the implicit interest rate is not readily determinable, the Company uses its incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes any lease incentives. Specific lease terms may include options to extend or terminate the lease when the Company believes it is reasonably certain that it will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. As allowed by the guidance, the Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, other current liabilities, and long-term operating lease liabilities in the Company's condensed consolidated balance sheet. The Company's finance leases are immaterial. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , to increase transparency and comparability among organizations for lease recognition and disclosure. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet, while recognizing expenses on the income statements in a manner similar to legacy guidance. The Company adopted this standard in the first quarter of 2019, using the optional adoption method, which did not require an adjustment to comparative period financial statements, and recorded $228 million of right-of-use assets and $261 million of lease liabilities primarily related to office buildings in its consolidated balance sheet as of December 30, 2018. The Company's accounting for capital leases, now referred to as finance leases, remains unchanged. The Company's adoption of the new standard had no impact on its consolidated statement of operations or on net cash provided by or used in operating, financing, or investing activities on its consolidated statement of cash flows. Upon adoption of ASU 2016-02, the Company elected a transition practical expedient under the new accounting standard allowing it not to separate lease and non-lease components and instead to account for each separate lease component and non-lease component as a single lease component. The Company implemented internal controls and key system functionality to enable the preparation of financial information on adoption. Recently Issued Accounting Standards Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . This standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, using a modified retrospective adoption method. The Company will adopt this standard in the first quarter of 2020 and this standard will not have a material impact on its consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its consolidated financial statements. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories, Net | Inventories, net September 28, December 29, (In millions) Raw materials $ 95 $ 134 Work in process 754 354 Finished goods 191 357 Total inventories, net $ 1,040 $ 845 |
Property and Equipment, Net | Property and Equipment, net September 28, December 29, (In millions) Leasehold improvements $ 207 $ 179 Equipment 945 798 Construction in progress 70 78 Property and equipment, gross 1,222 1,055 Accumulated depreciation (769 ) (707 ) Total property and equipment, net $ 453 $ 348 |
Other Assets | Other Assets September 28, December 29, (In millions) Software technology and licenses, net $ 220 $ 226 Other 115 95 Total other assets $ 335 $ 321 |
Accrued Liabilities | Accrued Liabilities September 28, December 29, (In millions) Accrued compensation and benefits $ 212 $ 236 Marketing programs and advertising expenses 327 275 Software technology and licenses payable 43 28 Other 255 244 Total accrued liabilities $ 837 $ 783 |
Other Current Liabilities | Other Current Liabilities September 28, December 29, (In millions) Unearned revenue $ 5 $ 11 Operating lease liabilities 38 — Other 6 13 Total other current liabilities $ 49 $ 24 |
Changes in Unearned Revenue | Changes in unearned revenue were as follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Beginning balance $ 1 $ 67 $ 11 $ 85 Unearned revenue 4 37 5 124 Revenue recognized during the period — (86 ) (11 ) (186 ) Other — (15 ) — (20 ) Ending balance $ 5 $ 3 $ 5 $ 3 |
Debt, Secured Revolving Facil_2
Debt, Secured Revolving Facility and Secured Revolving Line of Credit (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The following table sets forth total interest expense recognized related to the 2.125% Notes: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Contractual interest expense $ 4 $ 5 $ 12 $ 13 Interest cost related to amortization of debt issuance costs $ — $ — $ 1 $ 1 Interest cost related to amortization of the debt discount $ 6 $ 6 $ 18 $ 18 The 2.125% Notes consisted of the following: September 28, December 29, (In millions) Principal amounts: Principal $ 679 $ 805 Unamortized debt discount (1) (205 ) (262 ) Unamortized debt issuance costs (8 ) (11 ) Net carrying amount $ 466 $ 532 Carrying amount of the equity component, net (2) $ 258 $ 305 (1) Included in the consolidated balance sheets within Long-term debt, net and amortized over the remaining life of the notes using the effective interest rate method. (2) Included in the consolidated balance sheets within additional paid-in capital, net of $8 million of equity issuance costs. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents, and Marketable Securities | Cash and financial instruments measured and recorded at fair value as of September 28, 2019 and December 29, 2018 are summarized below: Total Fair Cash and Short-Term Marketable Securities (In millions) September 28, 2019 Cash $ 1,155 $ 1,155 $ — Level 1 (1) Government money market funds $ 1 $ 1 $ — Total level 1 $ 1 $ 1 $ — Level 2 (2) Commercial paper $ 53 $ — $ 53 Total level 2 $ 53 $ — $ 53 Total $ 1,209 $ 1,156 $ 53 Total Fair Cash and Short-Term Marketable Securities (In millions) December 29, 2018 Cash $ 315 $ 315 $ — Level 1 (1) Government money market funds $ 275 $ 275 $ — Total level 1 $ 275 $ 275 $ — Level 2 (2) Commercial paper $ 566 $ 488 $ 78 Total level 2 $ 566 $ 488 $ 78 Total $ 1,156 $ 1,078 $ 78 (1) The Company ’ s Level 1 assets are valued using quoted prices for identical instruments in active markets. (2) The Company’s Level 2 assets are valued using broker reports that utilize quoted prices for identical instruments in markets that are not active or comparable instruments in active markets. Brokers gather observable inputs for all of the Company’s fixed income securities from a variety of industry data providers and other third-party sources. |
Financial Instruments Not Recorded at Fair Value on a Recurring Basis | The carrying amounts and estimated fair values of financial instruments not recorded at fair value are as follows: September 28, 2019 December 29, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (In millions) Short-term debt, net $ — $ — $ 136 $ 136 Long-term debt, net (1) $ 872 $ 2,977 $ 1,114 $ 2,428 (1) Carrying amounts of long-term debt are net of unamortized debt issuance costs of $11 million as of September 28, 2019 and $16 million as of December 29, 2018 , and net of unamortized debt discount associated with the 2.125% Notes of $205 million as of September 28, 2019 and $262 million as of December 29, 2018 . |
Schedule of Derivative Instruments, Gains (Losses) in Statement of Operations | The following table shows the impact of losses resulting from cash flow hedges and foreign currency forward contracts not designated as accounting hedges on the respective condensed consolidated statement of operations line items: Three Months Ended September 28, September 29, Research and development Marketing, general and administrative Other income (expense), net Research and development Marketing, general and administrative Other income (expense), net (In millions) Amounts presented in the condensed consolidated statements of operations in which the effects of cash flow hedges were recorded $ 406 $ 185 $ (36 ) $ 363 $ 148 $ (6 ) Foreign Currency Forward Contracts - losses Contracts designated as cash flow hedging instruments Losses reclassified from OCI into income (1 ) (1 ) — (4 ) (1 ) — Contracts not designated as hedging instruments Losses recognized in income — — (1 ) — — — Total losses $ (1 ) $ (1 ) $ (1 ) $ (4 ) $ (1 ) $ — Nine Months Ended September 28, September 29, Research and development Marketing, general and administrative Other income (expense), net Research and development Marketing, general and administrative Other income (expense), net (In millions) Amounts presented in the condensed consolidated statements of operations in which the effects of cash flow hedges were recorded $ 1,152 $ 544 $ (40 ) $ 1,063 $ 424 $ (4 ) Foreign Currency Forward Contracts - losses Contracts designated as cash flow hedging instruments Losses reclassified from OCI into income (5 ) (1 ) — — — — Contracts not designated as hedging instruments Losses recognized in income — — (2 ) — — (2 ) Total losses $ (5 ) $ (1 ) $ (2 ) $ — $ — $ (2 ) |
Schedule of Fair Value Amounts of Foreign Currency Forward Contracts in Balance Sheet | The following table shows the fair value amounts of the Company's foreign currency derivative contracts depending on whether the foreign currency forward contracts are in a gain or loss position. These amounts were recorded in the Company’s condensed consolidated balance sheets in either Other current assets or Other current liabilities. September 28, December 29, (In millions) Foreign Currency Forward Contracts - gains (losses) Contracts designated as cash flow hedging instruments - gains $ 1 $ 1 Contracts designated as cash flow hedging instruments - losses $ (7 ) $ (8 ) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The tables below summarize the changes in accumulated other comprehensive income (loss) by component: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Beginning balance $ — $ (10 ) (8 ) 6 Unrealized losses on cash flow hedges (9 ) (5 ) (5 ) (16 ) Losses reclassified into income 2 5 6 — Total other comprehensive income (loss) (7 ) — 1 (16 ) Ending balance $ (7 ) $ (10 ) (7 ) (10 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings (Loss) Per Share | The following table sets forth the components of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions, except per share amounts) Numerator Net income $ 120 $ 102 $ 171 $ 299 Denominator Basic weighted-average shares 1,097 987 1,075 976 Effect of potentially dilutive shares: Employee equity incentive plans and warrants 20 89 32 82 Diluted weighted-average shares 1,117 1,076 1,107 1,058 Earnings per share: Basic $ 0.11 $ 0.10 $ 0.16 $ 0.31 Diluted $ 0.11 $ 0.09 $ 0.15 $ 0.28 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Summary of Net Revenue and Operating Income (Loss) by Segment | The following table provides a summary of net revenue and operating income by segment: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, (In millions) Net revenue: Computing and Graphics $ 1,276 $ 938 $ 3,047 $ 3,139 Enterprise, Embedded and Semi-Custom 525 715 1,557 1,917 Total net revenue $ 1,801 $ 1,653 $ 4,604 $ 5,056 Operating income (loss): Computing and Graphics $ 179 $ 100 $ 217 $ 355 Enterprise, Embedded and Semi-Custom 61 86 218 169 All Other (1) (54 ) (36 ) (152 ) (101 ) Total operating income $ 186 $ 150 $ 283 $ 423 (1) For all periods presented, All Other operating loss was related to stock-based compensation expense except for All Other operating loss of $152 million for the nine months ended September 28, 2019 , which consisted of $140 million stock-based compensation expense and $12 million |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Schedule of Leases, Supplemental Cash Flows | The Company's finance leases and short-term leases are immaterial. September 28, 2019 Weighted-average remaining lease term – operating leases 6 years Weighted-average discount rate – operating leases 6.11 % |
Operating Lease, Liability, Maturity | Future minimum lease payments under non-cancellable operating lease liabilities are as follows: September 28, 2019 (In millions) 2019 (3 months remaining) $ 13 2020 51 2021 46 2022 42 2023 37 Thereafter 103 Total minimum lease payments $ 292 Less: interest (53 ) Present value of net minimum lease payments 239 Less: current portion (38 ) Total $ 201 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Mar. 30, 2019 | Dec. 29, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 205 | $ 0 | |
Operating lease liabilities | $ 239 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 228 | ||
Operating lease liabilities | $ 261 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Accounts Receivable, Net | |||||
Unbilled accounts receivables | $ 176 | $ 176 | $ 308 | ||
Inventories, Net | |||||
Raw materials | 95 | 95 | 134 | ||
Work in process | 754 | 754 | 354 | ||
Finished goods | 191 | 191 | 357 | ||
Total inventories, net | 1,040 | 1,040 | 845 | ||
Property and Equipment, Net | |||||
Leasehold improvements | 207 | 207 | 179 | ||
Equipment | 945 | 945 | 798 | ||
Construction in progress | 70 | 70 | 78 | ||
Property and equipment, gross | 1,222 | 1,222 | 1,055 | ||
Accumulated depreciation | (769) | (769) | (707) | ||
Total property and equipment, net | 453 | 453 | 348 | ||
Other Assets | |||||
Software technology and licenses, net | 220 | 220 | 226 | ||
Other | 115 | 115 | 95 | ||
Total other assets | 335 | 335 | 321 | ||
Accrued Liabilities | |||||
Accrued compensation and benefits | 212 | 212 | 236 | ||
Marketing programs and advertising expenses | 327 | 327 | 275 | ||
Software technology and licenses payable | 43 | 43 | 28 | ||
Other | 255 | 255 | 244 | ||
Total accrued liabilities | 837 | 837 | 783 | ||
Other Current Liabilities | |||||
Unearned revenue | 5 | 5 | 11 | ||
Operating lease liabilities | 38 | 38 | 0 | ||
Other | 6 | 6 | 13 | ||
Total other current liabilities | 49 | 49 | $ 24 | ||
Changes in Unearned Revenue | |||||
Beginning balance | 1 | $ 67 | 11 | $ 85 | |
Unearned revenue | 4 | 37 | 5 | 124 | |
Revenue recognized during the period | 0 | (86) | (11) | (186) | |
Other | 0 | (15) | 0 | (20) | |
Ending balance | $ 5 | $ 3 | $ 5 | $ 3 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Remaining Performance Obligations) (Details) $ in Millions | Sep. 28, 2019USD ($) |
Balance Sheet Related Disclosures [Abstract] | |
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 523 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-29 | |
Balance Sheet Related Disclosures [Abstract] | |
Revenue allocated to remaining performance obligations that are unsatisfied or partially unsatisfied | $ 220 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 12 months |
Equity Joint Ventures (Details)
Equity Joint Ventures (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 28, 2019USD ($)joint_venture | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)joint_venture | Sep. 29, 2018USD ($) | Dec. 29, 2018USD ($) | Feb. 29, 2016USD ($) | |
Investment [Line Items] | ||||||
Payables to related parties | $ 215 | $ 215 | $ 207 | |||
Receivables from related parties | 17 | 17 | 34 | |||
Equity income (loss) in investee | 1 | $ 0 | 0 | $ (2) | ||
Carrying value of investment | 59 | 59 | 58 | |||
Operating income | $ 0 | 0 | $ 60 | 0 | ||
ATMP JV | ||||||
Investment [Line Items] | ||||||
Number of joint ventures | joint_venture | 2 | 2 | ||||
Carrying value of investment | $ 59 | $ 59 | 58 | |||
ATMP JV | Joint Venture | ||||||
Investment [Line Items] | ||||||
Ownership percentage | 15.00% | 15.00% | ||||
Purchases from related party | $ 175 | 151 | $ 479 | 429 | ||
Payables to related parties | 215 | 215 | 207 | |||
Revenue from related parties | 4 | $ 21 | 47 | $ 40 | ||
Receivables from related parties | 4 | 4 | 16 | |||
THATIC JV | ||||||
Investment [Line Items] | ||||||
Receivables from related parties | $ 13 | $ 13 | $ 18 | |||
Number of legal entities | joint_venture | 2 | 2 | ||||
Licensing gain | THATIC JV | ||||||
Investment [Line Items] | ||||||
Estimated license fees expected to be earned over several years pursuant to a licensing agreement | $ 293 | |||||
Operating income | $ 60 |
GLOBALFOUNDRIES (Details)
GLOBALFOUNDRIES (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 13, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | Aug. 30, 2016 |
Related Party Transaction [Line Items] | ||||
Proceeds from warrant exercise by related party | $ 449 | $ 0 | ||
Related Party | WCH | WCH Warrant | ||||
Related Party Transaction [Line Items] | ||||
Number of securities called by warrants (in shares) | 75,000,000 | |||
Exercise price of warrants (in usd per share) | $ 5.98 | $ 5.98 | ||
Warrants exercised (in shares) | 75,000,000 | |||
Proceeds from warrant exercise by related party | $ 449 |
Debt, Secured Revolving Facil_3
Debt, Secured Revolving Facility and Secured Revolving Line of Credit (Narrative) (Details) $ / shares in Units, shares in Millions | Jun. 07, 2019USD ($) | Sep. 30, 2016USD ($)day | Sep. 28, 2019USD ($)$ / sharesshares | Jun. 29, 2019USD ($) | Sep. 28, 2019USD ($)$ / sharesshares | Sep. 29, 2018USD ($) | Sep. 27, 2019$ / shares | Dec. 29, 2018USD ($) | Jun. 16, 2014USD ($) | Feb. 26, 2014USD ($) | Aug. 15, 2012USD ($) |
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount repurchased | $ 261,000,000 | $ 15,000,000 | |||||||||
Loss on debt redemption, repurchase and conversion | $ 40,000,000 | $ 48,000,000 | $ 7,000,000 | ||||||||
2.125% Convertible Senior Notes due 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 2.125% | 2.125% | 2.125% | ||||||||
Principal amount | $ 805,000,000 | $ 679,000,000 | $ 679,000,000 | $ 805,000,000 | |||||||
Conversion price (in usd per share) | $ / shares | $ 8 | $ 8 | |||||||||
Repayments of debt | $ 14,000,000 | $ 15,000,000 | |||||||||
Convertible debt | $ 126,000,000 | ||||||||||
Conversion of stock, shares issued (in shares) | shares | 16 | 16 | |||||||||
Outstanding aggregate principal amount | $ 679,000,000 | $ 679,000,000 | |||||||||
Remaining life | 84 months | ||||||||||
Share price (in usd per share) | $ / shares | $ 28.72 | ||||||||||
If-converted value in excess of principal | $ 1,759,000,000 | ||||||||||
Effective interest rate | 8.00% | 8.00% | |||||||||
2.125% Convertible Senior Notes due 2026 | Debt Instrument, circumstance 1 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Threshold trading days | day | 20 | ||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||
Threshold percentage of conversion price | 130.00% | ||||||||||
2.125% Convertible Senior Notes due 2026 | Debt Instrument, circumstance 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Threshold consecutive trading days | day | 10 | ||||||||||
Threshold percentage of conversion price | 98.00% | ||||||||||
Conversion period after threshold period days | day | 5 | ||||||||||
6.75% Senior Notes due 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 6.75% | ||||||||||
Principal amount | $ 600,000,000 | ||||||||||
Aggregate principal amount repurchased | $ 66,000,000 | ||||||||||
7.50% Senior Notes due 2022 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 7.50% | 7.50% | 7.50% | ||||||||
Principal amount | $ 500,000,000 | ||||||||||
Outstanding aggregate principal amount | $ 312,000,000 | $ 312,000,000 | |||||||||
Aggregate principal amount settled | $ 25,000,000 | ||||||||||
7.00% Senior Notes due 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 7.00% | 7.00% | 7.00% | ||||||||
Principal amount | $ 500,000,000 | ||||||||||
Outstanding aggregate principal amount | $ 96,000,000 | $ 96,000,000 | |||||||||
Aggregate principal amount repurchased | 80,000,000 | $ 154,000,000 | |||||||||
Secured Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum EBITDA debt to EBITDA ratio | 4 | ||||||||||
Minimum EBITDA to cash interest expense ratio | 3 | ||||||||||
Letters of credit outstanding, amount | 14,000,000 | $ 14,000,000 | |||||||||
Repayments of lines of credit | $ 70,000,000 | ||||||||||
Secured Revolving Credit Facility | Secured Revolving Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||||||
Debt instrument, term | 5 years | ||||||||||
Amount of assets sales that must be reinvested within twelve month period | 250,000,000 | ||||||||||
Long-term line of credit | $ 0 | $ 0 | |||||||||
Secured Revolving Credit Facility | Swingline Subfacility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||||||
Secured Revolving Credit Facility | Letter of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||||||
Minimum | Secured Revolving Credit Facility | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.00% | ||||||||||
Minimum | Secured Revolving Credit Facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.00% | ||||||||||
Maximum | Secured Revolving Credit Facility | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.75% | ||||||||||
Maximum | Secured Revolving Credit Facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.75% |
Debt, Secured Revolving Facil_4
Debt, Secured Revolving Facility and Secured Revolving Line of Credit (Convertible Debt) (Details) - 2.125% Convertible Senior Notes due 2026 - USD ($) | Sep. 28, 2019 | Dec. 29, 2018 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||
Principal | $ 679,000,000 | $ 805,000,000 | $ 805,000,000 |
Unamortized debt discount | (205,000,000) | (262,000,000) | |
Unamortized debt issuance costs | (8,000,000) | (11,000,000) | |
Net carrying amount | 466,000,000 | 532,000,000 | |
Carrying amount of the equity component, net | 258,000,000 | 305,000,000 | |
Equity issuance costs | $ 8,000,000 | $ 9,000,000 |
Debt, Secured Revolving Facil_5
Debt, Secured Revolving Facility and Secured Revolving Line of Credit (Interest Expense Recognized) (Details) - 2.125% Convertible Senior Notes due 2026 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 4 | $ 5 | $ 12 | $ 13 |
Interest cost related to amortization of debt issuance costs | 0 | 0 | 1 | 1 |
Interest cost related to amortization of the debt discount | $ 6 | $ 6 | $ 18 | $ 18 |
Financial Instruments (Cash, Ca
Financial Instruments (Cash, Cash Equivalents, and Marketable Securities Fair Value Measurements) (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Schedule of Investments [Line Items] | ||
Total Fair Value | $ 1,209 | $ 1,156 |
Cash and Cash Equivalents | 1,156 | 1,078 |
Short-Term Marketable Securities | 53 | 78 |
Level 1 | ||
Schedule of Investments [Line Items] | ||
Total Fair Value | 1 | 275 |
Cash and Cash Equivalents | 1 | 275 |
Short-Term Marketable Securities | 0 | 0 |
Level 2 | ||
Schedule of Investments [Line Items] | ||
Total Fair Value | 53 | 566 |
Cash and Cash Equivalents | 0 | 488 |
Short-Term Marketable Securities | 53 | 78 |
Cash | ||
Schedule of Investments [Line Items] | ||
Total Fair Value | 1,155 | 315 |
Cash and Cash Equivalents | 1,155 | 315 |
Short-Term Marketable Securities | 0 | 0 |
Government money market funds | Level 1 | ||
Schedule of Investments [Line Items] | ||
Total Fair Value | 1 | 275 |
Cash and Cash Equivalents | 1 | 275 |
Short-Term Marketable Securities | 0 | 0 |
Commercial paper | Level 2 | ||
Schedule of Investments [Line Items] | ||
Total Fair Value | 53 | 566 |
Cash and Cash Equivalents | 0 | 488 |
Short-Term Marketable Securities | $ 53 | $ 78 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Foreign Currency Forward Contracts | ||
Schedule of Investments [Line Items] | ||
Contract maturity period | 12 months | |
Maximum length of time hedged in foreign currency cash flow hedges | 12 months | |
Cash Flow Hedging | Foreign Currency Forward Contracts | ||
Schedule of Investments [Line Items] | ||
Derivative, notional amount | $ 573 | $ 396 |
2.125% Convertible Senior Notes due 2026 | ||
Schedule of Investments [Line Items] | ||
Stated interest rate | 2.125% | |
Conversion price (in usd per share) | $ 8 | |
Level 1 | Government money market funds | ||
Schedule of Investments [Line Items] | ||
Investment in money market fund and bank guarantee | $ 5 | 5 |
Level 1 | Mutual funds | ||
Schedule of Investments [Line Items] | ||
Restricted investments | $ 28 | $ 21 |
Financial Instruments (Schedule
Financial Instruments (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments not Recorded at Fair Value) (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unamortized debt issuance costs | $ 11 | $ 16 |
2.125% Convertible Senior Notes due 2026 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stated interest rate | 2.125% | |
Unamortized debt discount | $ 205 | 262 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt, net | 0 | 136 |
Long-term debt, net | 872 | 1,114 |
Estimated Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term debt, net | 0 | 136 |
Long-term debt, net | $ 2,977 | $ 2,428 |
Financial Instruments (Gain (Lo
Financial Instruments (Gain (Loss) from Hedging Transactions) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Foreign Currency Forward Contracts - losses | ||||
Research and development | $ 406 | $ 363 | $ 1,152 | $ 1,063 |
Marketing, general and administrative | 185 | 148 | 544 | 424 |
Other expense, net | (36) | (6) | (40) | (4) |
Losses reclassified from OCI into income | (2) | (6) | ||
Losses reclassified from OCI into income | (5) | 0 | ||
Research and development | ||||
Foreign Currency Forward Contracts - losses | ||||
Total losses | (1) | (4) | (5) | 0 |
Marketing, general and administrative | ||||
Foreign Currency Forward Contracts - losses | ||||
Total losses | (1) | (1) | (1) | 0 |
Other income (expense), net | ||||
Foreign Currency Forward Contracts - losses | ||||
Total losses | (1) | 0 | (2) | (2) |
Foreign Currency Forward Contracts | Contracts designated as hedging instruments | Cash Flow Hedging | Research and development | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses reclassified from OCI into income | (1) | (5) | ||
Losses reclassified from OCI into income | (4) | 0 | ||
Foreign Currency Forward Contracts | Contracts designated as hedging instruments | Cash Flow Hedging | Marketing, general and administrative | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses reclassified from OCI into income | (1) | (1) | ||
Losses reclassified from OCI into income | (1) | 0 | ||
Foreign Currency Forward Contracts | Contracts designated as hedging instruments | Cash Flow Hedging | Other income (expense), net | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses reclassified from OCI into income | 0 | 0 | ||
Losses reclassified from OCI into income | 0 | 0 | ||
Foreign Currency Forward Contracts | Contracts not designated as hedging instruments | Research and development | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses recognized in income | 0 | 0 | 0 | 0 |
Foreign Currency Forward Contracts | Contracts not designated as hedging instruments | Marketing, general and administrative | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses recognized in income | 0 | 0 | 0 | 0 |
Foreign Currency Forward Contracts | Contracts not designated as hedging instruments | Other income (expense), net | ||||
Foreign Currency Forward Contracts - losses | ||||
Losses recognized in income | $ (1) | $ 0 | $ (2) | $ (2) |
Financial Instruments (Summary
Financial Instruments (Summary of Derivative Instruments) (Details) - Level 2 - Cash Flow Hedging - Foreign Currency Forward Contracts - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Foreign Currency Forward Contracts - gains (losses) | ||
Contracts designated as cash flow hedging instruments - gains | $ 1 | $ 1 |
Contracts designated as cash flow hedging instruments - losses | $ (7) | $ (8) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ 1,266 | |||
Ending balance | $ 2,176 | $ 1,125 | 2,176 | $ 1,125 |
AOCI Attributable to Parent | ||||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | 0 | (10) | (8) | 6 |
Total other comprehensive income (loss) | (7) | 1 | (16) | |
Ending balance | (7) | (10) | (7) | (10) |
Unrealized losses on cash flow hedges | ||||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Unrealized losses on cash flow hedges | (9) | (5) | ||
Losses reclassified into income | 2 | 6 | ||
Total other comprehensive income (loss) | $ (7) | $ 1 | ||
Losses reclassified into income | ||||
Changes in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Unrealized losses on cash flow hedges | (5) | (16) | ||
Losses reclassified into income | 5 | 0 | ||
Total other comprehensive income (loss) | $ 0 | $ (16) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Numerator | ||||
Net income | $ 120 | $ 102 | $ 171 | $ 299 |
Denominator | ||||
Basic weighted-average shares (in shares) | 1,097 | 987 | 1,075 | 976 |
Effect of potentially dilutive shares: | ||||
Employee equity incentive plans and warrants (in shares) | 20 | 89 | 32 | 82 |
Diluted weighted-average shares (in shares) | 1,117 | 1,076 | 1,107 | 1,058 |
Earnings per share: | ||||
Basic (in usd per share) | $ 0.11 | $ 0.10 | $ 0.16 | $ 0.31 |
Diluted (in usd per share) | $ 0.11 | $ 0.09 | $ 0.15 | $ 0.28 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Stock Options, Restricted Stock Units, Conversion of Notes, and Warrants Under Warrant Agreement | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares (in shares) | 101 | 103 | 102 | 104 |
2.125% Convertible Senior Notes due 2026 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stated interest rate | 2.125% | 2.125% |
Stock-Based Incentive Compens_2
Stock-Based Incentive Compensation Plans (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 54 | $ 36 | $ 140 | $ 101 |
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted in period, gross (in shares) | 0.6 | 1 | 0.7 | 1.1 |
Options granted in period, weighted average grand date per value (in usd per share) | $ 13.74 | $ 8.08 | $ 13.31 | $ 7.62 |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (in shares) | 5.8 | 8 | 7.2 | 11 |
Shares granted, weighted average grant date fair value (in usd per share) | $ 34.02 | $ 19.39 | $ 32.34 | $ 17.47 |
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants in period (in shares) | 1.5 | 0.8 | 1.6 | 1 |
Shares granted, weighted average grant date fair value (in usd per share) | $ 50.83 | $ 23.97 | $ 50 | $ 21.67 |
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares purchased for award (in shares) | 1.8 | 2.2 | ||
Per share weighted average price of shares purchased (in usd per share) | $ 16.18 | $ 9.57 | 16.18 | 9.57 |
Proceeds from issuance of shares under incentive and share-based compensation plans | $ 29 | $ 21 | ||
Weighted average grant date fair value (in usd per share) | $ 9.52 | $ 3.42 | $ 9.52 | $ 3.42 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) for income taxes | $ 7 | $ 12 | $ (4) | $ 26 |
Income taxes paid | 4 | 7 | 5 | 7 |
U.S. based tax expense (credit) | $ 5 | (13) | 15 | |
Foreign tax expense (benefit) | $ 3 | $ (4) | $ 4 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019USD ($) | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)segment | Sep. 29, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,801 | $ 1,653 | $ 4,604 | $ 5,056 |
Total operating income | 186 | 150 | 283 | 423 |
Share-based compensation expense | 54 | 36 | 140 | 101 |
Loss contingency | 12 | |||
Computing and Graphics | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 1,276 | 938 | 3,047 | 3,139 |
Enterprise, Embedded and Semi-Custom | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 525 | 715 | 1,557 | 1,917 |
Operating Segments | Computing and Graphics | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | 179 | 100 | 217 | 355 |
Operating Segments | Enterprise, Embedded and Semi-Custom | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | 61 | 86 | 218 | 169 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | $ (54) | $ (36) | $ (152) | $ (101) |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | |
Leases [Abstract] | ||
Option to extend, term | 5 years | 5 years |
Operating lease, expense | $ 13 | $ 39 |
Variable lease, cost | 6 | 19 |
Operating lease, payments | $ 14 | $ 36 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information) (Details) | Sep. 28, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term – operating leases | 6 years |
Weighted-average discount rate – operating leases | 6.11% |
Leases (Future Minimum Lease Pa
Leases (Future Minimum Lease Payments) (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 29, 2018 |
Leases [Abstract] | ||
2019 (3 months remaining) | $ 13 | |
2020 | 51 | |
2021 | 46 | |
2022 | 42 | |
2023 | 37 | |
Thereafter | 103 | |
Total minimum lease payments | 292 | |
Less: interest | (53) | |
Present value of net minimum lease payments | 239 | |
Less: current portion | (38) | $ 0 |
Total | $ 201 | $ 0 |
Contingencies (Details)
Contingencies (Details) | Mar. 18, 2019claimpatent | Feb. 21, 2019patent | Jul. 02, 2018claimpatententity |
Advanced Micro Devices, Inc. Shareholder Derivative Litigation | |||
Loss Contingencies [Line Items] | |||
Number of putative class action complaints filed | claim | 2 | ||
MediaTek Litigation | |||
Loss Contingencies [Line Items] | |||
Number of putative class action complaints filed | claim | 4 | ||
Patents allegedly infringed, number | 1 | 6 | |
Quarterhill Inc. Litigation | |||
Loss Contingencies [Line Items] | |||
Number of putative class action complaints filed | claim | 3 | ||
Number of entities filing complaints | entity | 3 | ||
Quarterhill Inc. Litigation, Aquila Innovations Inc. | |||
Loss Contingencies [Line Items] | |||
Patents allegedly infringed, number | 2 | ||
Quarterhill Inc. Litigation, Collabo Innovations, Inc. | |||
Loss Contingencies [Line Items] | |||
Patents allegedly infringed, number | 1 | ||
Quarterhill Inc. Litigation, Polaris Innovations Ltd. | |||
Loss Contingencies [Line Items] | |||
Patents allegedly infringed, number | 2 |