(1) Computing and Graphics segment primarily includes desktop and notebook
processors, chipsets, discrete graphics processing units (GPUs) and
professional graphics.
(2) Enterprise, Embedded and Semi-Custom segment primarily includes server
and embedded processors, semi-custom System-on-Chip (SoC) products,
development services, technology for game consoles and licensing
portions of its intellectual property portfolio.
(3) All Other category primarily includes certain expenses and credits that
are not allocated to any of the operating segments. Also included in
this category are stock-based compensation expense and restructuring
and other special charges, net. In addition, the Company also included
amortization of acquired intangible assets for six months ended June
27, 2015.
(4) Reconciliation of GAAP Operating Loss to Adjusted EBITDA*
Three Months Ended Six Months Ended
----------------------------- ------------------
June 25, March 26, June 27, June 25, June 27,
2016 2016 2015 2016 2015
-------- --------- -------- -------- --------
GAAP operating loss $ (8) $ (68) $ (137) $ (76) $ (274)
Technology node
transition charge - - 33 - 33
Restructuring and
other special
charges, net (7) (3) - (10) 87
Stock-based
compensation 18 16 17 34 34
Amortization of
acquired intangible
assets - - - - 3
Depreciation and
amortization 33 33 45 66 88
-------- --------- -------- -------- --------
Adjusted EBITDA $ 36 $ (22) $ (42) $ 14 $ (29)
======== ========= ======== ======== ========
(5) Non-GAAP free cash flow reconciliation**
Three Months Ended Six Months Ended
----------------------------- ------------------
June 25, March 26, June 27, June 25, June 27,
2016 2016 2015 2016 2015
-------- --------- -------- -------- --------
GAAP net cash used in
operating activities $ (85) $ (42) $ (57) $ (127) $ (229)
Purchases of property,
plant and equipment (21) (26) (17) (47) (39)
-------- --------- -------- -------- --------
Non-GAAP free cash
flow $ (106) $ (68) $ (74) $ (174) $ (268)
======== ========= ======== ======== ========
* The Company presents "Adjusted EBITDA" as a supplemental measure of its
performance. Adjusted EBITDA for the Company is determined by adjusting
operating income (loss) for depreciation and amortization, stock-based
compensation expense and restructuring and other special charges, net.
In addition, the Company excluded a technology node transition charge
for the three months and six months ended June 27, 2015 and
amortization of acquired intangible assets for the six months ended
June 27, 2015. The Company calculates and communicates Adjusted EBITDA
because the Company's management believes it is of importance to
investors and lenders in relation to its overall capital structure and
its ability to borrow additional funds. In addition, the Company
presents Adjusted EBITDA because it believes this measure assists
investors in comparing its performance across reporting periods on a
consistent basis by excluding items that the Company does not believe
are indicative of its core operating performance. The Company's
calculation of Adjusted EBITDA may or may not be consistent with the
calculation of this measure by other companies in the same industry.
Investors should not view Adjusted EBITDA as an alternative to the GAAP
operating measure of operating income (loss) or GAAP liquidity measures
of cash flows from operating, investing and financing activities. In
addition, Adjusted EBITDA does not take into account changes in certain
assets and liabilities as well as interest and income taxes that can
affect cash flows.
** The Company also presents non-GAAP free cash flow as a supplemental
measure of its performance. Non-GAAP free cash flow is determined by
adjusting GAAP net cash provided by (used in) operating activities for
capital expenditures. The Company calculates and communicates non-GAAP
free cash flow in the financial earnings press release because the
Company's management believes it is of importance to investors to
understand the nature of these cash flows. The Company's calculation of
non-GAAP free cash flow may or may not be consistent with the
calculation of this measure by other companies in the same industry.
Investors should not view non-GAAP free cash flow as an alternative to
GAAP liquidity measures of cash flows from operating activities. The
Company has provided reconciliations within the earnings press release
of these non-GAAP financial measures to the most directly comparable
GAAP financial measures.
