| (1) | The Data Center segment primarily includes server microprocessors and GPUs, data processing units (DPUs), Field Programmable Gate Arrays (FPGAs) and adaptive System-on-Chip (SoC) products for data centers. | ||
| The Client segment primarily includes microprocessors, accelerated processing units (APUs) that integrate microprocessors and graphics, and chipsets for desktop and notebook personal computers. | |||
| The Gaming segment primarily includes discrete graphics processing units (GPUs), semi-custom SoC products and development services. | |||
| The Embedded segment primarily includes embedded microprocessors and GPUs, FPGAs, adaptive SoC products, and Adaptive Compute Acceleration Platform (ACAP) products. | |||
| From time to time, the Company may also sell or license portions of its IP portfolio. | |||
| 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 acquisition-related intangible asset amortization expense, stock-based compensation expense, acquisition-related costs and licensing gain. | |||
| (2) | Reconciliation of GAAP Net Income to Adjusted EBITDA | ||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 24,
2022 | September 25,
2021 | September 24,
2022 | September 25,
2021 | |||||||||||||
| GAAP net income | $ | 66 | $ | 923 | $ | 1,299 | $ | 2,188 | ||||||||
| Interest expense | 31 | 7 | 69 | 26 | ||||||||||||
| Other (income) expense, net | (22 | ) | (62 | ) | 24 | (51 | ) | |||||||||
| Income tax provision (benefit) | (135 | ) | 82 | 32 | 284 | |||||||||||
| Equity income in investee | (4 | ) | (2 | ) | (11 | ) | (6 | ) | ||||||||
| Stock-based compensation | 269 | 99 | 702 | 267 | ||||||||||||
| Depreciation and amortization | 163 | 97 | 450 | 289 | ||||||||||||
| Amortization of acquired intangible assets | 1,002 | — | 2,504 | — | ||||||||||||
| Acquisition-related costs | 57 | 8 | 464 | 33 | ||||||||||||
| Adjusted EBITDA | $ | 1,427 | $ | 1,152 | $ | 5,533 | $ | 3,030 | ||||||||
| The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income for interest expense, other income (expense), net, income tax provision (benefit), equity income in investee, stock-based compensation, depreciation and amortization expense and acquisition-related costs. The Company also included amortization of acquired intangible assets for the three months and nine months ended September 24, 2022. The Company calculates and presents Adjusted EBITDA because 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 income 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 that can affect cash flows. | ||||||||||||||||
