Advanced Micro Devices (AMD)
Q4 2009 Earnings Call Transcript
January 21, 2010 5:00 p.m. ET

Executives

Ruth Cotter - Investor Relations
Derrick R. Meyer - President and Chief Executive Officer
Thomas J. Seifert - Chief Financial Officer

Analysts

Glen Yeung - Citigroup
JoAnne Feeney - FTN Midwest Securities
Tim Luke - Barclays Capital
John Pitzer - Credit Suisse
Uche Orji - UBS Warburg
Doug Freedman - Broadpoint AmTech
Craig Berger - Friedman, Billings, Ramsey Group, Inc.
Patrick Wang - Wedbush Morgan Securities, Inc.
Hans Mosesmann - Raymond James & Associates
Ross Seymore - Deutsche Bank
David Wu - GC Research Ltd.
Jim Covello - Goldman Sachs
Chris Danely - J.P. Morgan
Daniel Berenbaum - Auriga USA
Adam Benjamin - Jefferies & Company

Presentation

Operator

Good day, ladies and gentlemen, and welcome to your Advanced Micro Devices Q4 2009 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, which instructions will be given at that time. If any one should require audio assistance, you can press star then zero and an audio operator will assist you. And now it''s my pleasure to announce your host, Ruth Cotter.

Ruth Cotter

Thank you and welcome to AMD''s fourth quarter earnings conference call. Our participants today are Dirk Meyer, our President and CEO and Thomas Seifert, our Chief Financial Officer.

This is a live call and will be replayed by a webcast on AMD.com. There will also be a telephone replay. The replay number is 888-266-2081. Outside of the United States, the number is 703-925-2533. The access code for both is 1422675. The telephone replay will be available for the next 10 days starting later this evening.

I would like to take this opportunity to announce that AMD will hold its 2010 Financial Analyst Day on November 11. We''ll provide you with more detail, including the location of the event, over coming months. I''d also like to call to your attention that our first quarter 2010 earnings quiet time will begin at the close of business on Friday, March 12.

References to AMD on this earnings call refer to AMD Product Company, which refers to the operating results of AMD, excluding our foundry segment and intrasegment eliminations. We provide a reconciliation of AMD Product Company to AMD consolidated operating results, which are reported for GAAP purposes in today''s earnings press release.

Before we begin today''s call, I would like to caution everyone that we will be making forward-looking statements about management''s expectations. Investors are cautioned that those statements are based on current beliefs, assumptions and expectations, speak only as of the current date, and involve risks and uncertainties that could cause actual results to differ materially from our current expectations.

The semiconductor industry is generally volatile and market conditions are particularly difficult to forecast, especially in light of the current state of the economy. We encourage you to review our filings with the SEC, where we discussed the risk factors that could cause actual results to differ materially from our expectations. You''ll find detailed discussions about such risk factors in our most recent SEC filings, AMD''s quarterly earnings report on Form 10-Q for the quarter ended September 26, 2009.

Now, with that, I would like to turn the call over to Dirk Meyer, our CEO. Dirk?

Derrick R. Meyer

Thanks, Ruth and thanks to everybody on the call for joining us today. A year ago in a very cloudy economic environment, we outlined a bold game plan to transform this company into one designed to generate consistent profitability while exploiting the unique combination of x86 and graphics processing technology that only AMD possesses.

We''re pleased with our progress on this transformation, both in the quarter and throughout the past year. We promised to lower our breakeven point and we did. We promised to increase our focus on our core businesses, x86, micro processors and graphics and we have. We promised to execute on our road maps on time and on budget and we did. We promised to expose the truth about the monopolistic environment in which we''re operating and we did. We promised to execute our assets from our strategy and transform ourselves into a fabless company and we did. And we made significant progress in improving our balance sheet, reducing our overall debt by more than $2.2 billion through the creation of global foundries and other debt transactions.

In short, we delivered on every major milestone to which we committed in the past year, placing ourselves in a much stronger position to succeed in the quarters ahead. In the meantime, our fourth quarter operating performance was solid and in an improving global economy, we saw growing customer and end-user response to AMD platforms, products and marketing offerings, with particularly strong performance in our server and discrete graphics businesses.