QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
þ | Accelerated filer | ¨ | ||||
Non-accelerated filer | ¨ | Smaller reporting company | ||||
Emerging growth company |
Page No. | ||
Item 2 | ||
ITEM 1. | FINANCIAL STATEMENTS |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions, except per share amounts) | |||||||||||||||
Net revenue | $ | $ | $ | $ | |||||||||||
Cost of sales | |||||||||||||||
Gross profit | |||||||||||||||
Research and development | |||||||||||||||
Marketing, general and administrative | |||||||||||||||
Licensing gain | ( | ) | |||||||||||||
Operating income | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before income taxes and equity income (loss) | |||||||||||||||
Provision (benefit) for income taxes | ( | ) | |||||||||||||
Equity income (loss) in investee | ( | ) | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Earnings per share | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Shares used in per share calculation | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss), net of tax of zero: | |||||||||||||||
Unrealized gains (losses) on cash flow hedges: | |||||||||||||||
Unrealized losses arising during the period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Losses reclassified into income | |||||||||||||||
Total change in unrealized gains (losses) on cash flow hedges | ( | ) | ( | ) | |||||||||||
Cumulative-effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | |||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions, except par value amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Marketable securities | |||||||
Accounts receivable, net | |||||||
Inventories, net | |||||||
Prepayments and receivables-related parties | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Operating lease right-of-use assets | |||||||
Goodwill | |||||||
Investment: equity method | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt, net | $ | $ | |||||
Accounts payable | |||||||
Payables to related parties | |||||||
Accrued liabilities | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, net | |||||||
Long-term operating lease liabilities | |||||||
Other long-term liabilities | |||||||
Contingencies (See Note 13) | |||||||
Stockholders’ equity: | |||||||
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 | |||||||
Additional paid-in capital | |||||||
Treasury stock, at cost (shares issued: 5 and 5) | ( | ) | ( | ) | |||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Nine Months Ended | |||||||
September 28, 2019 | September 29, 2018 | ||||||
(In millions) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | |||||||
Stock-based compensation | |||||||
Amortization of debt discount and issuance costs | |||||||
Amortization of operating lease right-of-use assets | |||||||
Loss on debt redemption, repurchase and conversion | |||||||
Loss on sale/disposal of property and equipment | |||||||
Other | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Inventories | ( | ) | ( | ) | |||
Prepayments and receivables - related parties | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Payables to related parties | |||||||
Accounts payable, accrued liabilities and other | ( | ) | |||||
Net cash provided by (used in) operating activities | ( | ) | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | ( | ) | ( | ) | |||
Purchases of available-for-sale debt securities | ( | ) | ( | ) | |||
Proceeds from maturity of available-for-sale debt securities | |||||||
Collection of deferred proceeds on sale of receivables | |||||||
Other | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Repayments of short-term debt | ( | ) | |||||
Proceeds from warrant exercise by related party | |||||||
Proceeds from issuance of common stock through employee equity incentive plans | |||||||
Payments to extinguish long-term debt | ( | ) | ( | ) | |||
Other | ( | ) | ( | ) | |||
Net cash provided by financing activities | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | ( | ) | |||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||
Supplemental cash flow information: | |||||||
Non-cash investing and financing activities: | |||||||
Purchases of property and equipment, accrued but not paid | $ | $ | |||||
Issuance of common stock to partially settle convertible debt, net | $ | $ | |||||
Issuance of treasury stock to partially settle debt | $ | $ | |||||
Deferred proceeds on sale of receivables | $ | $ | |||||
Other | $ | $ | |||||
Reconciliation of cash, cash equivalents, and restricted cash | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash included in Prepaid expenses and other current assets | |||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Capital stock | |||||||||||||||
Common stock | |||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||
Common stock issued under employee equity incentive plans, net of tax withholding | — | — | — | ||||||||||||
Issuance of common stock upon warrant exercise | — | — | — | ||||||||||||
Balance, end of period | $ | $ | $ | $ | |||||||||||
Additional paid-in capital | |||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||
Common stock issued under employee equity incentive plans, net of tax withholding | |||||||||||||||
Stock-based compensation | |||||||||||||||
Issuance of common stock upon warrant exercise | — | — | — | ||||||||||||
Issuance of common stock to partially settle convertible debt, net | — | — | |||||||||||||
Issuance of treasury stock to partially settle debt | — | ||||||||||||||
Other | — | — | — | ||||||||||||
Balance, end of period | $ | $ | $ | $ | |||||||||||
Treasury stock | |||||||||||||||
Balance, beginning of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Treasury stock issued under employee equity incentive plans, net of tax withholding | — | ( | ) | — | ( | ) | |||||||||
Issuance of treasury stock to partially settle debt | — | ||||||||||||||
Other | ( | ) | — | ( | ) | ( | ) | ||||||||
Balance, end of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Accumulated deficit | |||||||||||||||
Balance, beginning of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net income | |||||||||||||||
Cumulative effect adjustment to accumulated deficit related to the adoption of ASU 2016-01, Financial Instruments | — | — | — | ||||||||||||
Balance, end of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Accumulated other comprehensive income (loss) | |||||||||||||||
Balance, beginning of period | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Other comprehensive income (loss) | ( | ) | — | ( | ) | ||||||||||
Balance, end of period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total stockholders' equity | $ | $ | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Raw materials | $ | $ | |||||
Work in process | |||||||
Finished goods | |||||||
Total inventories, net | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Leasehold improvements | $ | $ | |||||
Equipment | |||||||
Construction in progress | |||||||
Property and equipment, gross | |||||||
Accumulated depreciation | ( | ) | ( | ) | |||
Total property and equipment, net | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Software technology and licenses, net | $ | $ | |||||
Other | |||||||
Total other assets | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Accrued compensation and benefits | $ | $ | |||||
Marketing programs and advertising expenses | |||||||
Software technology and licenses payable | |||||||
Other | |||||||
Total accrued liabilities | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Unearned revenue | $ | $ | |||||
Operating lease liabilities | |||||||
Other | |||||||
Total other current liabilities | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||
Unearned revenue | |||||||||||||||
Revenue recognized during the period | ( | ) | ( | ) | ( | ) | |||||||||
Other | ( | ) | ( | ) | |||||||||||
Ending balance | $ | $ | $ | $ |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Principal amounts: | |||||||
Principal | $ | $ | |||||
Unamortized debt discount(1) | ( | ) | ( | ) | |||
Unamortized debt issuance costs | ( | ) | ( | ) | |||
Net carrying amount | $ | $ | |||||
Carrying amount of the equity component, net(2) | $ | $ |
(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 $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Contractual interest expense | $ | $ | $ | $ | |||||||||||
Interest cost related to amortization of debt issuance costs | $ | $ | $ | $ | |||||||||||
Interest cost related to amortization of the debt discount | $ | $ | $ | $ |
Total Fair Value | Cash and Cash Equivalents | Short-Term Marketable Securities | |||||||||
(In millions) | |||||||||||
September 28, 2019 | |||||||||||
Cash | $ | $ | $ | ||||||||
Level 1(1) | |||||||||||
Government money market funds | $ | $ | $ | ||||||||
Total level 1 | $ | $ | $ | ||||||||
Level 2(2) | |||||||||||
Commercial paper | $ | $ | $ | ||||||||
Total level 2 | $ | $ | $ | ||||||||
Total | $ | $ | $ |
Total Fair Value | Cash and Cash Equivalents | Short-Term Marketable Securities | |||||||||
(In millions) | |||||||||||
December 29, 2018 | |||||||||||
Cash | $ | $ | $ | ||||||||
Level 1(1) | |||||||||||
Government money market funds | $ | $ | $ | ||||||||
Total level 1 | $ | $ | $ | ||||||||
Level 2(2) | |||||||||||
Commercial paper | $ | $ | $ | ||||||||
Total level 2 | $ | $ | $ | ||||||||
Total | $ | $ | $ |
(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. |
September 28, 2019 | December 29, 2018 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
(In millions) | |||||||||||||||
Short-term debt, net | $ | $ | $ | $ | |||||||||||
Long-term debt, net(1) | $ | $ | $ | $ |
(1) | Carrying amounts of long-term debt are net of unamortized debt issuance costs of $ |
Three Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | ||||||||||||||||||||||
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 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||
Foreign Currency Forward Contracts - losses | |||||||||||||||||||||||
Contracts designated as cash flow hedging instruments | |||||||||||||||||||||||
Losses reclassified from OCI into income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Contracts not designated as hedging instruments | |||||||||||||||||||||||
Losses recognized in income | ( | ) | |||||||||||||||||||||
Total losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
Nine Months Ended | |||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | ||||||||||||||||||||||
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 | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||
Foreign Currency Forward Contracts - losses | |||||||||||||||||||||||
Contracts designated as cash flow hedging instruments | |||||||||||||||||||||||
Losses reclassified from OCI into income | ( | ) | ( | ) | |||||||||||||||||||
Contracts not designated as hedging instruments | |||||||||||||||||||||||
Losses recognized in income | ( | ) | ( | ) | |||||||||||||||||||
Total losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) |
September 28, 2019 | December 29, 2018 | ||||||
(In millions) | |||||||
Foreign Currency Forward Contracts - gains (losses) | |||||||
Contracts designated as cash flow hedging instruments - gains | $ | $ | |||||
Contracts designated as cash flow hedging instruments - losses | $ | ( | ) | $ | ( | ) |
Three Months Ended | Nine Months Ended | ||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||
(In millions) | |||||||||||||
Beginning balance | $ | $ | ( | ) | ( | ) | |||||||
Unrealized losses on cash flow hedges | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Losses reclassified into income | |||||||||||||
Total other comprehensive income (loss) | ( | ) | ( | ) | |||||||||
Ending balance | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions, except per share amounts) | |||||||||||||||
Numerator | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Denominator | |||||||||||||||
Basic weighted-average shares | |||||||||||||||
Effect of potentially dilutive shares: | |||||||||||||||
Employee equity incentive plans and warrants | |||||||||||||||
Diluted weighted-average shares | |||||||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ |
• | 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. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Net revenue: | |||||||||||||||
Computing and Graphics | $ | $ | $ | $ | |||||||||||
Enterprise, Embedded and Semi-Custom | |||||||||||||||
Total net revenue | $ | $ | $ | $ | |||||||||||
Operating income (loss): | |||||||||||||||
Computing and Graphics | $ | $ | $ | $ | |||||||||||
Enterprise, Embedded and Semi-Custom | |||||||||||||||
All Other (1) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total operating income | $ | $ | $ | $ |
(1) |
September 28, 2019 | ||
Weighted-average remaining lease term – operating leases | ||
Weighted-average discount rate – operating leases | % |
September 28, 2019 | |||
(In millions) | |||
2019 (3 months remaining) | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total minimum lease payments | $ | ||
Less: interest | ( | ) | |
Present value of net minimum lease payments | |||
Less: current portion | ( | ) | |
Total | $ |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | x86 microprocessors, as standalone devices or as incorporated into an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), datacenter and professional GPUs, and development services; and |
• | server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
(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 | (54 | ) | (36 | ) | (152 | ) | (101 | ) | |||||||
Total operating income | $ | 186 | $ | 150 | $ | 283 | $ | 423 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(In millions except for percentages) | ||||||||||||||||
Cost of sales | $ | 1,024 | $ | 992 | $ | 2,685 | $ | 3,146 | ||||||||
Gross profit | 777 | 661 | 1,919 | 1,910 | ||||||||||||
Gross margin percentage | 43 | % | 40 | % | 42 | % | 38 | % | ||||||||
Research and development | 406 | 363 | 1,152 | 1,063 | ||||||||||||
Marketing, general and administrative | 185 | 148 | 544 | 424 | ||||||||||||
Licensing gain | — | — | (60 | ) | — | |||||||||||
Interest expense | (24 | ) | (30 | ) | (76 | ) | (92 | ) | ||||||||
Other expense, net | (36 | ) | (6 | ) | (40 | ) | (4 | ) | ||||||||
Provision (benefit) for income taxes | 7 | 12 | (4 | ) | 26 | |||||||||||
Equity income (loss) in investee | 1 | — | — | (2 | ) |
Nine Months Ended | ||||||||
September 28, 2019 | September 29, 2018 | |||||||
(In millions) | ||||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 51 | $ | (86 | ) | |||
Investing activities | $ | (123 | ) | $ | (82 | ) | ||
Financing activities | $ | 150 | $ | 28 |
Payments due by period as of September 28, 2019 | |||||||||||||||||||||||||||
(In millions) | Total | 2019 (3 months remaining) | 2020 | 2021 | 2022 | 2023 | 2024 and thereafter | ||||||||||||||||||||
Term Debt | $ | 1,087 | $ | — | $ | — | $ | — | $ | 312 | $ | — | $ | 775 | |||||||||||||
Other long-term liabilities (1) | 150 | 7 | 52 | 49 | 39 | 1 | 2 | ||||||||||||||||||||
Aggregate interest obligation (2) | 204 | 11 | 46 | 46 | 37 | 22 | 42 | ||||||||||||||||||||
Operating leases | 292 | 13 | 51 | 46 | 42 | 37 | 103 | ||||||||||||||||||||
Purchase obligations (3) | 2,589 | 1,036 | 956 | 588 | 7 | 2 | — | ||||||||||||||||||||
Total contractual obligations (4) | $ | 4,322 | $ | 1,067 | $ | 1,105 | $ | 729 | $ | 437 | $ | 62 | $ | 922 |
(1) | Amounts primarily represent future fixed and non-cancellable cash payments associated with software technology and licenses and IP licenses, including payments due within the next 12 months. |
(2) | Represents interest obligations, payable in cash, for our outstanding debt. |
(3) | Represents purchase obligations for goods and services where payments are based, in part, on the volume or type of services we acquire. In those cases, we only include the minimum volume of purchase obligations in the table above. Purchase orders for goods and services that are cancellable upon notice and without significant penalties are not included in the amounts above. |
(4) | Total amount excludes contractual obligations already recorded on our condensed consolidated balance sheets except for debt obligations, leases, and other liabilities related to software and technology licenses and IP licenses. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
• | business practices, including rebating and allocation strategies and pricing actions, designed to limit our market share and margins; |
• | de facto control over industry standards, and heavy influence on PC manufacturers and other PC industry participants, including motherboard, memory, chipset and basic input/output system (BIOS) suppliers and software companies as well as the graphics interface for Intel platforms; and |
• | marketing and advertising expenditures in support of positioning the Intel brand over the brand of its original equipment manufacturer OEM customers and retailers. |
• | expropriation; |
• | compliance with U.S. laws and regulations related to international operations, including export control and economic sanctions laws and regulations and the Foreign Corrupt Practices Act. |
• | enhancing and implementing information security controls, including costs related to upgrading application, computer, and network security components; |
• | compliance with external regulations, such as the European Union's General Data Protection Regulation and the California Consumer Privacy Act. |
• | make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments; |
• | limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate and other purposes; |
• | limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general corporate purposes; |
• | create or permit restrictions on the ability of certain restricted subsidiaries to pay dividends or make other distributions to us; |
• | a sudden or significant decrease in demand for our products; |
• | a failure to accurately estimate customer demand for our products, including for our older products as our new products are introduced; or |
• | substantial declines in average selling prices; |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 6. | EXHIBITS |
*10.1 | ||
*10.2 | ||
*10.3 | ||
*10.4 | ||
*10.5 | ||
*10.6 | ||
*10.7 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Management contracts and compensatory plans or arrangements. |
ADVANCED MICRO DEVICES, INC. | |||
October 30, 2019 | By: | /s/Devinder Kumar | |
Name: | Devinder Kumar | ||
Title: | Senior Vice President, Chief Financial Officer and Treasurer Signing on behalf of the Registrant as the Principal Financial Officer |
• | An award of $4,000,000 USD in value granted in Advanced Micro Devices, Inc. Restricted Stock Units (RSUs) The number of RSUs granted will generally be determined by dividing your award value by the 30-trading day average closing stock price prior to and including the grant date. RSUs will be granted on August9th following your start date. |
• | 1/3rd of the RSUs will vest on the first, second, and third anniversary of the grant date, subject to continued active service through each applicable vesting date. |
• | These RSUs will be granted by Advanced Micro Devices, Inc. and are separate from your regular compensation, with rights and obligations governed by the applicable grant and equity plan documents. |
• | An award of $2,500,000 USD in value granted in Advanced Micro Devices, Inc. shares, to be granted as 50% ($1,250,000) in value of Performance Restricted Stock Units (PRSUs), 25% ($625,000) in value of Stock Options, and 25% ($625,000) in value of RSUs; |
• | The number of PRSUs and RSUs granted will generally be determined by dividing your award value by the 30-trading day average closing stock price prior to and including the grant date. Your Option award value will be further determined using a binomial factor in accordance with the Company’s stock option valuation practices. |
• | PRSUs, RSUs and Options will be granted on August 9th following your start date. |
• | 1/3 of these RSUs and Options will vest on the first, second, and third anniversary of the grant date, subject to continued active service through each applicable vesting date. |
• | Stock Options will have an exercise price equal to 100% of the fair market value of the Company’s common stock on the grant date. |
• | Earned and vested PRSUs will generally be settled on the later of August 15, 2022, or the date following the Committee’s certification of performance. |
• | These PRSUs, Options, and RSUs will be granted by Advanced Micro Devices, Inc. and are separate from your regular compensation, with rights and obligations governed by the applicable grant and equity plan documents. |
• | 401(k) and Roth 401(k) Retirement Savings Plan with Company Match |
• | Medical, Dental and Vision Plans |
• | Healthcare and Dependent Care Reimbursement Accounts |
• | In your situation, we are offering you 20 days of vacation minimum, subject to our typical vacation accrual policies. In addition, AMD offers its employees paid sick leave and at least 11 paid holidays each year (8 fixed days and 3 ‘floating’ days). These paid time away offerings are governed by the terms of AMD’s policies for your work location. |
a. | Repayment Due to Termination of Employment. If Employee’s employment with AMD terminates less than 13 full months after the Bonus payment date, Employee agrees to repay one hundred percent (100%) of the Bonus. If Employee’s employment with AMD terminates at least 13 full months after the Bonus payment date, but less than 24 full months after the Bonus payment date, Candidate agrees to repay the full amount of the Bonus, less eight point thirty-three percent (8.33%) for each full month of employment completed after the twelfth month of employment. Employee agrees that repayment obligations under this Agreement are not reduced by completion of partial months of employment other than as stated in this paragraph. Employee further agrees that Employee will repay the Bonus by no later than the effective date of the employment termination, and that any outstanding balance on such repayment obligation is delinquent and immediately collectable the day following the effective date of termination, or on the date notice of resignation is provided, whichever is earlier. |
b. | Repayment Forgiveness. AMD agrees to forgive any repayment due AMD under this Agreement where AMD terminates Employee’s employment due to a company- or department-wide reduction-in-force. AMD may also, in its sole discretion, forgive any repayment due AMD under this Agreement under circumstances of an extraordinary or unavoidable nature. The Parties agree that Employee’s voluntary termination of his/her employment, or AMD’s termination of Employee’s employment for any reason other than those stated in this section 2(b), are not conditions requiring forgiveness of any repayment due AMD under this Agreement. |
Participant: | Lisa T. Su | |||
Employee ID: | [number] | |||
Grant Date: | August 9, 2019 | |||
Target Number of PRSUs: | 775,193 | |||
Performance Period: | August 9, 2019 through August 9, 2024 or, if earlier, the date on which occurs a Change of Control | |||
Vesting Schedule: | See Exhibit A attached hereto. | |||
Intended Award Value: | $25,000,000 | |||
Settlement Date: | As soon as reasonably practicable after the underlying PRSU vests. |
ADVANCED MICRO DEVICES, INC. | PARTICIPANT | |||
By: | /s/ Harry A. Wolin | By: | /s/Lisa T. Su | |
Print Name: | Harry A. Wolin | Print Name: | Lisa T. Su | |
Title: | Senior Vice President, General Counsel and Corporate Secretary |
6. | Other Terms and Conditions. |
7. | Nature of Grant. In accepting this Award, you acknowledge, understand and agree that: |
• | your Data to be transferred to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan; |
• | the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan, to receive, possess, use, retain and transfer your Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan; and |
• | your Data to be held only as long as is necessary to implement, administer and manage your participation in the Plan. |
Participant: | Mark Papermaster | |||
Employee ID: | [number] | |||
Grant Date: | August 9, 2019 | |||
Target Number of PRSUs: | 217,054 | |||
Performance Period: | August 9, 2019 through August 9, 2024 or, if earlier, the date on which occurs a Change of Control | |||
Vesting Schedule: | See Exhibit A attached hereto. | |||
Intended Award Value: | $7,000,000 | |||
Settlement Date: | As soon as reasonably practicable after the underlying PRSU vests.. |
ADVANCED MICRO DEVICES, INC. | PARTICIPANT | |||
By: | /s/ Harry A. Wolin | By: | /s/ Mark Papermaster | |
Print Name: | Harry A. Wolin | Print Name: | Mark Papermaster | |
Title: | Senior Vice President, General Counsel and Corporate Secretary |
6. | Other Terms and Conditions. |
7. | Nature of Grant. In accepting this Award, you acknowledge, understand and agree that: |
• | your Data to be transferred to a Company-designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan; |
• | the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan, to receive, possess, use, retain and transfer your Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan; and |
• | your Data to be held only as long as is necessary to implement, administer and manage your participation in the Plan. |
A. | “Award” means, with respect to each Participant, any cash incentive payment made under the Plan for a Performance Period. |
B. | “Code” means the Internal Revenue Code of 1986, as amended. |
C. | “Committee” means the Compensation and Leadership Resources Committee of AMD’s Board of Directors, or such other committee designated by that Board of Directors, which is authorized to administer the Plan under Section 3 hereof. |
D. | “Company” means AMD and any corporation or other business entity of which AMD (i) directly or indirectly has an ownership interest of 50% or more, or (ii) has a right to elect or appoint 50% or more of the board of directors or other governing body. |
E. | “Key Employee” means any employee of the Company whose performance the Committee determines can have a significant effect on the success of the Company. |
F. | “Participant” means any Key Employee to whom an Award is granted under the Plan. |
G. | “Performance Period” means any fiscal year of the Company or such other period as determined by the Committee. |
H. | “Plan” means this Plan, which shall be known as the AMD Executive Incentive Plan. |
I. | “Misconduct” means, as determined in the sole discretion of the Committee, a Participant’s: (a) violation of his or her obligations regarding confidentiality, or the protection of sensitive, confidential, or proprietary information and trade secrets; (b) act or omission resulting in Participant being charged with a criminal offense involving moral turpitude, dishonesty, or breach of trust; (c) engaging in conduct which constitutes a felony (or state law equivalent), or plea of guilty or nolo |
A. | The Plan shall be administered by the Committee. The Committee shall have the authority to: |
(i) | interpret and determine all questions of policy and expediency pertaining to the Plan; |
(ii) | adopt such rules, regulations, agreements and instruments as it deems necessary for its proper administration; |
(iii) | select Key Employees to receive Awards; |
(iv) | determine the terms of Awards; |
(v) | determine amounts subject to Awards (within the limits prescribed in the Plan); |
(vi) | determine whether Awards will be granted in replacement of or as alternatives to any other incentive or compensation plan of the Company or an acquired business unit; |
(vii) | grant waivers of Plan or Award conditions; |
(viii) | accelerate the payment of Awards; |
(ix) | correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award notice; |
(x) | take any and all other actions it deems necessary or advisable for the proper administration of the Plan; |
(xi) | adopt such Plan procedures, regulations, subplans and the like as it deems are necessary to enable Key Employees to receive Awards; and |
(xii) | amend the Plan at any time and from time to time. |
B. | The Committee may delegate its authority to grant and administer Awards to a separate committee. |
A. | The Committee shall set forth in writing objectively determinable performance goals (“Performance Goals”) applicable to a Participant for a Performance Period prior to the commencement of such Performance Period, provided, however, that such goals may be established after the start of the Performance Period. |
B. | Each Performance Goal shall relate to one or more of the following criteria: |
• | Net income |
• | Operating income |
• | Earnings before interest and taxes |
• | Earnings before interest, taxes, depreciation and amortization |
• | Earnings per share |
• | Return on investment |
• | Return on capital |
• | Return on invested capital |
• | Return on capital compared to cost of capital |
• | Return on capital employed |
• | Return on equity |
• | Return on assets |
• | Return on net assets |
• | Total stockholder return |
• | Stockholder return |
• | Cash return on capitalization |
• | Revenue |
• | Revenue ratios (per employee or per customer) |
• | Stock price |
• | Market share |
• | Stockholder value |
• | Net cash flow |
• | Cash flow |
• | Cash flow from operations |
• | Cash balance |
• | Cash conversion cycle |
• | Cost reductions and cost ratios (per employee or per customer) |
• | New product releases |
• | Strategic positioning programs, including the achievement of specified milestones or the completion of specified projects |
• | Performance and/or potential of the individual Participant |
• | Any other criteria as determined by the Committee in its sole discretion. |
C. | A Performance Goal applicable to an Award may provide for a targeted level or levels of achievement measured on a GAAP or non-GAAP basis, as determined by the Committee. A Performance Goal also may (but is not required to) be based solely by reference to the performance of the individual, the Company as a whole or any subsidiary, division, business segment or business unit of the Company, or any combination thereof or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to a peer group of other companies. Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). The Committee, in its sole discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals applicable to an Award. Such adjustments may include one or more of the following: (a) items related to a change in accounting principle; (b) items relating to financing activities; (c) expenses for restructuring or productivity initiatives; (d) other non-operating items; (e) items related to acquisitions; (f) items attributable to the business operations of any entity acquired by the Company during the applicable performance period; (g) items related to the disposal of a business or segment of a business; (h) items related to discontinued operations that do not qualify as a segment of a business under applicable accounting standards; (i) items attributable to any stock |
D. | The Committee shall establish in writing a bonus formula specifying the target level and/or other level(s) of performance that must be achieved with respect to each criterion that is identified in a Performance Goal in order for an Award to be payable and shall, for each Participant, establish in writing a target (and/or other level(s)) Award payable under the Plan for the Performance Period upon attainment of the Performance Goals. |
E. | In the event Performance Goals are based on more than one criterion, the Committee may determine to make Awards upon attainment of the Performance Goal relating to any one or more of such criteria, provided the Performance Goals, when established, are stated as alternatives to one another at the time the Performance Goal is established. |
A. | During any fiscal year of the Company, no Participant shall receive an Award of more than $10,000,000. |
B. | No Award shall be paid to a Participant unless and until the Committee makes a certification in writing with respect to the attainment of the Performance Goals. The Committee may in its sole discretion eliminate, reduce or increase an Award payable to a Participant pursuant to the applicable bonus formula. |
C. | Unless otherwise directed by the Committee, each Award shall be paid on the March 15 immediately following the end of the Performance Period to which such Award relates. |
D. | The payment of an Award requires that the Participant be on the Company’s payroll as of the date of payment of the Award; provided, however, that if the Participant’s employment ends prior to the date of payment of the Award other than due to such Participant’s involuntary employment termination for Misconduct, the Committee, in its sole discretion, may pay an Award to the Participant for the portion of the Performance Period that the Participant was employed by the Company, computed as determined by the Committee. For added clarity, unless applicable legislation mandates otherwise, no notice period, whether given by a Participant as notice of resignation or given by the Company (or which a court or tribunal determines ought |
E. | The Company shall withhold all applicable federal, state, local and foreign taxes required by law to be paid or withheld relating to the receipt or payment of any Award. |
F. | At the discretion of the Committee, payment of an Award or any portion thereof may be deferred under a nonqualified deferred compensation plan maintained by the Committee until a time established by the Committee and in accordance with the terms of such plan. |
G. | If a Participant is determined by the Committee, in its discretion, to have committed Misconduct, then, unless otherwise provided in the Participant’s employment or other written agreement between the Participant and the Company that expressly refers to the Plan, the Participant shall immediately and irrevocably forfeit his or her right to receive any payments under the Plan. |
A. | Any rights of a Participant under the Plan shall not be assignable by such Participant, by operation of law or otherwise, except by will or the laws of descent and distribution. No Participant may create a lien on any funds or rights to which he or she may have an interest under the Plan, or which is held by the Company for the account of the Participant under the Plan. |
B. | Participation in the Plan shall not give any Key Employee any right to remain in the employ of the Company. Further, the adoption of this Plan shall not be deemed to give any Key Employee or other individual the right to be selected as a Participant or to be granted an Award. |
C. | The Plan shall constitute an unfunded, unsecured obligation of the Company to make bonus payments from its general assets in accordance with the provisions of the Plan. To the extent any person acquires a right to receive payments from the Company under this Plan, such rights shall be no greater than the rights of an unsecured creditor of the Company. |
D. | The Plan shall be governed by and construed in accordance with the laws of the State of Delaware. |
E. | The Board may amend or terminate the Plan at any time and for any reason. |
• | to attract and retain the best available personnel, |
• | to compete effectively for the best personnel, and |
• | to promote the success of the Company’s business by motivating Employees, Directors and Consultants to superior performance. |
(a) | “Administrator” means the Board or any of its delegates, including committees, administering the Plan, in accordance with Section 4 of the Plan. |
(b) | “Affiliate” means any corporation, partnership, joint venture or other entity in which the Company holds an equity, profit or voting interest of thirty percent (30%) or more; provided, however, that with respect to Awards granted on or after May 5, 2006 “Affiliate” shall mean any corporation, partnership, joint venture or other entity in which the Company holds an equity, profit or voting interest of more than fifty percent (50%). |
(c) | “Applicable Laws” means the requirements relating to the administration of equity compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan. |
(d) | “Award” means, individually or collectively, a grant under the Plan of NSOs, ISOs, SARs, Restricted Stock, or RSUs. |
(e) | “Award Documentation” means any written agreement or documentation published by the Company setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Documentation is subject to the terms and conditions of the Plan. |
(f) | “Awarded Stock” means the Common Stock subject to an Award. |
(g) | “Board” means the Board of Directors of the Company or its delegate. |
(h) | “Change of Control” Unless otherwise defined in Award Documentation or a Participant’s employment agreement, the term “Change of Control” shall mean any of the following events: |
(i) | any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including the securities beneficially owned by such person any securities acquired directly from the Company or any of its Affiliates) representing more than 20% of either the then outstanding shares of the Common Stock of the Company or the combined voting power of the Company’s then outstanding voting securities; |
(ii) | during any period of two consecutive years, individuals who at the beginning of such period constituted the Board and any new director (other than a director designated by a person who has entered into an agreement or arrangement with the Company to effect a transaction described in clause (i) or (ii) of this sentence) whose appointment, election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose appointment, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; |
(iii) | there is consummated a merger or consolidation of the Company or subsidiary thereof with or into any other corporation, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding securities which represent immediately after such merger or consolidation more than 50% of the combined voting power of the voting securities of either the Company or the other entity which survives such merger or consolidation or the parent of the entity which survives such merger or consolidation; or |
(iv) | the stockholders of the Company approve a plan of complete liquidation of the Company and such plan of complete liquidation of the Company is consummated or there is consummated the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 80% of the combined voting power of the voting securities of which are owned by persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. |
(i) | “Code” means the Internal Revenue Code of 1986, as amended. |
(j) | “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. |
(k) | “Common Stock” means the common stock of the Company. |
(l) | “Company” means Advanced Micro Devices, Inc., a Delaware corporation. |
(m) | “Constructive Termination” shall mean a resignation by a Participant who has been selected by the Board as a corporate officer of the Company due to diminution or adverse change in the circumstances of such Participant’s service as such a corporate officer, as determined in good faith by the Participant; including, without limitation, reporting relationships, job description, duties, responsibilities, compensation, perquisites, office or location of employment. Constructive Termination shall be communicated by written notice to the Company (or successor to the Company), and such termination shall be deemed to occur on the date such notice is so delivered. |
(n) | “Consultant” means any natural person, including an advisor, engaged by the Company or Affiliate to render services to such entity. |
(o) | “Director” means a member of the Board of Directors of Advanced Micro Devices, Inc. |
(p) | “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. |
(q) | “Employee” means any person, including Officers and Directors, who is an employee of the Company or any Affiliate. An Employee shall not cease to be treated as an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, any Affiliate, or any successor corporation. Neither service as a Director nor payment of a director’s fee by the Company or any Affiliate shall be sufficient to constitute status as an Employee. |
(r) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
(s) | “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: |
(i) | If the Common Stock is listed on any established stock exchange, including without limitation the New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange (or the exchange with the greatest volume of trading in the Common Stock) for such date, or if no bids or sales were reported for such date, then the closing sales price (or the closing bid, if no sales were reported) on the trading date immediately prior to such date during which a bid or sale occurred, in each case, as reported by Bloomberg.com or such other source as the Administrator deems reliable; |
(ii) | If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock for such date, or if no bid or asked prices were reported for such date, then the bid and asked prices on the date immediately prior to such date during which bid and asked prices were reported; or |
(iii) | In the absence of an established market for the Common Stock, its Fair Market Value shall be determined in good faith by the Administrator. |
(t) | “Grandfathered Qualified Performance-Based Award” means an Award granted on or before November 2, 2017, to a “covered employee” (within the meaning of Prior Section 162(m) of the Code) that the Administrator intends to qualify as, and which satisfies all requirements to qualify as, “performance-based compensation” (within the meaning of Prior Section 162(m) of the Code). |
(u) | “Incentive Stock Option” or “ISO” means an option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. |
(v) | “Independent Director” means a Director of the Company who is not also an Employee of the Company and who qualifies as a “Non-Employee Director” for purposes of Section 16(b) of the Exchange Act. |
(w) | “Misconduct” means, for Awards granted on or after May 14, 2019, a Participant is determined by the Administrator in its sole discretion to have: |
(i) | violated his or her obligations to the Company (or Affiliate) regarding confidentiality, or the protection of sensitive, confidential, or proprietary information and trade secrets, |
(ii) | committed any act or omission resulting in the Participant being charged with a criminal offense involving moral turpitude, dishonesty, or breach of trust, |
(iii) | engaged in conduct that constitutes a felony, or entered a plea of guilty (or state law equivalent) or nolo contendere with respect to a felony (or state law equivalent) under applicable law, |
(iv) | engaged in conduct that constitutes gross neglect, |
(v) | acted insubordinately or refused to implement the lawful directives of his or her manager, |
(vi) | been chronically absent other than pursuant to an approved leave of absence per the Company’s (or Affiliate’s) policies, or |
(vii) | failed to cooperate with any internal investigation of the Company (or Affiliate), |
(viii) | violated the Company’s Worldwide Standards of Business Conduct or committed other acts of misconduct, or violated any state or federal law relating to the workplace (including laws related to sexual harassment or age, sex or other prohibited discrimination), |
(ix) | materially breached the AMD Agreement or any Company (or Affiliate) policy applicable to Participant, or any written agreement between the Participant and Company (or Affiliate), |
(x) | failed to substantially and satisfactorily perform his or her job duties with the Company (or Affiliate). |
(x) | “Nonstatutory Stock Option” or “NSO” means an Option not intended to qualify as an Incentive Stock Option. |
(y) | “Notice of Grant” means a written or electronic notice evidencing certain terms and conditions of an individual Award. The Notice of Grant is part of the Award Documentation. |
(z) | “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. |
(aa) | “Option” means an NSO or ISO granted pursuant to Section 8 of the Plan. |
(bb) | “Option Agreement” means an agreement between the Company and a Participant evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. |
(cc) | “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. |
(dd) | “Participant” means the holder of an outstanding Award granted under the Plan. |
(ee) | “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Administrator, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement, measured on a generally accepted accounting principles (GAAP) or non-GAAP basis, relating to net income, operating income, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, earnings per share, return on investment, return on capital, return on invested capital, return on capital compared to cost of capital, return on |
(gg) | “Prior Section 162(m) of the Code” means Section 162(m) of the Code as in effect immediately prior to the amendments made to Section 162(m) of the Code by Section 13601 of the Tax Cuts and Jobs Act of 2017, and the regulations and other guidance promulgated thereunder. |
(hh) | “Restricted Stock” means shares of Common Stock granted pursuant to Section 10 of the Plan that are subject to vesting, if any, based on continuing as a Service Provider and/or based on Performance Goals. |
(ii) | “Restricted Stock Unit” or “RSU” means an Award, granted pursuant to Section 11 of the Plan. |
(jj) | “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. |
(kk) | “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with a related Option that is granted pursuant to Section 9 of the Plan. |
(ll) | “Section 16(b)” means Section 16(b) of the Exchange Act. |
(mm) | “Service Provider” means an Employee, Director or Consultant; subject to the limitations in Section 12 of the Plan with regard to Awards granted to Outside Directors. |
(nn) | “Share” means each share of Common Stock reserved under the Plan or subject to an Award, and as adjusted in accordance with Section 15(a) of the Plan. |
(oo) | “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code. |
(a) | Reserve. Subject to the provisions of Section 15(a) of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 283,150,000 Shares plus: (i) the number of shares of Common Stock reserved under the Company’s the 1995 Stock Plan of NexGen, Inc., 1996 Stock Incentive Plan, the 1998 Stock Incentive Plan and the 2000 Stock Incentive Plan (the “Prior Plans”) that are not subject to outstanding awards under the Prior Plans on April 29, 2004 (the “Effective Date”), and (ii) the number of shares of Common Stock that are released from, or reacquired by the Company from, awards outstanding under the Prior Plans at the Effective Date. Shares reserved under this Plan that correspond to shares of Common Stock covered by part (ii) of the immediately preceding sentence shall not be available for grant and issuance pursuant to this Plan except as such shares of Common Stock cease to be subject to such outstanding awards, or are repurchased at the original issue price by the Company, or are forfeited. The Shares may be authorized, but unissued, or reacquired Common Stock. |
(b) | Reissuance. If Shares are: (i) subject to an Award that terminates without such Shares being issued, or (ii) issued pursuant to an Award, but are repurchased at the original issue price by the Company, or (iii) forfeited; then such Shares will again be available for grant and issuance under this Plan. At all times the Company will reserve and keep available the number of Shares necessary to satisfy the requirements of all Awards then vested and outstanding under this Plan. To the extent an Award under the Plan is paid out in cash rather than stock, such cash payment shall not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3(b), no Shares may again be optioned, granted or awarded if such action would cause an ISO to fail to qualify as an incentive stock option under Section 422 of the Code. |
(c) | Non-Reissuance. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added back to the Shares authorized for grant under this Section 3: (i) Shares tendered by the Participant or withheld by the Company in payment of the exercise price of an Option, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award and (iii) Shares that were subject to a stock-settled SAR and were not issued upon the net settlement or net exercise of such SAR. |
(a) | Procedure. |
(i) | Section 162(m). To the extent that the Administrator determines it to be desirable to continue to qualify a Grandfathered Qualified Performance-Based Award as “performance-based compensation” within the meaning of Prior Section 162(m) of the Code, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption of “performance-based compensation” under Prior Section 162(m) of the Code. Notwithstanding any other provision in the Plan, the Plan is not intended to modify in any material respect any Grandfathered Qualified Performance-Based Award. |
(ii) | Rule 16b-3. To the extent that the Administrator determines it to be desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. |
(iii) | Other Administration. Other than as provided above, the Plan shall be administered by the Administrator in a manner to satisfy Applicable Laws. |
(b) | Powers of the Administrator. Subject to the provisions of the Plan, including, without limitation Section 17, and in the case of a Board delegate, subject to the specific duties delegated by the Board to such Board delegate, the Administrator shall have the authority, in its discretion: |
(i) | to determine the Fair Market Value as defined above; |
(ii) | to select the Service Providers to whom Awards may be granted hereunder; |
(iii) | to determine the number of shares of Common Stock to be covered by each Award granted hereunder; |
(iv) | to approve forms of agreement and documentation for use under the Plan; |
(v) | to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or SARs may be exercised (which may be based on performance criteria), transferability, any vesting acceleration or waiver of forfeiture or repurchase restrictions, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; |
(vi) | to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; |
(vii) | to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; |
(viii) | to modify or amend each Award (subject to Section 17 of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options or SARs; |
(ix) | to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to be issued upon exercise or vesting of an Award that number of Shares or cash having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of any Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares or cash withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; |
(x) | to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; |
(xi) | to ensure that all Awards granted pursuant to the Plan comply with or are exempt from the provisions of Section 409A of the Code; and |
(xii) | to make all other determinations deemed necessary or advisable for administering the Plan. |
(c) | Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants. |
(a) | No Rights as a Service Provider. Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing their relationship as a Service Provider, nor shall they interfere in any way with |
(b) | Vesting; Exercise; Rights as a Stockholder; Effect of Exercise. |
(i) | Any Award granted hereunder shall be exercisable or vest according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Documentation, including, without limitation, Participant’s continuous status as a Service Provider and/or Participant’s satisfaction of Performance Goals. Notwithstanding any other provision of the Plan to the contrary, Awards of Options, SARs, Restricted Stock Units and Restricted Stock granted after April 29, 2015, shall not vest earlier than the date that is one year following the date the Award is made; provided, however, that, notwithstanding the foregoing, (A) the Administrator may provide that such vesting restrictions may lapse or be waived upon the Participant’s death, Disability or termination of service, or upon a Change of Control, and (B) Awards of Options, SARs, Restricted Stock Units and Restricted Stock granted after April 29, 2015, that result in the issuance of an aggregate of up to five percent (5%) of the Shares that may be authorized for grant under Section 3(a) of the Plan (as such authorized number of Shares may be adjusted as provided under the terms of the Plan) may be granted to any one or more Participants without respect to such minimum vesting provision. The vesting schedule shall be set forth in the Award Agreement. |
(ii) | An Award may not be exercised for a fraction of a Share. An Award shall be deemed exercised when the Company receives written or electronic notice of exercise (in accordance with the Award Documentation) from the person entitled to exercise the Award. The Participant must remit to the Company full payment for the Shares with respect to which the Award is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Documentation and the Plan. Shares issued upon exercise of an Award shall be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and Participant’s spouse, or after the death of the Participant in the name of the Participant’s beneficiaries or heirs or as directed by the executor of Participant’s estate under Applicable Laws. |
(iii) | Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Awarded Stock, notwithstanding the exercise of the Award. The Company shall issue (or cause to be issued) such Shares promptly after the Award is exercised or vests. No adjustment of an Award will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15(a) of the Plan or specified in such Award’s Award Documentation. |
(iv) | Exercising an Award in any manner that results in the issuance of Shares shall decrease the number of Shares thereafter available, both for purposes of the Plan and for issuance under the Award, by the number of Shares as to which the Award is exercised. |
(c) | Misconduct. If a Participant is determined by the Administrator to have committed Misconduct then, unless otherwise provided in a Participant’s agreement for services as a Service Provider, neither the Participant, the Participant’s estate nor such other person who may then hold any Award granted to the Participant shall be entitled to exercise any such Award with respect to any Shares, after termination of status as a Service Provider, whether or not the Participant may receive from the Company (or Affiliate) payment for: vacation pay, services rendered prior to termination, services rendered for the day on which termination occurs, salary in lieu of notice, or any other benefits. In making such determination, the Administrator shall give the Participant an opportunity to present evidence to the Administrator. Unless otherwise provided in a Participant’s agreement for services as a Service Provider, termination of status as a Service Provider shall be deemed to occur on the date when the Company (or Affiliate) dispatches notice or advice to the Participant that status as a Service Provider is terminated. |
(d) | Annual Award Limits. |
(i) | Except in connection with his or her initial service, no Service Provider shall be granted, in any calendar year, Awards covering in the aggregate more than 10,000,000 Shares. |
(ii) | In connection with his or her initial service, a Service Provider may be granted Awards covering in the aggregate up to 15,000,000 Shares in the first twelve (12) months of such Service Provider’s service, rather than the limit set forth in subsection (i) above. |
(iii) | The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15(a). |
(iv) | If an Award is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 15(b)), the cancelled Award will be counted against the limits set forth in subsections (i) and (ii) above. |
(e) | Tax Withholding. |
(i) | Where, in the opinion of counsel to the Company, the Company has or will have an obligation to withhold foreign, federal, state or local taxes relating to the exercise of any Award, the Administrator may in its discretion require that such tax obligation be satisfied in a manner satisfactory to the Company. With respect to the exercise of an Award, the Company may require the payment of such taxes before Shares deliverable pursuant to such exercise are transferred to the holder of the Award. |
(ii) | With respect to the exercise of an Award, a Participant may elect (a “Withholding Election”) to pay the minimum statutory withholding tax obligation by the withholding of Shares from the total number of Shares deliverable pursuant to the exercise of such Award, or by delivering to the Company a sufficient number of previously acquired shares of Common Stock, and may elect to have additional taxes paid by the delivery of previously acquired shares of Common Stock, in each case in accordance with rules and procedures established by the Administrator. Previously owned shares of Common Stock delivered in payment for such additional taxes may be subject to conditions as the Administrator may require. The value of each Share withheld, or share of Common Stock delivered, shall be the Fair Market Value per share of Elections are subject to the approval of the Administrator and must be made in compliance with rules and procedures established by the Administrator. |
(f) | Dividends and Dividend Equivalents. The Administrator may provide that any Award (other than Options and Stock Appreciation Rights) that relates to shares of Common Stock shall earn dividends or dividend equivalents; provided that, notwithstanding anything in the Plan to the contrary, the Administrator may not provide for the current payment of dividends or dividend equivalents with respect to any shares of Common Stock subject to an outstanding Award (or portion thereof) that has not vested. For any such Award, the Committee may provide only for the accrual of dividends or dividend equivalents that will not be payable to the Participant unless and until, and only to the extent that, the Award vests. No dividends or dividend equivalents shall be paid on Options or Stock Appreciation Rights. |
(a) | Term of Options. The term of each Option shall be not greater than ten (10) years from the date it was granted. |
(b) | Option Exercise Price and Consideration. |
(i) | Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following: |
(1) | In the case of an ISO granted to any Employee who, at the time the ISO is granted owns stock representing more than ten percent (10%) of the voting power of all classes of |
(2) | In the case of an ISO granted to any Employee other than an Employee described in subsection (ii) immediately above, the per Share price shall be no less than 100% of the Fair Market Value per Share on the date of the grant. |
(3) | In the case of a NSO, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. |
(4) | The exercise price for the Shares to be issued pursuant to an already granted Option may not be changed without the consent of the Company’s stockholders. This shall include, without limitation, a repricing of the Option as well as an option exchange program whereby the Participant agrees to cancel an existing Option in exchange for an Option, SAR or other Award. |
(ii) | Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration, to the extent permitted by Applicable Laws, may consist entirely of: |
(1) | Check; |
(2) | other Shares which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; |
(3) | broker-assisted cashless exercise; or |
(4) | any combination of the foregoing methods of payment; or |
(5) | such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. |
(c) | Termination of Relationship as Service Provider. When a Participant’s status as a Service Provider terminates, other than from Misconduct, death or Disability, the Participant’s Option may be exercise within the period of time specified in the Option Agreement to the extent that the Option is vested on the date of termination or such longer period of time determined by the Administrator (which may so specify after the date of the termination but before expiration of the Option) not to exceed five (5) years (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified period of time in the Plan or the Award Documentation, the Option shall remain exercisable for three (3) months following the date Participant ceased to be a Service Provider. If, on the date of termination, such Participant’s Option is not fully vested, then the unvested Shares shall revert to the Plan. If, after termination, the Participant’s Option is not fully exercised within the time specified, then the unexercised Shares covered by such Option shall revert to the Plan and such Option shall terminate. |
(d) | Death or Disability of Participant. If a Participant’s status as a Service Provider terminates from death or Disability, then the Participant or the Participant’s estate, or such other person as may hold the Option, as the case may be, shall have the right for a period of twelve (12) months following the date of death or termination of status as a Service Provider for Disability, or for such other period as the Administrator may fix, to exercise the Option to the extent the Participant was entitled to exercise such Option on the date of death or termination of status as a Service Provider for Disability, or to such extent as may otherwise be specified by the Administrator (which may so specify after the date of death or Disability but before expiration of the Option), provided the actual date of exercise is in no event after the expiration of the term of the Option. A Participant’s estate shall mean his legal representative or any person who acquires the right to exercise an Option by reason of the Participant’s death or Disability. |
(e) | Events Not Deemed Terminations. Unless otherwise provided in a Participant’s agreement for services as a Service Provider, such Participant’s status as a Service Provider shall not be considered |
(f) | ISO Rules. The Option Agreement for each ISO shall contain a statement that the Option it documents is an ISO. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which all ISOs held by a Participant are exercisable for the first time by such Participant during any calendar year exceeds $100,000, such excess Shares shall be treated as Shares subject to an NSO. For purposes of this Section 8(f), ISOs shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares subject to an ISO shall be determined as of the time the ISO with respect to such Shares is granted. |
(g) | Buyout Provisions. Subject to Section 8(b)(i)(4), the Administrator may offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time that such offer is made; provided that the Administrator shall not make such offer without the consent of the Company’s stockholders with respect to an Option with a per share exercise price that is greater than Fair Market Value on the date of such offer. |
(a) | Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Service Providers discretion. The Administrator shall have complete discretion to determine the number of SARs granted to any Participant. |
(b) | Exercise Price and other Terms. The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, that no SAR may have a term of more than ten (10) years from the date of grant. In the case of an SAR, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. The exercise price for the Shares or cash to be issued pursuant to an already granted SAR may not be changed without the consent of the Company’s stockholders. This shall include, without limitation, a repricing of the SAR as well as an SAR exchange program whereby the Participant agrees to cancel an existing SAR in exchange for an Option, SAR or other Award. |
(c) | Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: |
(i) | the difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times |
(ii) | the number of Shares with respect to which the SAR is exercised. |
(d) | Payment upon Exercise of SAR. At the discretion of the Administrator, payment for an SAR may be in cash, Shares or a combination thereof. |
(e) | SAR Agreement. Each SAR grant shall be evidenced by Award Documentation (a “SAR Agreement”) that shall specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, shall determine. |
(f) | Expiration of SARs. An SAR granted under the Plan shall expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Documentation. |
(g) | Termination of Relationship as Service Provider. When a Participant’s status as a Service Provider terminates, other than from Misconduct, death or Disability, the Participant’s SAR may be exercised within the period of time specified in the SAR Agreement to the extent that the SAR is vested on the date of termination or such longer period of time determined by the Administrator (which may so specify after the date of the termination but before expiration of the SAR) not to exceed five (5) years (but in no event later than the expiration of the term of such SAR as set forth in the SAR Agreement). In the absence of a specified period of time in the Plan or the SAR Agreement, the SAR shall remain exercisable for three (3) months following the date Participant ceased to be a Service Provider. If, on the date of termination, such Participant’s SAR is not fully vested, then the unvested Shares shall revert to the Plan. If, after termination, the Participant’s SAR is not fully exercised within the time specified, then the unexercised Shares covered by such SAR shall revert to the Plan and such SAR shall terminate. |
(h) | Death or Disability of Participant. If a Participant’s status as a Service Provider terminates from death or Disability, then the Participant or the Participant’s estate, or such other person as may hold the SAR, as the case may be, shall have the right for a period of twelve (12) months following the date of death or termination of status as a Service Provider for Disability, or for such other period as the Administrator may fix, to exercise the SAR to the extent the Participant was entitled to exercise such SAR on the date of death or termination of status as a Service Provider for Disability, or to such extent as may otherwise be specified by the Administrator (which may so specify after the date of death or Disability but before expiration of the SAR), provided the actual date of exercise is in no event after the expiration of the term of the SAR. A Participant’s estate shall mean his legal representative or any person who acquires the right to exercise an SAR by reason of the Participant’s death or Disability. |
(i) | Events Not Deemed Terminations. Unless otherwise provided in a Participant’s agreement for |
(j) | Buyout Provisions. Subject to Section 9(b), the Administrator may offer to buy out for a payment in cash or Shares an SAR previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time that such offer is made; provided that the Administrator shall not make such offer without the consent of the Company’s stockholders with respect to an SAR with a per share exercise price that is greater than Fair Market Value on the date of such offer. |
(a) | Grant of Restricted Stock. Subject to the terms and conditions of the Plan, Restricted Stock may be granted to Service Providers at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine (i) the number of Shares subject to a Restricted Stock Award granted to any Participant, and (ii) the conditions that must be satisfied, the vesting of which typically will be based on continued provision of services and/or satisfaction of Performance Goals. Once the Shares are issued, voting, dividend and other rights as a stockholder shall exist with respect to Restricted Stock. |
(b) | Other Terms. The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions, including the purchase price, if any, of Restricted Stock granted under the Plan. Restricted Stock grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the Restricted Stock is granted. Any certificates representing the Restricted Stock shall bear such legends as shall be determined by the Administrator. |
(c) | Restricted Stock Award Documentation. Each Restricted Stock grant shall be evidenced by Award Documentation (a “Restricted Stock Award Documentation”) that shall specify the purchase price (if any) and such other terms conditions, and restrictions as the Administrator, in its sole discretion, shall determine. |
(a) | Grant of Restricted Stock Units. Subject to the terms and conditions of the Plan, Restricted Stock Units may be granted to Service Providers at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine (i) the number of Shares subject to each Restricted Stock Units Award, and (ii) the conditions that must be satisfied, the vesting of which typically will be based on continued provision of services and/or satisfaction of Performance Goals. Until the Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Restricted Stock Units. |
(b) | Other Terms. The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions, including the purchase price, if any, of Restricted Stock Units granted under the Plan. Restricted Stock Units Awards shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the Restricted Stock Units Award is granted. Restricted Stock Units shall be denominated in units with each unit equivalent to one Share for purposes of determining the number of Shares subject to any Restricted Stock Units Award. |
(c) | Restricted Stock Units Agreement. Each Restricted Stock Units grant shall be evidenced by Award Documentation (a “Restricted Stock Units Agreement”) that shall specify the purchase price, if any, and such other terms conditions, and restrictions as the Administrator, in its sole discretion, shall determine. Each Restricted Stock Units Agreement shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. A Restricted Stock Units Agreement may provide for dividend equivalent units. |
(d) | Settlement. Settlement of vested Restricted Stock Units may be made in the form of (i) cash, (ii) Shares or (iii) any combination, as determined by the Administrator and may be settled in a lump sum or in installments. Distribution to a Participant of an amount (or amounts) from settlement of vested Restricted Stock Units may be deferred to a date after settlement as determined by the Administrator and in such manner as shall comply with Section 409A of the Code. The amount of a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment pursuant to the Plan. Notwithstanding the foregoing, settlement of vested Restricted Stock Units held by Participants who are residents of Canada or employed in Canada may be made only in the form of Shares. |
(a) | Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Award, the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, in each case as set forth in Section 3, as well as the price per share of Common Stock covered by each such outstanding Award and the annual award limits under Section 6(d) shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Compensation Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. |
(b) | Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Award until ten (10) days prior to such transaction as to all of the Awarded Stock covered thereby, including Shares as to which the Award would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse 100%, and that any Award vesting shall accelerate 100%, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised or vested an Award will terminate immediately prior to the consummation of such proposed action. |
(c) | Merger or Asset Sale. In the event of a merger of the Company with or into another corporation (as such merger is described in Section 2(h) herein), or the sale of substantially all of the assets of the Company (as such sale is described in Section 2(h) herein), each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or related corporation. In the event that the successor corporation refuses to assume or substitute for the Award, the Participant shall fully vest in and have the right to fully exercise the Awards and all forfeiture restrictions on any or all of such Awards shall lapse, including Shares as to which it would not otherwise be vested or exercisable. If an Award becomes fully vested and exercisable in lieu of assumption or substitution in the event of such a merger or sale of assets, the Administrator shall notify the Participant in writing or electronically that the Award shall be fully vested and exercisable for a period |
(d) | Change of Control. Unless otherwise provided in a Participant’s agreement for services as an employee of the Company, if, within one year after a Change of Control has occurred, such Participant’s status as an employee of the Company is terminated by the Company (including for this purpose any successor to the Company due to such Change of Control and any employer that is an Affiliate of such successor) for any reason other than for Misconduct or, if applicable, terminated by such Participant as a Constructive Termination, then all Awards held by such Participant shall become fully vested for exercise upon the date of termination of such status, irrespective of the vesting provisions of such Participant’s Award Documentations. |
(e) | Other Terms. |
(i) | The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan. |
(i) | With respect to a Grandfathered Qualified Performance-Based Award, no adjustment or action described in this Section 15 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as “performance-based compensation” (within the meaning of Prior Section 162(m) of the Code), unless the Administrator determines that the Award should not so qualify. No adjustment or action described in this Section 15 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16(b) or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions. |
(ii) | The existence of the Plan, the Award Documentation and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
(iii) | No action shall be taken under this Section 15 which shall cause an Award to fail to comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such Award. |
(a) | Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. |
(b) | Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws and shall obtain stockholder approval for any amendment to the Plan to increase the number of shares available under the Plan, to change the class of employees eligible to participate in the Plan, to permit the Administrator to grant Options and SARs with an exercise price that is below Fair Market Value on the date of grant, to permit the Administrator to extend the exercise period for an Option or SAR beyond ten years from the date of grant, or to provide for additional material benefits under the Plan. |
(c) | Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. |
(a) | Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of the Award or the issuance and delivery of such Shares (or the cash equivalent thereof) shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under Applicable Laws. The Company will be under no obligation to register the Shares with the United States Securities and Exchange Commission or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so. |
(b) | Investment Representations. As a condition to the exercise or receipt of an Award, the Company may require the person exercising or receiving such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. |
Date: October 30, 2019 | ||
/s/Lisa T. Su | ||
Lisa T. Su President and Chief Executive Officer (Principal Executive Officer) | ||
Date: October 30, 2019 | ||
/s/Devinder Kumar | ||
Devinder Kumar Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | ||
(i.) | the Quarterly Report on Form 10-Q of the Company for the period ended September 28, 2019 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii.) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: October 30, 2019 | ||
/s/Lisa T. Su | ||
Lisa T. Su President and Chief Executive Officer (Principal Executive Officer) | ||
(i.) | the Quarterly Report on Form 10-Q of the Company for the period ended September 28, 2019 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii.) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: October 30, 2019 | ||
/s/Devinder Kumar | ||
Devinder Kumar Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | ||
Supplemental Balance Sheet Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, net
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, net
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Unearned Revenue | Changes in unearned revenue were as follows:
|
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:
|
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 |
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 |
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
Property and Equipment, net
Other Assets
Accrued Liabilities
Other Current Liabilities
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:
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 $220 million in the next 12 months. The revenue allocated to remaining performance obligations did not include amounts which have an original contractual expected duration of less than one year.
|
GLOBALFOUNDRIES (Details) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
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 |
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:
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:
(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 contingent loss accrual on a legal matter.
|
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 $18 million as of September 28, 2019 and December 29, 2018, respectively, included in Prepayments and receivables-related parties on its condensed consolidated balance sheets. In June 2019, the U.S. Commerce Department’s Bureau of Industry and Security added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation.
|
Accumulated Other Comprehensive Income (Loss) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The tables below summarize the changes in accumulated other comprehensive income (loss) by component:
|
Debt, Secured Revolving Facility and Secured Revolving Line of Credit (Interest Expense Recognized) (Details) - 2.125% Convertible Senior Notes due 2026 - USD ($) $ 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 |
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.
|
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:
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.
|
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 $36 million, respectively. The Company's finance leases and short-term leases are immaterial.
Future minimum lease payments under non-cancellable operating lease liabilities are as follows:
|
0%M?)[T;T9&:_ ^0J* G86W7&-
M>1$TOB ;2?8; KNK)%N8["H)65V<
M!-/&)VM1I0<5VV457;KBGL:+?X=/+?6-F98KB\[:^><3+[G1VH&WDMQX+YWO
MXF4AH'%A>NOG9GK+T\+I?FY3LOPKRK]02P,$% @ '8)>3SN)O6/Y 0
MT@4 !D !X;"]W;W)K.+TR'UOJN",K8AW7KSUWFO)$YZS:R!:
M8DYS#-_$I&L$\^QK"KZ7XL3_@_-]^&%7X2'"#W\I/.P39+L$623(WBQQ+R;[
M)PG;]%2#:>,T65+AV,=)WGC7@;WG\4W^A,_3_D685O:67-#YEXW];Q =>"G)
MC1^ASG^PU5#0N'!\[\]F'K/9<#@L/XBMW[C\#5!+ P04 " =@EY/XGZH
MP;4! #2 P &0 'AL+W=O?<#R[9H,V+;0$<>I5"V1RWSG5'
M0FS9@F3V1G>@_$VMC63.FZ8AMC/ JDB2@M DV1/)N,)%%GUG4V2Z=X(K.!MD
M>RF9>3N!T$..-_C=\
INR\RD>1S"?FRC!$O8L0+
M&*L)1J>)1GO$$XJY(OR$(EFD2!8H)O_.+ID?Q@0TGTM(/,% HTO%09Y=_U%>
M(2ZUZWVCZ-#B'K&[E!_RKC_^H/)RX:&G_V'U!+ P04 " =@EY/S!-T'J8! "] P
M&0 'AL+W=O NT 4\!VE(=1_5V1QBE=D&/NEUC3LCWV:!#9_CJLCC6SB/55%5*6<%
MHJY0!ZONRVP\(IDT$.?![^[01(:I;]L/("2OJ4UV7GXT];A ;F($STBWV@^3)ZB#.?$H%R
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MP!^B@&GS"LX:?JN*+)W3P1,/P:U52&8?5@ESX@INZH_79]'^WH'
6C*9WR >[C2O^8J601%0@>2(5'A(.E[%1W@.S +;4'_%)7
M6$:+)%(8ZRH!KOR =]';>"8I7TI@=;ZFCC,Z+2 TJ!57W"+U?97I(YIOT.T/
MQO^"492Z1MAUDN,!<.[ZV09E]\$$)4M+U? L-!(/OG?4,TQ$*JXX!+]MOKF:
M;U\]2I^+K=C^B&L4DOO!+(PENDDW^DOQB-::3B2%/!2FU49X4M71\,NEI+6G
MI>2;*1%#)Z6B8*K#@0#&9 /"88L9HP_SOB+7?@2.1Z-!TG*V66+TI4^;"P$#=[-$^VYXQX9@G(M6^/@;<
MHRFOE:IDZ( %JMRFV?G6:X#X.^?H U;U,"6*EC:/GX#GJ;3\HM36:$!/9$L&
M"HKR8+9ASW[$'2M0VC-D8VA/(7J+#W@P0^$>+CFX[42CC%IZA<4
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M-I-A?Y7#LR0UTH#,O0%(YT(E"R..DXQ4!BZ9^ QADH3$6E#E3'6
4"&GX_J[ZK:N[U@W4I_9Q5>Q=^T6@'X50-Y0K8A6
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MA-,Z:%&'J$7NE8F*@]ILB4BC.$JKW%8;=[4+D-7ZUEC\EDU+X
YN:[W:I[VV/5@/72^8-\M&;\[US2A!5,M
MHCB/YRF 0>>-("#8QZ[K7CK?67[VCM.@YM81/V,K[B)&@S5*KWRCLH/,+K>G
MBFE0148C*+M56I3S%!8A:5@$+8I,ZC3'
ZY[G,&]?)D4JRPQX1_*LG1]G^1_A_\[$4W=C=Y0
M>Q9M0F40:DG)=?N7OGJ=SX=@$))*/M#[$TCR=")>4
M8S$^)$)VQ+6G4ID'5F-QU%-MD<$"]MY@TK>?\X%ORGM8MEP.EHUN-VG&H4II
M+EGO3616;X<[[-G) 8;\+ ,#N7WC54J]RPB3.Q1P528FS2RN$VQ'DFW17LY!
M_G-OBKG;&A83T?2Y8E/VO-#M.P/;:FJ:R:UR,<56U8_D,+S;)W$'N$Q0Z\[X
M*]E,5(L,Z@VF,;]]?J-K=Z./5"/6VIS#"^P;1-T>,3. 5&RW./&,/+JK9)XF
M3DL,!))U-AI>.N KE"YC+372DB;ZA#EA_S7S+2:X,@W4-=B/DKII(O'3MI<
M;1S]9M.(7(\.*2_SWJFU6\48U5 2/.X?>9$@%X1R)A(P&YO%&'#XGJ8%6EJI*6'BH-J-
M<&1?>EQ>E;_-2A@6//=:KM5KNE;/+4:S?T,-U#RGQCE<+?FZ*$F)9:B.!Y3@8M1]'-1?I)RE.3PGHY'T1#^?XMM:3'XZ*[ XD7]
MXSY\K(H[I?5U4-_7$=9 .AJ-?0,
?LW_*KM3K4$IA,CJNQP,%BRPW:G/>]NM<5$,ZT;@N9=
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MYV.]L8ETN0:YXG@:'1]-R4 VCHZGD^B-)-0N3&8TU93+N
XP,AS?,H3'"W?XN#/
M22_#IWE-[(!Z\01U/]TP#9D'B4N;&/2+3^-"BOT]L(!A)AS0AK $WQ!&UXK:
MK()PRK8>GED@DTPJI,WFF\J119I''XZ\9\^EY^%42.5J^PK^N^ZG'P0&SPJD
MC(T"9]@#:5P3K4&)6^.XR0[\)81Z>[6MC<)2D6TT6^ IP0VFR%JJ'-18)L(#
ME,8,"BM'T;*RHY9U8(-:2VZ,G))2"N(T#!F]86@S8.S>7MIOQ1YW5R _QQY)
MB)%5,9AFU;TYG5KH).^R>>Y=VO H7E33C=0?6[,
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:
The 2.125% Notes consisted of the following:
(2) Included in the consolidated balance sheets within additional paid-in capital, net of $8 million of equity issuance costs.
|
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:
(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 $12 million contingent loss accrual on a legal matter.
|
Income Taxes (Details) - USD ($) $ 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 |
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 stockholders' 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.
|
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:
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:
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:
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.
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.
|
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 $4 million of foreign income taxes in profitable locations. As of September 28, 2019, substantially all of the Company’s U.S. and Canadian deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, as of September 28, 2019, in management’s estimate, is not more likely than not to be achieved.
|
1P4XQ6G 'QFB6URX%3_MUMH2Q'VLD;O-Q;+*(S6_69\H^36]NPQKY]T6F%HOLJ ?C6+F$
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M*K0%R&G&^HP7K>2YZXP 9QU7.0^UUW5 0-NE5%",XO"(A%SJ6TI&W="C]LK
MUY+>*IU4J(?4VV+#*!UQ8R+!,,H/K;S+-T$.)[UL+YY-J/4&2.5@D="Y^,
M=3N9+.G5^]KD^$EEW>3M(M*;?W4R62.
)#V5=61_@<1;*L)@"9EWP-*X
M)4#\5D*)K.7UAX&S1X&CYP7:4%+> 2*C/B;P0D+]\"&-EW.N/4K;KQ].G!FH
M7DD"M<-6.2Z\@X!$FT[C$CJ!89^QHF>E_FC*A%/$:@NQOJR6[P78-OYDT/B1
M4HE&A')K&?/*<^H!DE"50##IEI? X=(8@$@.Z'(:8
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M_^3\X7PDJ^T68!H'.
?:Y1ZIU$[D/5]_OQ#6FR6-4.?-._J @5J"19A
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MP&
:DL5JP+4%I';9P#^JPUOB#V
MSUONMYJ)"SBOHT5Y)67S+X_M340) S'Q;^R,K;#03!$$0D\6V7A,R2F 8T&M;O
M0!^$4CT>I0BF>SK-;(A2ET;-,,&NC'&O)+LP1Y-&>TDS]UO> AV%NF,:)LX@
M\^ &1LDE!]K<%2/1)8R5@].;GEI[C=;O7*75R)QYFZ2@>2,8TVW_,LBFO52%
MV9=6CG]XO>89?[6?UO^8U<-=;G;(PB0DP+&-801(XF%*/1@Y;H)C& H=>:@G
MDF'6]>*LO;HKZZ/L?>H3S12#W'P^RJ'M30O36U89%MYNB^_-';*L6VF1,MOD
MM<4GVRYVR>2HB2.(TV/^,L"FJ2R%B==3#F)_WWW-M]ML<[ V:5BL@N+ LR,_
M2#!V/0?2)+:;@!Z CAM)'>LU(8QA?/7*K+3_",N]1CF&3?%2#& SV2A'K\'!
M U575J=K7C:=]F<$3!I,70:5=!2DT/["R:YEX]L+B_)YG\<-! PP#B,'48I!
MG$ ?.&&(^H@0V5+'YDR)8YA(O;2WW[.JJQ\RJI5 &T4
MV1 AQZ$A!2'[7SQ0T'%#)2:IAS.,)B;,NN^5*7)I@I>2>)K'1D5*75G *8<,B9_.#^
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MBF:-5S/$1D5_DO*96FYFR^6KN*'N ;P+*OX;*B_J6@@UT6I-(Q$T&J_:.^0J<")3>]5FE+O*:S=3&6NV
M@F/JJ<65G AM=S;#@[%RS92>;EVHX]CU2PA>_S[5J>RLHWR]L%CF-(?1K
MD'&..,YXU!]0Q!,_4[Z^1>]3' 60>LJ'9IA'
MF!@DW6TEHU"B9: N3%QY-PXG2K;9!\J)&4I(,3%O;E QRN$L5LP=T9@Q$=%V
MR\V[[3K_\?_DCXL4I6$<^-@/@RQ*&")!YO=Q*(DUS_72_?2)YD5:5:"1!80N
M[8D07=.4YSX<^F4VW:%LE<7YC: Y 7'"*(MH3!/"13>4ARCD.*4Q5YT9MAW6X5I7K[3MU9Q(!*U&\&>O Y5U![^$1
M8E>4[58M;^6\D5H+":;"$ZV\BH@ZLCJM18C3K)3 A^?@61XXNDGK>1A/==QX
M&-H=W)%+J?^*R=6H.-T;*"DD>[0TKA9OUCSIDQW-KL9EM/3KI($YJ)U XQXZ
MI6NS<2GR7 C"D%+:08&H]M%^J\/[UO%X)D04ZJ\/@^E@,B^*V654D([?_T<]
M0&HT%*1'S@+@J('.LL4.DE>(0$ [#5SI8JO4$E\V7#AH30F=3A V;?#&/]P\
M 9A#V%EG(-#4,2RQA?$/@+%$TM9R[K:#Q^)YYZ>]WW9K=G>%X"T5<5,.F7?
MTA1E$->D2D)K0J
_5#^B;L0ZTG<8WJ2Y43J<;-TDHF=?F]-*R=WT%&SED3JMW
M$YJC?,<%M*%O"I)6=_T2V?C'0[:KLE8/7XL& NQX=N![48@!<9VA>4RHT,E*
MYE68;JQ:F?U7R0^R9$KWJ_RS5JNF9DM7S2BW8A>H%'V-VG%5,91R_?M] ET)
M-+5RNJIJ :@QK?KKUY<'*JDR<[K L%61B8UY
M'N>XL0\B'"0(0Z>/C!-?:LQ*1SS#-./*^(: AU:;(L^F^"D)M)FL5"9:;VBG
M<"E,.VV;"-0TF+XPJNDHT2FL:7-+FFM)OLNKNVSSMZ+8O(CL1AC!P+;]P X9
M3EUL)U$?&<2NT*IFG?',SSXVRJQO7)HBUJ;8*8FUF9Q4QMK@9R-P*50[[9H(
MU31XOC"JZ2C1*:II
0';1GG\81-C:*B"=J97P],JJ2P"OQ2;+LO
MS[_I#KO?)CKO0ECL=B7P$$L>'
_EM.;WQ
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MC'0OAO&'66Q]F,:"'HS3S/CYMBCF^Z2HWT 7G?TXF$8L;XMY!'"8[6HN(NRLUT*G%?NG?
MRM%D_O>XFXJLWMNC[35:Z4Y-->ZMF-\Y/YI$RVLT&+^;S.;3A4=S7[=V56FG
M0\F@2O\F0+X.QNFC.&']/IC^$>&(W%E,7:-YW!?ZP6CZ]\'XH?B]&,PB8(OJ
M]=!N_XO; >>O@]$DN