(State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
EXHIBIT INDEX | |||||||||||
Exhibit No. | Description | ||||||||||
99.1 | |||||||||||
99.2 | |||||||||||
104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
Date: January 26, 2021 | ADVANCED MICRO DEVICES, INC. | ||||||||||
By: | /s/ Devinder Kumar | ||||||||||
Name: | Devinder Kumar | ||||||||||
Title: | Executive Vice President, Chief Financial Officer & Treasurer |
Q4 2020 | Q4 2019 | Y/Y | Q3 2020 | Q/Q | |||||||||||||
Revenue ($M) | $3,244 | $2,127 | Up 53% | $2,801 | Up 16% | ||||||||||||
Gross profit ($M) | $1,451 | $949 | Up 53% | $1,230 | Up 18% | ||||||||||||
Gross margin | 45% | 45% | Flat | 44% | Up 1pp | ||||||||||||
Operating expenses ($M) | $881 | $601 | Up 47% | $781 | Up 13% | ||||||||||||
Operating income ($M) | $570 | $348 | Up 64% | $449 | Up 27% | ||||||||||||
Tax Valuation Allowance Release Benefit ($M) | $1,301 | - | - | - | - | ||||||||||||
Net income ($M) | $1,781 | $170 | Up 948% | $390 | Up 357% | ||||||||||||
Earnings per share | $1.45 | $0.15 | Up 867% | $0.32 | Up 353% |
Q4 2020 | Q4 2019 | Y/Y | Q3 2020 | Q/Q | |||||||||||||
Revenue ($M) | $3,244 | $2,127 | Up 53% | $2,801 | Up 16% | ||||||||||||
Gross profit ($M) | $1,452 | $950 | Up 53% | $1,231 | Up 18% | ||||||||||||
Gross margin | 45% | 45% | Flat | 44% | Up 1pp | ||||||||||||
Operating expenses ($M) | $789 | $545 | Up 45% | $706 | Up 12% | ||||||||||||
Operating income ($M) | $663 | $405 | Up 64% | $525 | Up 26% | ||||||||||||
Net income ($M) | $636 | $383 | Up 66% | $501 | Up 27% | ||||||||||||
Earnings per share | $0.52 | $0.32 | Up 63% | $0.41 | Up 27% |
GAAP | Non-GAAP(*) | |||||||||||||||||||
2020 | 2019 | Y/Y | 2020 | 2019 | Y/Y | |||||||||||||||
Revenue ($M) | $9,763 | $6,731 | Up 45% | $9,763 | $6,731 | Up 45% | ||||||||||||||
Gross profit ($M) | $4,347 | $2,868 | Up 52% | $4,353 | $2,874 | Up 51% | ||||||||||||||
Gross margin | 45% | 43% | Up 2pp | 45% | 43% | Up 2pp | ||||||||||||||
Operating expenses ($M) | $2,978 | $2,297 | Up 30% | $2,696 | $2,094 | Up 29% | ||||||||||||||
Operating income ($M) | $1,369 | $631 | Up 117% | $1,657 | $840 | Up 97% | ||||||||||||||
Tax Valuation Allowance Release Benefit ($M) | $1,301 | - | - | - | - | - | ||||||||||||||
Net income ($M) | $2,490 | $341 | Up 630% | $1,575 | $756 | Up 108% | ||||||||||||||
Earnings per share | $2.06 | $0.30 | Up 587% | $1.29 | $0.64 | Up 102% |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||||||||
(In millions, except per share data) (Unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
GAAP gross profit | $ | 1,451 | $ | 1,230 | $ | 949 | $ | 4,347 | $ | 2,868 | ||||||||||||||||||||||
GAAP gross margin % | 45 | % | 44 | % | 45 | % | 45 | % | 43 | % | ||||||||||||||||||||||
Stock-based compensation | 1 | 1 | 1 | 6 | 6 | |||||||||||||||||||||||||||
Non-GAAP gross profit | $ | 1,452 | $ | 1,231 | $ | 950 | $ | 4,353 | $ | 2,874 | ||||||||||||||||||||||
Non-GAAP gross margin % | 45 | % | 44 | % | 45 | % | 45 | % | 43 | % | ||||||||||||||||||||||
GAAP operating expenses | $ | 881 | $ | 781 | $ | 601 | $ | 2,978 | $ | 2,297 | ||||||||||||||||||||||
GAAP operating expenses/revenue % | 27 | % | 28 | % | 28 | % | 31 | % | 34 | % | ||||||||||||||||||||||
Stock-based compensation | 78 | 75 | 56 | 268 | 191 | |||||||||||||||||||||||||||
Loss contingency on legal matter | — | — | — | — | 12 | |||||||||||||||||||||||||||
Acquisition-related costs | 14 | — | — | 14 | — | |||||||||||||||||||||||||||
Non-GAAP operating expenses | $ | 789 | $ | 706 | $ | 545 | $ | 2,696 | $ | 2,094 | ||||||||||||||||||||||
Non-GAAP operating expenses/revenue% | 24 | % | 25 | % | 26 | % | 28 | % | 31 | % | ||||||||||||||||||||||
GAAP operating income | $ | 570 | $ | 449 | $ | 348 | $ | 1,369 | $ | 631 | ||||||||||||||||||||||
GAAP operating margin % | 18 | % | 16 | % | 16 | % | 14 | % | 9 | % | ||||||||||||||||||||||
Stock-based compensation | 79 | 76 | 57 | 274 | 197 | |||||||||||||||||||||||||||
Loss contingency on legal matter | — | — | — | — | 12 | |||||||||||||||||||||||||||
Acquisition-related costs | 14 | — | — | 14 | — | |||||||||||||||||||||||||||
Non-GAAP operating income | $ | 663 | $ | 525 | $ | 405 | $ | 1,657 | $ | 840 | ||||||||||||||||||||||
Non-GAAP operating margin % | 20 | % | 19 | % | 19 | % | 17 | % | 12 | % |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP net income / earnings per share | $ | 1,781 | $ | 1.45 | $ | 390 | $ | 0.32 | $ | 170 | $ | 0.15 | $ | 2,490 | $ | 2.06 | $ | 341 | $ | 0.30 | ||||||||||||||||||||||||||||||||||||||||||
Loss on debt redemption/conversion | 16 | 0.01 | 38 | 0.03 | 128 | 0.10 | 54 | 0.04 | 176 | 0.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash interest expense related to convertible debt | — | — | 2 | — | 4 | — | 6 | — | 22 | 0.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 79 | 0.06 | 76 | 0.06 | 57 | 0.05 | 274 | 0.22 | 197 | 0.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity income in investee | (3) | — | (1) | — | — | — | (5) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss contingency on legal matter | — | — | — | — | — | — | — | — | 12 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition-related costs | 14 | 0.01 | — | — | — | — | 14 | 0.01 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Release of valuation allowance on deferred tax assets | (1,301) | (1.06) | — | — | — | — | (1,301) | (1.07) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | 50 | 0.05 | (4) | — | 24 | 0.02 | 43 | 0.03 | 8 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP net income / earnings per share | $ | 636 | $ | 0.52 | $ | 501 | $ | 0.41 | $ | 383 | $ | 0.32 | $ | 1,575 | $ | 1.29 | $ | 756 | $ | 0.64 | ||||||||||||||||||||||||||||||||||||||||||
Shares used and net income adjustment in earnings per share calculation (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares used in per share calculation (GAAP) | 1,226 | 1,215 | 1,188 | 1,207 | 1,120 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense add-back to GAAP net income | $ | — | $ | 1 | $ | 4 | $ | 1 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares used in per share calculation (Non-GAAP) | 1,232 | 1,230 | 1,216 | 1,228 | 1,209 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense add-back to Non-GAAP net income | $ | — | $ | 1 | $ | 2 | $ | 4 | $ | 16 |
(1) | For the three months ended December 26, 2020, September 26, 2020 and December 28, 2019, GAAP diluted EPS calculations include 3 million, 11 million and 31 million shares, respectively, related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $0 million, $1 million and $4 million interest expense, respectively, add-back to net income under the "if converted" method. For the year ended December 26, 2020, GAAP diluted EPS calculations include 3 million shares related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $1 million interest expense add-back to net income under the "if converted" method. For the year ended December 28, 2019, 89 million shares related to the assumed conversion of the Company's 2026 Convertible Notes were not included in the GAAP diluted EPS calculations as their inclusion would have been anti-dilutive. For the three months ended December 26, 2020, September 26, 2020 and December 28, 2019, Non-GAAP diluted EPS calculations include 9 million, 26 million and 59 million shares, respectively, related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $0 million, $1 million and $2 million interest expense, respectively, add-back to net income under the "if converted" method. For the year ended December 26, 2020 and December 28, 2019, Non-GAAP diluted EPS calculations include 24 million and 89 million shares, respectively, related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $4 million and $16 million interest expense, respectively, add-back to net income under the "if converted" method. |
(*) | In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For full year 2020, AMD uses a non-GAAP tax rate of 3%, which excludes the direct tax impacts of pre-tax non-GAAP adjustments. AMD also provided adjusted EBITDA and free cash flow as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables at the end of this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of January 26, 2021 and assumptions and beliefs that involve numerous risks and uncertainties. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law. |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
Net revenue | $ | 3,244 | $ | 2,801 | $ | 2,127 | $ | 9,763 | $ | 6,731 | ||||||||||||||||||||||
Cost of sales | 1,793 | 1,571 | 1,178 | 5,416 | 3,863 | |||||||||||||||||||||||||||
Gross profit | 1,451 | 1,230 | 949 | 4,347 | 2,868 | |||||||||||||||||||||||||||
Gross margin % | 45 | % | 44 | % | 45 | % | 45 | % | 43 | % | ||||||||||||||||||||||
Research and development | 573 | 508 | 395 | 1,983 | 1,547 | |||||||||||||||||||||||||||
Marketing, general and administrative | 308 | 273 | 206 | 995 | 750 | |||||||||||||||||||||||||||
Licensing gain | — | — | — | — | (60) | |||||||||||||||||||||||||||
Operating income | 570 | 449 | 348 | 1,369 | 631 | |||||||||||||||||||||||||||
Interest expense | (9) | (11) | (18) | (47) | (94) | |||||||||||||||||||||||||||
Other expense, net | (15) | (37) | (125) | (47) | (165) | |||||||||||||||||||||||||||
Income before income taxes and equity income | 546 | 401 | 205 | 1,275 | 372 | |||||||||||||||||||||||||||
Income tax provision (benefit) | (1,232) | 12 | 35 | (1,210) | 31 | |||||||||||||||||||||||||||
Equity income in investee | 3 | 1 | — | 5 | — | |||||||||||||||||||||||||||
Net Income | $ | 1,781 | $ | 390 | $ | 170 | $ | 2,490 | $ | 341 | ||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||||||||
Basic | $ | 1.48 | $ | 0.33 | $ | 0.15 | $ | 2.10 | $ | 0.31 | ||||||||||||||||||||||
Diluted | $ | 1.45 | $ | 0.32 | $ | 0.15 | $ | 2.06 | $ | 0.30 | ||||||||||||||||||||||
Shares used in per share calculation | ||||||||||||||||||||||||||||||||
Basic | 1,205 | 1,184 | 1,140 | 1,184 | 1,091 | |||||||||||||||||||||||||||
Diluted | 1,226 | 1,215 | 1,188 | 1,207 | 1,120 |
December 26, 2020 | December 28, 2019 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,595 | $ | 1,466 | ||||||||||
Short-term investments | 695 | 37 | ||||||||||||
Accounts receivable, net | 2,066 | 1,859 | ||||||||||||
Inventories | 1,399 | 982 | ||||||||||||
Receivables from related parties | 10 | 20 | ||||||||||||
Prepaid expenses and other current assets | 378 | 233 | ||||||||||||
Total current assets | 6,143 | 4,597 | ||||||||||||
Property and equipment, net | 641 | 500 | ||||||||||||
Operating lease right-of-use assets | 208 | 205 | ||||||||||||
Goodwill | 289 | 289 | ||||||||||||
Investment: equity method | 63 | 58 | ||||||||||||
Deferred tax assets | 1,245 | 22 | ||||||||||||
Other non-current assets | 373 | 357 | ||||||||||||
Total Assets | $ | 8,962 | $ | 6,028 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | 468 | 988 | ||||||||||||
Payables to related parties | 78 | 213 | ||||||||||||
Accrued liabilities | 1,796 | 1,084 | ||||||||||||
Other current liabilities | 75 | 74 | ||||||||||||
Total current liabilities | 2,417 | 2,359 | ||||||||||||
Long-term debt, net | 330 | 486 | ||||||||||||
Long-term operating lease liabilities | 201 | 199 | ||||||||||||
Other long-term liabilities | 177 | 157 | ||||||||||||
Stockholders' equity: | ||||||||||||||
Capital stock: | ||||||||||||||
Common stock, par value | 12 | 12 | ||||||||||||
Additional paid-in capital | 10,544 | 9,963 | ||||||||||||
Treasury stock, at cost | (131) | (53) | ||||||||||||
Accumulated deficit | (4,605) | (7,095) | ||||||||||||
Accumulated other comprehensive income | 17 | — | ||||||||||||
Total stockholders' equity | $ | 5,837 | $ | 2,827 | ||||||||||
Total Liabilities and Stockholders' equity | $ | 8,962 | $ | 6,028 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
Net cash provided by (used in) | ||||||||||||||||||||||||||||||||
Operating activities | $ | 554 | $ | 339 | $ | 442 | $ | 1,071 | $ | 493 | ||||||||||||||||||||||
Investing activities | $ | (294) | $ | (549) | $ | (26) | $ | (952) | $ | (149) | ||||||||||||||||||||||
Financing activities | $ | 35 | $ | (269) | $ | (107) | $ | 6 | $ | 43 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
Segment and Category Information | ||||||||||||||||||||||||||||||||
Computing and Graphics(1) | ||||||||||||||||||||||||||||||||
Net revenue | $ | 1,960 | $ | 1,667 | $ | 1,662 | $ | 6,432 | $ | 4,709 | ||||||||||||||||||||||
Operating income | $ | 420 | $ | 384 | $ | 360 | $ | 1,266 | $ | 577 | ||||||||||||||||||||||
Enterprise, Embedded and Semi-Custom(2) | ||||||||||||||||||||||||||||||||
Net revenue | $ | 1,284 | $ | 1,134 | $ | 465 | $ | 3,331 | $ | 2,022 | ||||||||||||||||||||||
Operating income | $ | 243 | $ | 141 | $ | 45 | $ | 391 | $ | 263 | ||||||||||||||||||||||
All Other(3) | ||||||||||||||||||||||||||||||||
Net revenue | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Operating loss | $ | (93) | $ | (76) | $ | (57) | $ | (288) | $ | (209) | ||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||
Net revenue | $ | 3,244 | $ | 2,801 | $ | 2,127 | $ | 9,763 | $ | 6,731 | ||||||||||||||||||||||
Operating income | $ | 570 | $ | 449 | $ | 348 | $ | 1,369 | $ | 631 | ||||||||||||||||||||||
Other Data | ||||||||||||||||||||||||||||||||
Capital expenditures | $ | 74 | $ | 74 | $ | 42 | $ | 294 | $ | 217 | ||||||||||||||||||||||
Adjusted EBITDA(4) | $ | 753 | $ | 607 | $ | 469 | $ | 1,969 | $ | 1,062 | ||||||||||||||||||||||
Cash, cash equivalents and short-term investments | $ | 2,290 | $ | 1,771 | $ | 1,503 | $ | 2,290 | $ | 1,503 | ||||||||||||||||||||||
Free cash flow(5) | $ | 480 | $ | 265 | $ | 400 | $ | 777 | $ | 276 | ||||||||||||||||||||||
Total assets | $ | 8,962 | $ | 7,023 | $ | 6,028 | $ | 8,962 | $ | 6,028 | ||||||||||||||||||||||
Total debt | $ | 330 | $ | 373 | $ | 486 | $ | 330 | $ | 486 |
(1) | The Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs and development services. From time to time, the Company may also sell or license portions of its IP portfolio. | ||||
(2) | 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. From time to time, the Company may also sell or license portions of its IP portfolio. | ||||
(3) | All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category is stock-based compensation expense and acquisition-related costs. | ||||
(4) | Reconciliation of GAAP Net Income to Adjusted EBITDA* |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
GAAP net income | $ | 1,781 | $ | 390 | $ | 170 | $ | 2,490 | $ | 341 | ||||||||||||||||||||||
Interest expense | 9 | 11 | 18 | 47 | 94 | |||||||||||||||||||||||||||
Other expense, net | 15 | 37 | 125 | 47 | 165 | |||||||||||||||||||||||||||
Income tax provision (benefit) | (1,232) | 12 | 35 | (1,210) | 31 | |||||||||||||||||||||||||||
Equity income in investee | (3) | (1) | — | (5) | — | |||||||||||||||||||||||||||
Stock-based compensation | 79 | 76 | 57 | 274 | 197 | |||||||||||||||||||||||||||
Depreciation and amortization | 90 | 82 | 64 | 312 | 222 | |||||||||||||||||||||||||||
Acquisition-related costs | 14 | — | — | 14 | — | |||||||||||||||||||||||||||
Loss contingency on legal matter | — | — | — | — | 12 | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 753 | $ | 607 | $ | 469 | $ | 1,969 | $ | 1,062 |
(5) | Free Cash Flow Reconciliation** |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
December 26, 2020 | September 26, 2020 | December 28, 2019 | December 26, 2020 | December 28, 2019 | ||||||||||||||||||||||||||||
GAAP net cash provided by operating activities | $ | 554 | $ | 339 | $ | 442 | $ | 1,071 | $ | 493 | ||||||||||||||||||||||
Purchases of property and equipment | (74) | (74) | (42) | (294) | (217) | |||||||||||||||||||||||||||
Free cash flow | $ | 480 | $ | 265 | $ | 400 | $ | 777 | $ | 276 |
* | The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income for interest expense, other expense, net, income tax provision (benefit), equity income on investee, stock-based compensation, and depreciation and amortization expense. The Company also included acquisition-related costs for the quarter and the year ended December 26, 2020, and a loss contingency on legal matter for the year ended December 28, 2019. The Company calculates and presents Adjusted EBITDA because management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of income or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities that can affect cash flows. | ||||
** | The Company also presents free cash flow as a supplemental Non-GAAP measure of its performance. Free cash flow is determined by adjusting GAAP net cash provided by operating activities for capital expenditures. The Company calculates and communicates free cash flow in the financial earnings press release because management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities. | ||||
The Company has provided reconciliations within the earnings press release of these Non-GAAP financial measures to the most directly comparable GAAP financial measures. |
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