Spreadsheet: 2d492183-e9ab-42ed-9a0e-6762aff26d50
Sheet: SEG2

 | (1) | Computing Solutions segment includes microprocessors, chipsets and embedded processors.
 | (2) | Graphics segment includes graphics, video and multimedia products developed for use in desktop and notebook computers, including home media PCs, professional workstations, servers and also includes royalties received in connection with the sale of game console systems that incorporate the Company’s graphics technology.
 | (3) | All Other category includes certain operating expenses and credits that are not allocated to the operating segments.  Also included in this category are amortization of acquired intangible assets and restructuring charges. It also includes the results of the [NAME] business unit because the operating results of this business unit were not material.
 | (4) | AMD reconciliation of GAAP operating income to Adjusted EBITDA*
 |  |  | Quarter Ended
 |  |  | Apr. 2, 2011 | Dec. 25, 2010 | Mar. 27, 2010
 |  | GAAP operating income | 54 | 413 | 182
 |  | Payment to GLOBALFOUNDRIES | 24 | 0 | 0
 |  | Legal settlement | 5 | -283 | 0
 |  | Depreciation and amortization | 79 | 78 | 83
 |  | Employee stock-based compensation expense | 27 | 22 | 20
 |  | Amortization of acquired intangible assets | 9 | 11 | 17
 |  | Adjusted EBITDA | 198 | 241 | 302
 | (5) | Non-GAAP adjusted free cash flow reconciliation**
 |  |  | Quarter Ended
 |  |  | Apr. 2, 2011 | Dec. 25, 2010 | Mar. 27, 2010
 |  | GAAP net cash provided by (used in) operating activities | -168 | -213 | 23
 |  | Non-GAAP adjustment | 360 | 262 | 202
 |  | Non-GAAP net cash provided by operating activities | 192 | 49 | 225
 |  | Purchases of property, plant and equipment | -38 | -38 | -48
 |  | Non-GAAP adjusted free Cash Flow | 154 | 11 | 177
 |  | *Starting with the quarter ended December 26, 2009, the Company presented “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company was determined by adjusting operating income (loss) for depreciation and amortization, employee stock-based compensation expense and amortization of acquired intangible assets. In addition, for the first quarter of 2011, the Company included an adjustment related to a payment to GLOBALFOUNDRIES and a legal settlement with a third party; and for the fourth quarter of 2010, the Company included an adjustment related to its legal settlement with a third party. The Company calculates and communicates Adjusted EBITDA in the financial schedules because the Company’s management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds.  In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of operating income (loss) or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows.
 |  | ** Starting in the first quarter of 2010, the Company presents non-GAAP adjusted free cash flow as a supplemental measure of its performance.  In 2008 and 2009 the Company and certain of its subsidiaries (collectively, the “AMD Parties”) entered into supplier agreements with IBM Credit LLC and certain of its subsidiaries, (collectively, the “IBM Parties”).   Pursuant to these supplier agreements, the AMD Parties sold to the IBM Parties invoices of selected distributor customers.  Because the Company does not recognize revenue until its distributors sell its products to their customers, under U.S. GAAP, the Company classifies funds received from the IBM Parties as debt on the balance sheet. Moreover, for cash flow purposes, these funds are classified as cash flows from financing activities. When a distributor pays the applicable IBM Party, the Company reduces the distributor’s accounts receivable and the corresponding debt resulting in a non-cash accounting entry.  Because the Company does not receive the cash from the distributor to reduce the accounts receivable, the distributor’s payment is never reflected in the Company’s cash flows from operating activities.  [NAME] adjusted free cash flow for the Company was determined by adjusting GAAP net cash provided by (used in) operating activities by adding the distributors’ payments to the IBM Parties to GAAP net cash provided by (used in) operating activities. This amount is then further adjusted by subtracting capital expenditures.  Generally, under U.S. GAAP, the reduction in accounts receivable is assumed to be a source of operating cash flows.  Therefore, the Company believes that treating the payments from its distributor customers to the IBM Parties as if the Company actually received the cash from the distributor and then used that cash to pay down the debt is more reflective of the economic substance of the transaction.  On February 11, 2011, the Company terminated its supplier agreements with the IBM Parties. The Company calculates and communicates non-GAAP adjusted free cash flow in the financial schedules because the Company’s management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of non-GAAP Adjusted free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view non-GAAP Adjusted Free Cash Flow as an alternative to GAAP liquidity measures of cash flows from operating or financing activities.