Spreadsheet: 1c9c86fa-221a-45dc-a9ec-c843f2f297fd
Sheet: SEG2

 | (1) | Computing Solutions segment includes microprocessors, as standalone devices or as incorporated as an Accelerated Processing Unit, 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 and servers as well as revenue received in connection with the development and sale of game console systems that incorporate the Company’s graphics technology.
 | (3) | All Other category includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category are amortization of acquired intangible assets, stock-based compensation expense, restructuring charges and a charge related to the limited waiver of exclusivity from GLOBALFOUNDRIES ("GF").
 | (4) | Reconciliation of GAAP operating income (loss) to Adjusted EBITDA*
 |  |  | Quarter Ended |  |  |  | Year Ended
 |  |  | Dec. 29, 2012 | Sep. 29, 2012 | Dec. 31, 2011 |  | Dec. 29, 2012 | Dec. 31, 2011
 |  | GAAP operating income (loss) | -422 | -131 | 71 |  | -1056 | 368
 |  | Lower of cost or market charge related to GF take-or-pay obligation | 273 | 0 | 0 |  | 273 | 0
 |  | Limited waiver of exclusivity from GF | 0 | 0 | 0 |  | 703 | 0
 |  | Payments to GF | 0 | 0 | 0 |  | 0 | 24
 |  | Legal settlement | 0 | 0 | 0 |  | 5 | 5
 |  | Depreciation and amortization | 62 | 62 | 67 |  | 247 | 288
 |  | Employee stock-based compensation expense | 23 | 27 | 21 |  | 97 | 90
 |  | Amortization of acquired intangible assets | 4 | 4 | 3 |  | 14 | 29
 |  | Restructuring charges, net | 90 | 3 | 98 |  | 100 | 98
 |  | SeaMicro acquisition costs | 0 | 0 | 0 |  | 6 | 0
 |  | Adjusted EBITDA | 30 | -35 | 260 |  | 389 | 902
 | (5) | Cash, cash equivalents and marketable securities also include the long-term portion of marketable securities.
 | (6) | Non-GAAP adjusted free cash flow reconciliation**
 |  |  | Quarter Ended |  |  |  | Year Ended
 |  |  | Dec. 29, 2012 | Sep. 29, 2012 | Dec. 31, 2011 |  | Dec. 29, 2012 | Dec. 31, 2011
 |  | GAAP net cash provided by (used in) operating activities | -286 | -240 | 187 |  | -338 | 382
 |  | Non-GAAP adjustment | 0 | 0 | 0 |  | 0 | 396
 |  | Non-GAAP net cash provided by (used in) operating activities | -286 | -240 | 187 |  | -338 | 778
 |  | Purchases of property, plant and equipment | -22 | -32 | -87 |  | -133 | -250
 |  | Non-GAAP adjusted free cash flow | -308 | -272 | 100 |  | -471 | 528
 |  | * The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting operating income (loss) for depreciation and amortization, employee stock-based compensation expense and amortization of acquired intangible assets.In addition, the Company also included the following adjustments for the applicable period: for the fourth quarter of 2012, the Company also included adjustments for the lower of cost or market charge (LCM Charge) related to GF take-or-pay obligation and net restructuring charges; for the third quarter of 2012 and the fourth quarter of 2011, the Company also included an adjustment for net restructuring charges; for 2012, the Company also included adjustments for the LCM Charge, a charge related to the limited waiver of exclusivity from GF, a legal settlement with a third party, net restructuring charges and costs related to the acquisition of SeaMicro; and for 2011, the Company also included adjustments related to a payment to GF, a legal settlement with a third party and net restructuring charges. 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.
 |  | ** The Company also presents non-GAAP adjusted free cash flow in the earnings release 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 GAAP, the Company classified funds received from the IBM Parties as debt on the balance sheet. Moreover, for cash flow purposes, these funds were classified as cash flows from financing activities. When a distributor paid the applicable IBM Party, the Company reduced the distributor’s accounts receivable and the corresponding debt resulted in a noncash accounting entry. Because the Company did not receive the cash from the distributor to reduce the accounts receivable, the distributor’s payment was not reflected in the Company’s cash flows from operating activities. Non-GAAP adjusted free cash flow for the Company was determined by adding the distributors’ payments to the IBM Parties to GAAP net cash provided by (used in) operating activities. This amount was then further adjusted by subtracting capital expenditures. Generally, under 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 IBM Parties. As a result, as of the end of the second quarter of 2011, there were no outstanding invoices relating to the financing arrangement with the IBM Parties, and starting from the third quarter of 2011, the Company no longer makes quarterly adjustments for distributors’ payments to the IBM Parties to its GAAP net cash provided by (used in) operating activities when calculating non-GAAP adjusted free cash flow. 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. The Company has provided reconciliations within the press release and financial schedules of these non-GAAP financial measures to the most directly comparable GAAP financial measures.