Advanced Micro Devices Inc · NASDAQ:AMD
Advanced Micro Devices — Merger or Acquisition (July 2006)
20 slides from Advanced Micro Devices's merger presentation, Jul 24, 2006
Slide 1: Two Exciting Great Companies, One Future Presentation to Investors
Exhibit 99.1 Two Exciting One Presentation July 24, Great 2006 Companies, toFuture Investors
Slide 2: Safe Harbor Statement
Safe This are expectations could (2) transaction realized gross marketing sufficient impairment growth (13) affect with for “Narrative Annual in any and security Canadian SEC’s 2 those failure the commonly other security potential Harbor document the margins, cause future website fiscal and report m
Slide 3: Transaction Summary
A Processing Summary Transaction Economics Compelling Execution Strong Company Stronger Opportunities Strategic Value Shareholder Creating Growth Ready Deliver Innovation Aim Empower Choice Advance 3 toto reinvent transform new Shareholder an win ouropen-innovation customer-centric Powerhouse busine
Slide 4: Strategic Opportunities: Stronger Computing Platform TAM
Strategic Stronger Strong Compelling Transaction Computing Particularly Building Consumer/ Commercial/ $17.7B $4.0B Mobile $4.5B Server $4.3B Chipsets GPU/ $40.4B Total AMD * 2005 4 Source: full Desktop Comparative Growth $5.4B $4.5B Execution $7.3B $20.1B Company on Opportunities year AMD, SOHO Pla
Slide 5: High-Growth Consumer Electronics Opportunities
High-Growth Creating Strategic Stronger Strong Compelling Transaction Digital Segment Multimedia Game #1 Position Potential Historical 15% 26% 59% Create Royalty ~40% ~50% * 5 Sources: front-end Consoles and Execution TVShareholder Company Opportunities Market Gross Handheld: deliver Handsets Summar
Slide 6: Common Strengths Across Both Companies
Common Creating Strategic Stronger Strong Compelling Transaction Game Desktop Workstation Server Segments DTV Greater Geographies Latin Europe PC Distribution Customers/Partners Japan Digital Retail Customer Microprocessors Products Consumer ODM Best-in-class Graphics Chipset Media Tech-centric Hype
Slide 7: Partner of Choice for Consoles, TVs, Handhelds
PartnerConsoles Creating Strategic Stronger Strong Compelling Transaction Digital Computing Game Handhelds Strongly 7 Execution TVs ofShareholder Company positioned Opportunities Choice Summary Economics asValue strategic supplier in computing and consumer electronics
Slide 8: Focused Execution: Combined Management Team
Focused Creating Strategic Stronger Strong Compelling Transaction Track Combined Integration Precise Hector Dirk Dave Bob Henri Tom Rick 8 Rivet McCoy Meyer Hegberg Orton Richard record Execution Ruiz market on Shareholder Company Opportunities management efforts Strong Summary Economics ofexecution
Slide 9: Delivering Platform Solutions in 2007
Delivering Creating Strategic Stronger Strong Compelling Transaction Commercial Stable Best Gaming Best-in-class Mobile Longer Optimized Emerging Development Accelerated …along 9 platform image Execution battery Computing & with Shareholder Company Opportunities Markets graphics Media Customer-Centr
Slide 10: Aim to Transform Processing in 2008 and Beyond
Aim to Creating Strategic Stronger Strong Compelling Transaction Combine Drivers General Platforms Data Graphics Media BIOS, 10 Chipset Video GPU CPU Centric GPU Driver, Centric Execution Transform BIOS Purpose Shareholder Company Opportunities Centric our Video Chipset Summary Economics key Softwar
Slide 11: Optimizing Digital Multimedia and Handheld Products
Optimizing Accelerate Summary Transaction Economics Compelling Execution Strong Company Stronger Opportunities Strategic Value Shareholder Creating Support Drive Enhance DIGITAL MULTIMEDIA 11 features TV, digital TV multimedia Consumer video, PRODUCTS and TV AND image photography, at HANDHELD afford
Slide 12: Shareholder-Centric Financial Strategy
Shareholder-Centric Optimize Summary Transaction Economics Compelling Execution Strong Company Stronger Opportunities Strategic Value Shareholder Creating Approx. $2.5Bn De-leverage 20-25% Term Use Maintain Access 12 free Loan to flexible, debt/capitalization 80% cash strong transaction $850MM Bbala
Slide 13: Strong Capital Structure
Capital $Bn Summary Transaction Economics Compelling Execution Company Stronger Opportunities Strategic Value Shareholder Creating Cash Spansion (as Debt Debt/Capitalization Strong * 13Represents ofCombined* $0.7 $3.0 7/21/06) balance Structure Investment $2.5 ($1.7) the$0.8 sheet Transaction combin
Slide 14: 1H06 Financial Comparison
1H06 Creating Strategic Stronger Strong Compelling Transaction 1st Gross 57.6% 29.1% $3,873 Revenue $2,549 $1,325 Combined ATI AMD $MM Operating 14.2% 4.8% 47.9% Net $273 $66 10.9% Stock $33 $24 $339 *1H Employees 10,967 4,000 14,967 $716 R&D $543 $173 $57 14 Half Income 2006 Financial Based Margin
Slide 15: Synergy Objectives and Revenue Opportunity
Revenue Creating Strategic Stronger Strong Compelling Transaction New Longer-Term 2007 2008 Solutions ~$40Bn Silicon Full 0.2-0.4% 0.5-1.0% 1.5-3% Reduce Manufacturing $50-100MM Efficiencies $4Bn $3Bn Pre-Tax $100-150MM $125MM+ We to * 15Excluding beexpect Service Platforms slightly COGS Op Executio
Slide 16: Revenue Synergy Potential
Products Synergy Revenue Financials Transaction Economics Compelling Execution Strong Company Stronger Opportunities Strategic Value Shareholder Creating Revenue Drivers Synergy Potential (Gross Margins) 2007 2008 2009 & Beyond More Client Platforms New Platforms New Platforms Client MPUs Full Servi
Slide 17: Cost Synergy Sources
Creating Strategic Stronger Strong Compelling Transaction Summary 1H06**Synergies Expenses 17 Sources 2007 2008 Execution Annualized Cost Total % Longer-TermShareholder Company Opportunities Procurement, Royalty synergies Potential Redundant Common R&D Intel ofof Codecs/Design Operational Corporate
Slide 18: Gross Margin Synergy Opportunities
Gross Creating Strategic Stronger Strong Compelling Transaction 1st Synergy Lower Operational Eliminate Procurement, Increase Focus Hybrid 24% Total * 181HHalf $700 2006 51-56% Margin investment total Execution manufacturing 2006* Opportunities platform Shareholder Company Opportunities royalty 32-3
Slide 19: New Financial Model
New Creating Strategic Stronger Strong Compelling Transaction Old Model Revenue Gross R&D SG&A Operating * 191HAMD Target 2006 18-23% Margin 1H06* Execution 12-16% Shareholder Company 100% Opportunities Margin New represents Financial Financials Economics 55-60% 18% Combined 100% AMD 18%18-24% 18-21
Slide 20: Creating Strategic Value: Acquisition Consideration
Creating Strategic Stronger Strong Compelling Acquisition Consideration: 0.2229 ATI Cash Transaction Subject * 20Based shareholders portion Execution fixed to on Shareholder Company Opportunities ATI AMD’s of Summary expected Economics exchange funded ATI shareholder $4.2Bn tofor closing own with to
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