<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 30, 1994
ADVANCED MICRO DEVICES, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-7882 94-1692300
-------- ------ ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One AMD Place
P.O. Box 3453
Sunnyvale, California 94088-3453
- - --------------------- ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (408) 732-2400
Exhibit Index
located on sequential page 5 Page 1 of 12
<PAGE>
Item 5. Other Events
- - ------- ------------
On December 30, 1994, Advanced Micro Devices, Inc. (the "Company") issued a
press release announcing that the California Supreme Court upheld an
arbitrator's award of technology rights to the Company in a long-running legal
battle with Intel Corporation concerning a 1982 technology exchange agreement
between the two companies (the "AMD/Intel Technology Agreement Arbitration").
Prior to the settlement with Intel next discussed, the press release also
advised that Intel was expected to continue to challenge the validity of the
award in federal court.
On January 11, 1995, the Company issued a press release announcing that it had
reached agreement with Intel Corporation to settle all current outstanding legal
disputes (the "AMD/Intel Litigations") which include: (1) the AMD/Intel
Technology Agreement Arbitration; (2) the '287 Microcode Litigation; (3) the
'386 Microcode Litigation; (4) the '486 Microcode Litigation; (5) the Anti-trust
Litigation; (6) the Business Interference Litigation and (7) the ITC Action.
The settlement agreement terms include:
1. AMD will have a perpetual license to the microcode in the Intel
386(TM) and Intel 486(TM) microprocessors.
2. AMD agrees that it has no right to copy any other Intel microcode
including the Pentium(TM) Processor, P6 microcode and 486 ICE (in
circuit emulation) microcode.
3. The companies will negotiate a new patent cross-license agreement to
become effective 1/1/96.
4. Intel will receive $58 million as settlement for past damages related
to the ICE module of the '486 Microcode Litigation case. As ordered in
the 1992 arbitration between the two companies, Intel will pay AMD
approximately $18 million in damages (which includes interest) awarded
by the arbitrator for breach of contract and will not contest the
rights granted AMD in the AMD/Intel Technology Agreement Arbitration.
The damages amount of $18 million was previously recorded by the
Company in the third quarter of 1994.
5. Intel and AMD will drop all cases including appeals currently pending
in the courts.
6. AMD will have the right to use foundries for Am486(R) products
containing Intel microcode for up to 20 percent of its 486 production.
7. AMD and its customers will get a license for Intel's "Crawford '338"
patent, covering memory management.
8. The two companies agree not to initiate legal action against one
another for any activity occurring prior to January 6, 1995.
2
<PAGE>
On January 12 , 1995, the Company issued a press release announcing that it had
restated its 1994 financial results as a result of the settlement of the
AMD/Intel litigations, specifically the agreement to pay Intel $58 million for
past damages in the ICE module of the 486 Microcode Litigation. Thus, the
Company recorded a $58 million charge in its fourth quarter of 1994 and revised
its previously released 1994 results. Net income for the quarter and the year
end was reduced by $35,877,000 from the originally reported amounts because of
the tax benefit of the settlement and an accrual made for the AMD/Intel
Litigations previously recorded in the fourth quarter.
Currently, assuming the Intel settlement is fully consummated, the Company does
not anticipate that the AMD/Intel Litigations or the foregoing settlement will
have a material adverse impact on the Company's financial condition or results
of operations for fiscal year 1995.
3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVANCED MICRO DEVICES, INC
(Registrant)
Date: January 19, 1995 By: /s/ Larry R. Carter
----------------------------
Larry R. Carter
4
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Sequential
Page No.
--------
<S> <C> <C>
28.1 Press Release dated December 30, 1994 announcing that 6
the California Supreme Court upheld the arbitrator's
award in the AMD/Intel Technology Agreement Arbitration.
28.2 Press Release dated January 11, 1995 announcing that 8
the Company and Intel Corporation settled AMD/Intel
Litigations.
28.3 Press Release dated January 12, 1995 announcing that 10
the Company restated its 1994 financial results as a
consequence of the settlement of the AMD/Intel Litigations.
</TABLE>
<PAGE>
EXHIBIT 28.1
NEWS RELEASE
For further information:
John Greenagel (408) 749-3310
Chuck Mulloy (408) 749-5481
CALIFORNIA SUPREME COURT UPHOLDS ARBITRATOR'S
AWARD TO ADVANCED MICRO DEVICES
SUNNYVALE, CA ... December 30, 1994 ... The California Supreme Court has
upheld an arbitrator's award of technology rights to Advanced Micro Devices,
Inc. in a long-running legal battle with Intel Corporation concerning a 1982
technology exchange agreement between the two companies.
The ruling ends litigation that began in 1987 when AMD brought suit to
compel arbitration, alleging that Intel had failed to honor its obligations
under the technology exchange agreement. After finding that Intel had breached
contractual obligations, including obligations of "good faith and fair dealing,"
retired Superior Court Judge J. Barton Phelps, acting as court-appointed
arbitrator, awarded AMD, in addition to other remedies, a worldwide, royalty-
free license to any Intel intellectual property contained in AMD's reverse-
engineered Am386(R) microprocessor. These rights included patents, copyrights,
mask work rights and trade secrets. Judge Phelps also extended the terms of
AMD's license rights for two years as those rights concern the Am386
microprocessor.
In 1993 a Sixth District Court of Appeals panel ruled that the arbitrator
had exceeded his jurisdiction and invalidated the award of technology rights.
Today's Supreme Court action overrules this lower court decision and affirms the
Superior Court's judgment in favor of AMD.
<PAGE>
In an unrelated proceeding earlier this year, unanimous jury verdicts
upheld AMD's license rights to use Intel microcodes, including the microcode in
the Am386 microprocessor family.
"AMD is delighted at a decision that not only does justice in this
particular case, but also preserves the viability of arbitration as an
alternative form of resolution for complicated business disputes in California,"
said W. J. Sanders III, chairman and chief executive officer. "This ruling,
which we expect will be followed by the federal courts, forecloses Intel's
claims for monetary damages based on our sales of 386 microprocessors," Mr.
Sanders continued.
Mr. Sanders said AMD does not believe the federal courts will respond
favorably to Intel's pleas to ignore a ruling of the California Supreme Court
simply because it involves copyright issues. "This case involved a contract
breach and the appropriate remedies for that breach," said Mr. Sanders.
"Although the arbitrator awarded a license to a federally protected copyright,
the arbitrator's authority to make that award is exclusively governed by state
law. Because California contract law controlled AMD's 1982 agreement with Intel,
the federal court must defer to the California Supreme Court's interpretation of
the arbitrator's powers. We are confident that the federal court will accept
the Supreme Court's decision and dismiss Intel's federal copyright action on the
Am386 microprocessor.
"AMD and Intel have been in litigation long enough. I hope we can now find
a path to a resolution based on our mutual interest in supporting the continued
expansion of the market for Microsoft(R) Windows(TM)-compatible computer
systems," he concluded.
#####
AMD news release #94CORP27
Am386 is a registered trademark of Advanced Micro Devices, Inc.
Microsoft is a registered trademark of Microsoft Corp.
Windows is a trademark of Microsoft Corp.
<PAGE>
EXHIBIT 28.2
NEWS RELEASE
For further information:
Chuck Mulloy
AMD
(408) 749-5481
Howard High
Intel
(408) 765-1488
AMD, INTEL SETTLE ALL LEGAL DISPUTES
------------------------------------
SANTA CLARA, CA ... January 11, 1995 ... Advanced Micro Devices, Inc. and Intel
Corporation said they have reached agreement to settle all outstanding legal
disputes between the two companies.
Following are the major points of the agreement:
* AMD will have a perpetual license to the microcode in the
Intel 386(TM) and Intel 486(TM) microprocessors.
* AMD agrees that it has no right to copy any other Intel
microcode including the Pentium(TM) Processor, P6 microcode
and 486 ICE (in circuit emulation) microcode.
* The companies will negotiate a new patent cross-license
agreement to become effective 1/1/96.
* Intel will receive $58 million as settlement for past damages
in the 486 ICE case. As ordered in the 1992 arbitration
between the two companies, Intel will pay AMD approximately
$18 million (which includes interest) awarded by the
arbitrator for breach of contract and will not contest the
rights granted AMD in the arbitration award.
<PAGE>
* Intel and AMD will drop all cases including appeals currently
in the courts.
* AMD will drop its antitrust case against Intel.
* AMD will have the right to use foundries for Am486(R)
products containing Intel microcode for up to 20 percent of
its 486 production.
* AMD and its customers will get a license on Intel's "Crawford
'338" patent, covering memory management.
* The two companies will agree not to initiate legal action
against one another for any activity occurring prior to
January 6, 1995.
The two companies said they have been in negotiations for 4 months. The
talks were suggested by Judge Magistrate Patricia Trumbull of the U.S. District
Court in San Jose, who presided in the 386 and 486 cases.
In a joint statement, Richard Previte, president and chief operating
officer of AMD, and Craig Barrett, executive vice president and chief operating
officer of Intel, said "We are pleased to reach an agreement that will enable
the two companies to concentrate on competing in the marketplace, not the
courts. This is clearly in the best interests of our customers, our
stockholders and the PC marketplace." Messrs. Previte and Barrett were the lead
negotiators of the agreement.
AMD is the fifth-largest U.S. manufacturer of integrated circuits.
Focusing on the personal and networked computing and communications markets, AMD
produces microprocessors and related peripherals, memories, programmable logic
devices and circuits for telecommunications and networking applications.
Intel, the world's largest chip maker, is also a leading manufacturer of
personal computer, networking and communications products.
###
AMD news release #95CORP3
<PAGE>
EXHIBIT 28.3
NEWS RELEASE
For further information:
Chuck Mulloy
(408) 749-5481
ADVANCED MICRO DEVICES RESTATES 1994 RESULTS
TO REFLECT LITIGATION SETTLEMENT
SUNNYVALE, CA ... January 12, 1995 ... Advanced Micro Devices (AMD) today
announced that as a result of the AMD and Intel litigation settlement as
required for financial reporting purposes, AMD recorded a $58 million charge in
its fourth quarter of 1994 and revised its previously released 1994 results. Net
income for the quarter and the year end was reduced by $ 35,877,000 from the
originally reported amounts because of the tax benefit of the settlement and an
accrual previously recorded in the fourth quarter.
Even after the restatement AMD still achieved record sales, operating
income and net income for 1994. The settlement will have no financial impact on
1995 operating results or financial condition.
Advanced Micro Devices, Inc., is the fifth-largest U.S. manufacturer of
integrated circuits. Focusing on the personal and networked computing and
communications markets, AMD produces microprocessors and related peripherals,
memories, programmable logic devices and circuits for telecommunications and
networking applications. AMD has sales offices worldwide and has manufacturing
facilities in Sunnyvale, California; Austin, Texas; Bangkok, Thailand; Penang,
Malaysia; Singapore; Aizu-Wakamatsu, Japan and Basingstoke, England.
###
<PAGE>
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
<TABLE>
<CAPTION>
(Revised)*
December 25, December 26,
1994 1993
(Audited) (Audited)
<S> <C> <C>
- - ---------------------------------------------------------------------------------------
ASSETS
- - ---------------------------------------------------------------------------------------
Current assets:
Cash and temporary cash investments $ 377,854 $ 488,198
Accounts receivable, net 337,107 263,617
Inventories 128,690 104,050
Prepaid expenses and other current assets 44,293 30,399
Deferred income taxes 98,675 77,922
- - ---------------------------------------------------------------------------------------
Total current assets 986,619 964,186
Other assets 70,284 58,633
Property, plant, and equipment, net 1,264,211 904,326
Investment in joint venture 124,588 2,086
- - ---------------------------------------------------------------------------------------
$ 2,445,702 $ 1,929,231
=======================================================================================
Liabilities and Shareholders' Equity
- - ---------------------------------------------------------------------------------------
Current liabilities:
Notes payable to banks $ 32,459 $ 30,994
Accounts payable 149,122 127,151
Accrued compensation and benefits 104,526 81,860
Other accrued liabilities 140,570 83,982
Income tax payable 53,795 34,991
Deferred income on shipments to distributors 83,800 74,436
Long-term debt and capital lease obligations
due within one year 27,895 21,205
- - ---------------------------------------------------------------------------------------
Total current liabilities 592,167 454,619
Deferred income taxes 42,518 42,837
Long-term debt and capital lease obligations due
after one year 75,752 79,504
Shareholders' equity:
Capital stock:
Serial preferred stock, par value 34 35
Common stock, par value 956 926
Capital in excess of par value 698,673 619,733
Retained earnings 1,035,602 731,577
- - ---------------------------------------------------------------------------------------
Total shareholders' equity 1,735,265 1,352,271
- - ---------------------------------------------------------------------------------------
$ 2,445,702 $ 1,929,231
=======================================================================================
</TABLE>
* Revised from previously released financial information as a result of a
negotiated settlement with Intel Corporation.
<PAGE>
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
(Unaudited) (Audited)
- - --------------------------------------------------------------------------------------------------
Dec. 25, Sept. 25, Dec. 26, Dec. 25, Dec. 26,
1994 1994 1993 1994 1993
(Revised)* (Revised)*
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET SALES $ 545,168 $ 543,114 $413,404 $2,134,659 $ 1,648,280
Cost of sales 263,837 252,409 208,552 982,306 789,564
Research and development 76,115 67,759 66,747 279,984 262,802
Marketing, general, and 87,236 87,369 83,148 359,230 290,861
administrative
- - --------------------------------------------------------------------------------------------------
427,188 407,537 358,447 1,621,520 1,343,227
- - --------------------------------------------------------------------------------------------------
Operating income 117,980 135,577 54,957 513,139 305,053
Litigation settlement (58,000) - - (58,000) -
Interest income and other, net 5,317 394 4,647 16,259 16,490
Interest expense (1) (205) (1,391) (1,844) (2,910)
- - --------------------------------------------------------------------------------------------------
Income before income taxes and
equity in joint venture 65,296 135,766 58,213 469,554 318,633
Provision for income taxes 21,548 44,803 16,300 153,703 89,218
- - --------------------------------------------------------------------------------------------------
Income before equity in
joint venture 43,748 90,963 41,913 315,851 229,415
Equity in net income (loss) of
joint venture (2,989) (4,277) (274) (10,585) (634)
- - --------------------------------------------------------------------------------------------------
NET INCOME 40,759 86,686 41,639 305,266 228,781
Preferred stock dividends 2,588 2,587 2,588 10,350 10,350
- - --------------------------------------------------------------------------------------------------
NET INCOME APPLICABLE
TO COMMON SHAREHOLDERS $ 38,171 $ 84,099 $ 39,051 $ 294,916 $ 218,431
- - --------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
- Primary $0.39 $0.86 $0.41 $3.02 $2.30
- Fully diluted $0.39 $0.83 $0.41 $2.92 $2.24
- - --------------------------------------------------------------------------------------------------
Shares used in per share calculation
- Primary 98,636 97,778 95,895 97,510 95,108
- Fully diluted 105,490 104,872 102,751 104,570 102,063
- - --------------------------------------------------------------------------------------------------
</TABLE>
* Revised from previously released financial information as a result of a
negotiated settlement with Intel Corporation.
