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AMD posted a profit of $96 million on revenues of $1.84 billion for the fourth quarter of 2005. This compares to a loss of $30 million and sales of $1.26 billion in Q4 of 2004. For the year, revenues climbed 17% from 5.0 billion to $5.85 billion, net income rose from $91 million in 2004 to $165 million in 2005. Q4 revenues include sales generated from its Spansion memory group, which the company spun off in December. Fourth quarter revenues were $1.35 billion - up 78% from comparable sales of $760 million in Q4 2004. The firm's Computation Product Group (CPG) - responsible for microprocessors - achieved sales of $1.31 billion, which translates into a 79% increase over the same period in 2004. According to AMD, fourth quarters ales growth was driven by "an increase in units and average selling price (ASP), increased demand from AMD's largest global customers, and an acceleration of AMD's commercial server and client businesses." AMD, excluding the results of the Memory Products Group segment, had fourth quarter sales of $1.35 billion, an increase of 78 percent from the fourth quarter of 2004 and 34 percent from the third quarter of 2005. Comparable sales in the fourth quarter of 2004 were $760 million, resulting in operating income of $59 million. Comparable sales in the third quarter of 2005 were $1.01 billion, resulting in operating income of $129 million. For the year ended December 25, 2005, AMD achieved record sales of $5.85 billion, a 17 percent increase from 2004. Fiscal year 2005 net income was $165 million, or $0.40 per share. The annual results include a non-cash charge in the fourth quarter of $110 million, or $0.25 per share, associated with the reduction of AMD's ownership in Spansion to 37.9 percent as a result of Spansion's IPO. AMD reported sales in 2004 of $5.00 billion and a net income of $91 million, or $0.25 per share. AMD, excluding the results of the Memory Products Group segment, had sales of $3.94 billion for the year ended December 25, 2005, an increase of 48 percent from 2004, and operating income of $543 million for 2005. Comparable sales in 2004 were $2.66 billion, resulting in operating income of $187 million. "AMD's growth rate increased in the fourth quarter resulting in continued market share gains across server, desktop and mobile product lines," said Robert J. Rivet, AMD's chief financial officer. "In addition to solid execution against our product and technology strategies, we made significant strides in the quarter to improve our balance sheet by significantly reducing our debt and increasing our cash and short-term investment balance to $1.8 billion." BUSINESS OVERVIEW Record Computation Product Group (CPG) sales of $1.31 billion increased 79 percent from $730 million in the fourth quarter of 2004 and increased 35 percent from $969 million in the third quarter of 2005. CPG generated record operating income of $287 million in the fourth quarter, up from $90 million in the fourth quarter of 2004 and $149 million in the third quarter of 2005. Compared to the third quarter of 2005, CPG's fourth quarter sales growth was driven by an increase in both units and average selling price (ASP), increased demand from AMD's largest global customers, and an acceleration of AMD's commercial server and client businesses. Server, mobile and desktop processor sales each grew significantly compared to the third quarter of 2005. Mobile processor sales growth was driven by increased shipments of AMD Turion 64 processors. Server and desktop sales growth was driven in particular by increased customer adoption of Dual-Core AMD processors. Geographically, processor sales were especially strong in North America, Europe and Greater China. In the fourth quarter of 2005, Memory Products Group (MPG) sales through December 20, 2005, of $487 million decreased 3 percent from $504 million in the fourth quarter of 2004 and 6 percent from $516 million in the third quarter of 2005. MPG had an operating loss of $62 million compared to an operating loss of $50 million in the third quarter of 2005. ADDITIONAL HIGHLIGHTS -- AMD Chairman of the Board, President and CEO Hector Ruiz was named "CEO of the Year" by Electronic Business magazine. -- AMD continues to be a technology partner of choice for an increasing number of enterprises recognizing the performance-per-watt advantages of AMD64 technology. Today, 90 percent of the top 100 and more than 45 percent of the top 500 of the Forbes Global 2000 companies or their subsidiaries are using AMD64 technology. Recent additions include American International Group (AIG), Albertson's, Inc., Clear Channel Communications, Inc. and Nissan Motor Co., Inc. amongst others. -- The AMD64 platform has earned more than 160 global industry awards since introduction, adding more than 20 awards in the fourth quarter alone. Highlights include VARBusiness awarding the AMD Athlon 64 X2 dual-core processor a Tech Innovator Award, Maximum PC naming the AMD Athlon 64 X2 4800+ processor "Gear of the Year", and EDN editors naming the Dual-Core AMD Opteron processor to the magazine's list of "Hot 100 Products of 2005." -- AMD celebrated the grand opening of Fab 36 located in Dresden, Germany. The new 300mm facility will more than double AMD's output during the next three years. Production shipments are expected to begin in the first quarter of 2006 and the ramp of 65nm technology remains on schedule. -- AMD and Sun Microsystems collaborated to build Japan's largest supercomputer for the Tokyo Institute of Technology. The supercomputer is Sun's largest installation to-date, and will use Sun Fire x64 servers powered by 10,480 AMD Opteron processor cores running both the Linux and Solaris operating systems. Once completed, the supercomputer is expected to be among the top 5 highest performing computers in the world. -- Key global OEMs and partners continued to expand their portfolios of AMD-based solutions for the commercial market. HP introduced the HP dx5150 Business Desktop as well as high-performance blade PCs featuring low-power AMD Athlon 64 processors. Fujitsu Siemens Computers launched the PRIMERGY BX630 scalable blade server and a new two-way PRIMERGY RX220 server. Supermicro Computer, Inc. announced general availability of a broad range of AMD Opteron processor-based server and motherboard solutions. -- China's third largest PC maker, Tsinghua Tongfang, launched nine AMD-powered systems targeting the commercial and consumer markets. -- AMD recently unveiled its AMD Live! digital media vision to apply the power and flexibility of the PC to enable enhanced digital entertainment experiences on all the screens in peoples' lives. True to AMD's customer-centric approach which differs from competitive closed-system offerings, AMD LIVE! enables innovative, complementary, industry-friendly solutions that enhance the consumer electronics and broadcast devices already accepted and used by consumers today. -- As part of the company's efforts to expand in high-growth markets, AMD licensed the low-power AMD Geode GX2 processor to China's Ministry of Science and Technology and Peking University, enabling Chinese entities to develop innovative x86-based solutions that will expand the total available market and extend AMD's "x86 everywhere" vision. CURRENT OUTLOOK AMD's outlook statements are based on current expectations. From December 21, 2005, Spansion's financial results will no longer be consolidated as part of AMD's financial results. Instead, AMD will utilize the equity method of accounting to reflect its share of Spansion's net income. The following statements are forward looking, and actual results could differ materially depending on market conditions. AMD expects first quarter sales to be flat to slightly down seasonally from the fourth quarter of 2005. If achieved, this would approach a 70 percent increase from comparable sales in the first quarter of 2005.