Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions, except per share amounts)
Net revenue															$	5,473					$	5,353
Cost of sales															2,683						2,689
Amortization of acquisition-related intangibles															230						305
Total cost of sales															2,913						2,994
Gross profit															2,560						2,359
Research and development															1,525						1,411
Marketing, general and administrative															620						585
Amortization of acquisition-related intangibles															392						518
Licensing gain															(13)						(10)
Operating income (loss)															36						(145)
Interest expense															(25)						(25)
Other income (expense), net															53						43
Income (loss) before income taxes and equity income															64						(127)
Income tax provision (benefit)															(52)						13
Equity income in investee															7						1
Net income (loss)															$	123					$	(139)
Earnings (loss) per share
Basic															$	0.08					$	(0.09)
Diluted															$	0.07					$	(0.09)
Shares used in per share calculation
Basic															1,617						1,611
Diluted															1,639						1,611

See accompanying notes.

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

									Three Months Ended
															March 30, 2024						April 1, 2023
												(In millions)
Net income (loss)															$	123					$	(139)
Other comprehensive income (loss), net of tax:
Net change in unrealized gains (losses) on cash flow hedges															(22)						20
Total comprehensive income (loss)															$	101					$	(119)

See accompanying notes.

Advanced Micro Devices, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

			March 30, 2024						December 30, 2023
			(In millions, except par value amounts)
ASSETS
Current assets:
Cash and cash equivalents			$	4,190					$	3,933
Short-term investments			1,845						1,840
Accounts receivable, net			5,038						5,376
Inventories			4,652						4,351
Receivables from related parties			31						9
Prepaid expenses and other current assets			1,328						1,259
Total current assets			17,084						16,768
Property and equipment, net			1,624						1,589
Operating lease right-of-use assets			632						633
Goodwill			24,262						24,262
Acquisition-related intangibles, net			20,741						21,363
Investment: equity method			106						99
Deferred tax assets			433						366
Other non-current assets			3,013						2,805
Total Assets			$	67,895					$	67,885
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	1,418					$	2,055
Payables to related parties			438						363
Accrued liabilities			3,444						3,082
Current portion of long-term debt, net			750						751
Other current liabilities			424						438
Total current liabilities			6,474						6,689
Long-term debt, net of current portion			1,718						1,717
Long-term operating lease liabilities			530						535
Deferred tax liabilities			1,199						1,202
Other long-term liabilities			1,776						1,850
Commitments and contingencies (See Note 12)
Stockholders’ equity:
Capital stock:
Common stock, par value $0.01; shares authorized: 2,250; shares issued: 1,666 and 1,663; shares outstanding: 1,618 and 1,616			17						17
Additional paid-in capital			60,053						59,676
Treasury stock, at cost (shares held: 48 and 47)			(4,690)						(4,514)
Retained earnings			846						723
Accumulated other comprehensive loss			(28)						(10)
Total stockholders’ equity			56,198						55,892
Total liabilities and stockholders’ equity			$	67,895					$	67,885

See accompanying notes.

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

			Three Months Ended
			March 30, 2024						April 1, 2023
			(In millions)
Cash flows from operating activities:
Net income (loss)			$	123					$	(139)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			784						982
Stock-based compensation			371						309
Amortization of operating lease right-of-use assets			26						24
Deferred income taxes			(66)						(308)
Inventory loss at contract manufacturer			65						—
Other			(22)						5
Changes in operating assets and liabilities
Accounts receivable, net			338						86
Inventories			(368)						(464)
Prepaid expenses and other assets			(322)						(191)
Receivables from and payables to related parties, net			53						(109)
Accounts payable			(636)						73
Accrued and other liabilities			175						218
Net cash provided by operating activities			521						486
Cash flows from investing activities:
Purchases of property and equipment			(142)						(158)
Purchases of short-term investments			(433)						(1,703)
Proceeds from maturity of short-term investments			441						473
Proceeds from sale of short-term investments			2						145
Other			(3)						6
Net cash used in investing activities			(135)						(1,237)
Cash flows from financing activities:
Proceeds from sales of common stock through employee equity plans			5						3
Repurchases of common stock			(4)						(241)
Common stock repurchases for tax withholding on employee equity plans			(129)						(21)
Other			(1)						—
Net cash used in financing activities			(129)						(259)
Net increase (decrease) in cash and cash equivalents			257						(1,010)
Cash and cash equivalents at beginning of period			3,933						4,835
Cash and cash equivalents at end of period			$	4,190					$	3,825
Supplemental cash flow information:
Cash paid for taxes, net of refunds			$	87					$	21
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid			$	102					$	69
Repurchases for tax withholding on employee equity plans, not yet paid			$	42					$	—
Non-cash activities for leases:
Operating lease right-of-use assets acquired by assuming related liabilities			$	25					$	—

See accompanying notes.

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions)
Capital stock:
Common stock, par value
Balance, beginning of period															$	17					$	16
Balance, end of period															$	17					$	16
Additional paid-in capital
Balance, beginning of period															$	59,676					$	58,005
Common stock issued under employee equity plans															6						4
Stock-based compensation															371						309
Issuance of common stock warrants															—						13
Balance, end of period															$	60,053					$	58,331
Treasury stock
Balance, beginning of period															$	(4,514)					$	(3,099)
Repurchases of common stock															(4)						(242)
Common stock repurchases for tax withholding on employee equity plans															(172)						(21)
Balance, end of period															$	(4,690)					$	(3,362)
Retained earnings (Accumulated deficit):
Balance, beginning of period															$	723					$	(131)
Net income (loss)															123						(139)
Balance, end of period															$	846					$	(270)
Accumulated other comprehensive loss:
Balance, beginning of period															$	(10)					$	(41)
Other comprehensive income (loss)															(18)						20
Balance, end of period															$	(28)					$	(21)
Total stockholders' equity															$	56,198					$	54,694

See accompanying notes.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – The Company

Advanced Micro Devices, Inc. is a global semiconductor company. References herein to AMD or the Company mean Advanced Micro Devices, Inc. and its consolidated subsidiaries. AMD’s products include x86 microprocessors (CPUs) and graphics processing units (GPUs), as standalone devices or as incorporated into accelerated processing units (APUs), chipsets, data center and professional GPUs, embedded processors, semi-custom System-on-Chip (SoC) products, microprocessor and SoC development services and technology, data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), System on Modules (SOMs), Smart Network Interface Cards (SmartNICs), Artificial Intelligence (AI) Accelerators and Adaptive SoC products. From time to time, the Company may also sell or license portions of its intellectual property (IP) portfolio.

NOTE 2 – Basis of Presentation and Significant Accounting Policies

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of AMD have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three months ended March 30, 2024 shown in this report are not necessarily indicative of results to be expected for the full year ending December 28, 2024 or any other future period. In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows and stockholders’ equity. All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023. Certain immaterial prior period amounts have been reclassified to conform to current period presentation.

The Company uses a 52- or 53-week fiscal year ending on the last Saturday in December. The three months ended March 30, 2024 and April 1, 2023 each consisted of 13 weeks.

Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results are likely to differ from those estimates, and such differences may be material to the financial statements. Areas where management uses judgment include, but are not limited to, revenue allowances, inventory valuation, valuation of goodwill, long-lived and intangible assets, and income taxes.

Significant Accounting Policies. There have been no material changes to the Company’s significant accounting policies in Note 2 - Basis of Presentation and Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

NOTE 3 – Supplemental Financial Statement Information

Accounts Receivable, net

As of March 30, 2024 and December 30, 2023, Accounts receivable, net included unbilled accounts receivable of $1.6 billion and $1.1 billion, respectively. Unbilled accounts receivable primarily represents work completed on development services and on custom products for which revenue has been recognized but not yet invoiced. Unbilled accounts receivable that are included in Accounts receivable, net are expected to be billed and collected within 12 months.

Inventories			March 30, 2024						December 30, 2023
			(In millions)
Raw materials			$	292					$	279
Work in process			3,376						3,260
Finished goods			984						812
Total inventories			$	4,652					$	4,351

Property and Equipment, net			March 30, 2024						December 30, 2023
			(In millions)
Land, building and leasehold improvements			$	829					$	821
Equipment			2,456						2,346
Construction in progress			223						209
Property and equipment, gross			3,508						3,376
Accumulated depreciation			(1,884)						(1,787)
Total property and equipment, net			$	1,624					$	1,589

Accrued Liabilities			March 30, 2024						December 30, 2023
			(In millions)
Accrued marketing programs			$	761					$	827
Accrued compensation and benefits			826						884
Customer program liabilities			936						544
Other accrued liabilities			921						827
Total accrued liabilities			$	3,444					$	3,082

Revenue

Revenue allocated to remaining performance obligations that are unsatisfied (or partially unsatisfied) include amounts received from customers and amounts that will be invoiced and recognized as revenue in future periods for development services, IP licensing and product revenue. As of March 30, 2024, the aggregate transaction price allocated to remaining performance obligations under contracts with an original expected duration of more than one year was $113 million, of which $67 million is expected to be recognized in the next 12 months. The revenue allocated to remaining performance obligations does not include amounts which have an original expected duration of one year or less.

Revenue recognized over time associated with custom products and development services accounted for 16% and 29% of the Company’s revenue for the three months ended March 30, 2024 and April 1, 2023, respectively.

NOTE 4 – Segment Reporting

Management, including the Chief Operating Decision Maker (CODM), who is the Company’s Chief Executive Officer, reviews and assesses operating performance using segment net revenue and operating income (loss). These performance measures include the allocation of expenses to the reportable segments based on management’s judgment.

The Company’s four reportable segments are:

• the Data Center segment, which primarily includes server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs), Artificial Intelligence (AI) accelerators and Adaptive System-on-Chip (SoC) products for data centers;

• the Client segment, which primarily includes CPUs, APUs, and chipsets for desktop, notebook and handheld personal computers;

• the Gaming segment, which primarily includes discrete GPUs, and semi-custom SoC products and development services; and

• the Embedded segment, which primarily includes embedded CPUs, GPUs, APUs, FPGAs, System on Modules (SOMs), and Adaptive SoC products.

From time to time, the Company may also sell or license portions of its IP portfolio.

In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because the CODM does not consider these expenses and credits in evaluating the performance of the reportable segments. This category primarily includes amortization of acquisition-related intangibles, employee stock-based compensation expense, inventory loss at contract manufacturer, acquisition-related and other costs, and licensing gain. Acquisition-related and other costs primarily include transaction costs, purchase price adjustments for inventory, certain compensation charges, contract termination and workforce rebalancing charges.

The following table provides a summary of net revenue and operating income (loss) by segment:

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions)
Net revenue:
Data Center															$	2,337					$	1,295
Client															1,368						739
Gaming															922						1,757
Embedded															846						1,562
Total net revenue															$	5,473					$	5,353
Operating income (loss):
Data Center															$	541					$	148
Client															86						(172)
Gaming															151						314
Embedded															342						798
All Other(1)															(1,084)						(1,233)
Total operating income (loss)															$	36					$	(145)

(1)			For the three months ended March 30, 2024, all other operating losses primarily included $622 million of amortization of acquisition-related intangibles, $371 million of stock-based compensation expense, $65 million of inventory loss at contract manufacturer and $39 million of acquisition-related and other costs. For the three months ended April 1, 2023, all other operating losses primarily included $823 million of amortization of acquisition-related intangibles, $309 million of stock-based compensation expense and $111 million of acquisition-related and other costs.

NOTE 5 – Acquisition-related Intangible Assets

Acquisition-related intangibles were as follows:

			March 30, 2024																		December 30, 2023
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
			(In millions)																		(In millions)
Developed technology			$	13,390					$	(1,815)					$	11,575					$	13,390					$	(1,583)					$	11,807
Customer relationships			12,324						(4,127)						8,197						12,324						(3,755)						8,569
Customer backlog			809						(809)						—						809						(809)						—
Corporate trade name			65						(65)						—						65						(65)						—
Product trademarks			914						(165)						749						914						(147)						767
Identified intangible assets subject to amortization			27,502						(6,981)						20,521						27,502						(6,359)						21,143
In-process research and development (IPR&D) not subject to amortization			220						—						220						220						—						220
Total acquisition-related intangible assets			$	27,722					$	(6,981)					$	20,741					$	27,722					$	(6,359)					$	21,363

Developed technology and customer relationships were acquired primarily from the Xilinx acquisition on February 14, 2022. Acquisition-related intangible amortization expense was $622 million and $823 million for the three months ended March 30, 2024 and April 1, 2023, respectively.

Based on the carrying value of acquisition-related intangibles recorded as of March 30, 2024, and assuming no subsequent impairment of the underlying assets, the estimated annual amortization expense for acquisition-related intangibles is expected to be as follows:

Fiscal Year			(In millions)
Remainder of 2024			$	1,749
2025			2,145
2026			2,034
2027			1,922
2028			1,846
2029 and thereafter			10,825
Total			$	20,521

NOTE 6 – Related Parties — Equity Joint Ventures

ATMP Joint Ventures

The Company holds a 15% equity interest in two joint ventures (collectively, the ATMP JV) with affiliates of Tongfu Microelectronics Co., Ltd, a Chinese joint stock company. The Company has no obligation to fund the ATMP JV. The Company accounts for its equity interests in the ATMP JV under the equity method of accounting due to its significant influence over the ATMP JV.

The ATMP JV provides assembly, testing, marking and packaging (ATMP) services to the Company. The Company assists the ATMP JV in its management of certain raw material inventory. The purchases from and resales to the ATMP JV of inventory under the Company’s inventory management program are reported within purchases and resales with the ATMP JV and do not impact the Company’s condensed consolidated statements of operations.

The Company’s purchases from the ATMP JV during the three months ended March 30, 2024 and April 1, 2023 amounted to $450 million and $367 million, respectively. As of March 30, 2024 and December 30, 2023, the amounts payable to the ATMP JV were $438 million and $363 million, respectively, and are included in Payables to related parties on the Company’s condensed consolidated balance sheets. The Company’s resales to the ATMP JV during the three months ended March 30, 2024 and April 1, 2023 amounted to $40 million and $1 million, respectively. As of March 30, 2024 and December 30, 2023, the Company had receivables from the ATMP JV of $31 million and $9 million, respectively, included in Receivables from related parties on the Company’s condensed consolidated balance sheets.

During the three months ended March 30, 2024 and April 1, 2023, the Company recorded a gain of $7 million and $1 million, respectively, in Equity income in investee on its condensed consolidated statements of operations, respectively. As of March 30, 2024 and December 30, 2023, the carrying value of the Company’s investment in the ATMP JV was $106 million and $99 million, respectively.

THATIC Joint Ventures

The Company holds equity interests in two joint ventures (collectively, the THATIC JV) with Higon Information Technology Co., Ltd. (THATIC), a third-party Chinese entity. As of both March 30, 2024 and December 30, 2023, the carrying value of the investment was zero. The Company licensed certain of its intellectual IP (Licensed IP) to the THATIC JV and receives royalty based on sales of the THATIC JV’s products, which is recorded within operating income. During the three months ended March 30, 2024 and April 1, 2023, the Company recognized $13 million and $10 million of licensing gain from royalty income associated with Licensed IP, respectively. As of both March 30, 2024 and December 30, 2023, the Company had no receivables from the THATIC JV. In June 2019, the Bureau of Industry and Security of the United States Department of Commerce added certain Chinese entities to the Entity List, including THATIC and the THATIC JV. The Company is complying with U.S. law pertaining to the Entity List designation.

NOTE 7 – Debt and Revolving Credit Facility

Debt

The Company’s total debt as of March 30, 2024 and December 30, 2023 consisted of the following:

			March 30, 2024						December 30, 2023
			(In millions)
2.95% Senior Notes Due 2024 (2.95% Notes)			$	750					$	750
2.375% Senior Notes Due 2030 (2.375% Notes)			750						750
3.924% Senior Notes Due 2032 (3.924% Notes)			500						500
4.393% Senior Notes Due 2052 (4.393% Notes)			500						500
Total debt (principal amount)			2,500						2,500
Unamortized debt premium, discount and issuance costs, net			(32)						(32)
Total debt (net)			2,468						2,468
Less: current portion of long-term debt and related unamortized debt premium and issuance costs			(750)						(751)
Total long-term debt			$	1,718					$	1,717

2.95% Senior Notes Due 2024 and 2.375% Senior Notes Due 2030

The 2.95% Notes and 2.375% Notes are general unsecured senior obligations of the Company with semi-annual fixed interest payments due on June 1 and December 1.

3.924% Senior Notes Due 2032 and 4.393% Senior Notes Due 2052

The 3.924% Notes and 4.393% Notes are general unsecured senior obligations of the Company, semi-annual fixed interest payments due on June 1 and December 1. The 3.924% and 4.393% Notes are governed by the terms of an indenture dated June 9, 2022 between the Company and US Bank Trust Company, National Association as trustee.

The Company may redeem some or all of the 3.924% Notes and 4.393% Notes prior to March 1, 2032 and December 1, 2051, respectively, at a price equal to the greater of the present value of the principal amount and future interest through the maturity of the 3.924% Notes or 4.393% Notes or 100% of the principal amount plus accrued and unpaid interest. Holders have the right to require the Company to repurchase all or a portion of the 3.924% Notes or 4.393% Notes in the event that the Company undergoes a change of control as defined in the indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default may result in the acceleration of the maturity of the 3.924% Notes and 4.393% Notes.

Future Debt Payment Obligations

As of March 30, 2024, the Company’s future principal debt payment obligations were as follows:

Fiscal Year			(In millions)
Remainder of 2024			$	750
2025-2028			—
2029 and thereafter			1,750
Total			$	2,500

Revolving Credit Facility

The Company has $3.0 billion available under a revolving credit agreement that expires on April 29, 2027 (Revolving Credit Agreement). As of March 30, 2024 and December 30, 2023, the Company had no outstanding borrowings under the Revolving Credit Agreement. Revolving loans under the Revolving Credit Agreement can be either Secure Overnight Financing Rate (SOFR) Loans or Base Rate Loans (each as defined in the Revolving Credit Agreement) at the Company's option. Each SOFR Loan will bear interest at a rate per annum equal to the applicable SOFR plus a margin between 0.625% and 1.250%. Each Base Rate Loan will bear interest equal to the Base Rate plus a margin between 0.000% and 0.250%. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to environmental sustainability, specifically greenhouse gas emissions. The Revolving Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default applicable to the Company and its subsidiaries. As of March 30, 2024, the Company was in compliance with these covenants.

Commercial Paper

On November 3, 2022, the Company established a commercial paper program, under which the Company may issue unsecured commercial paper notes up to a maximum principal amount outstanding at any time of $3.0 billion with a maturity of up to 397 days from the date of issue. The commercial paper will be sold at a discount from par or, alternatively, will be sold at par and bear interest at rates that will vary based on market conditions at the time of issuance. During the three months ended March 30, 2024 and April 1, 2023, the Company did not issue any commercial paper under the program and as of March 30, 2024 and December 30, 2023, the Company had no commercial paper outstanding.

NOTE 8 – Financial Instruments

Fair Value Measurements

The Company’s financial instruments are measured and recorded at fair value on a recurring basis, except for non-marketable equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred.

Financial Instruments Recorded at Fair Value on a Recurring Basis

			March 30, 2024																		December 30, 2023
(In millions)			Level 1						Level 2						Total						Level 1						Level 2						Total
Cash equivalents
Money market funds			$	1,051					$	—					$	1,051					$	969					$	—					$	969
Corporate debt securities			—						1,472						1,472						—						753						753
U.S. government and agency securities			573						—						573						1,252						—						1,252
Non-U.S. government and agency securities			—						70						70						—						135						135
Time deposits and certificates of deposits			—						166						166						—						205						205
Short-term investments
Corporate debt securities			—						526						526						—						506						506
Time deposits and certificates of deposits			—						10						10						—						9						9
Asset-backed and mortgage-backed securities			—						33						33						—						34						34
U.S. government and agency securities			1,158						41						1,199						1,209						28						1,237
Non-U.S. government and agency securities			—						77						77						—						54						54
Other non-current assets
Deferred compensation plan investments			147						—						147						133						—						133
Total assets measured at fair value			$	2,929					$	2,395					$	5,324					$	3,563					$	1,724					$	5,287

Deferred compensation plan investments are primarily mutual fund investments held in a Rabbi trust established to maintain the Company’s executive deferred compensation plan.

The following is a summary of cash equivalents and short-term investments:

			March 30, 2024																								December 30, 2023
			Cost/ Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value						Cost/ Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
			(in millions)																								(in millions)
Asset-backed and mortgage-backed securities			$	35					$	—					$	(2)					$	33					$	35					$	—					$	(2)					$	33
Corporate debt securities			1,998						—						—						1,998						1,259						—						—						1,259
Money market funds			1,051						—						—						1,051						969						—						—						969
Time deposits and certificates of deposits			176						—						—						176						214						—						—						214
U.S. government and agency securities			1,772						—						—						1,772						2,487						3						—						2,490
Non-U.S. government and agency securities			147						—						—						147						189						—						—						189
			$	5,179					$	—					$	(2)					$	5,177					$	5,153					$	3					$	(2)					$	5,154

As of March 30, 2024 and December 30, 2023, the Company did not have material available-for-sale debt securities which had been in a continuous unrealized loss position of more than twelve months.

The contractual maturities of cash equivalents and investments classified as available-for-sale are as follows:

			March 30, 2024												December 30, 2023
			Amortized Cost						Fair Value						Amortized Cost						Fair Value
			(In millions)												(In millions)
Due within 1 year			$	3,638					$	3,637					$	3,792					$	3,792
Due in 1 year through 5 years			459						459						361						364
Due in 5 years and later			31						30						32						30
			$	4,128					$	4,126					$	4,185					$	4,186

Financial Instruments Not Recorded at Fair Value

The Company carries its financial instruments at fair value except for its debt. The carrying amounts and estimated fair values of the Company’s debt are as follows:

			March 30, 2024												December 30, 2023
			Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
			(In millions)												(In millions)
Current portion of long-term debt, net			$	750					$	747					$	751					$	741
Long-term debt, net of current portion			$	1,718					$	1,570					$	1,717					$	1,630

The estimated fair value of the Company’s long-term debt is based on Level 2 inputs of quoted prices for the Company’s debt and comparable instruments in inactive markets.

The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing terms.

Financial Instruments Measured at Fair Value on a Non-Recurring Basis

The Company’s investments in non-marketable securities in privately-held companies are recorded using a measurement alternative that adjusts the securities to fair value when the Company recognizes an observable price adjustment or an impairment. As of March 30, 2024 and December 30, 2023, the Company had non-marketable securities in privately-held companies of $156 million and $155 million, respectively, that are recorded under Other non-current assets in the balance sheet. Impairment losses or observable price adjustments were not material during the three months ended March 30, 2024 and April 1, 2023.

Hedging Transactions and Derivative Financial Instruments

Foreign Currency Forward Contracts Designated as Accounting Hedges

The Company enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate risk related to future forecasted transactions denominated in currencies other than the U.S. Dollar. These contracts generally mature within 24 months and are designated as accounting hedges. As of March 30, 2024 and December 30, 2023, the notional value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges was $2.2 billion and $2.4 billion, respectively. The fair value of these contracts, recorded as a liability, was $14 million as of March 30, 2024 and as an asset of $6 million as of December 30, 2023.

Foreign Currency Forward Contracts Not Designated as Accounting Hedges

The Company also enters into foreign currency forward contracts to reduce the short-term effects of foreign currency fluctuations on certain receivables or payables denominated in currencies other than the U.S. Dollar. These forward contracts generally mature within 3 months and are not designated as accounting hedges. As of March 30, 2024 and December 30, 2023, the notional value of these outstanding contracts was $803 million and $568 million, respectively. The fair value of these contracts was not material as of March 30, 2024 and December 30, 2023.

NOTE 9 – Earnings Per Share

The following table sets forth the components of basic and diluted earnings per share:

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions, except per share amounts)
Numerator
Net income (loss) for basic earnings per share															$	123					$	(139)
Denominator
Basic weighted average shares															1,617						1,611
Potentially dilutive shares from employee equity plans															22						—
Diluted weighted average shares															1,639						1,611
Earnings (loss) per share:
Basic															$	0.08					$	(0.09)
Diluted															$	0.07					$	(0.09)

Securities which would have been anti-dilutive are not material and are excluded from the computation of diluted earnings per share for all periods presented.

NOTE 10 – Common Stock and Employee Equity Plans

Common Stock

Shares of common stock outstanding were as follows:

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions)
Balance, beginning of period															1,616						1,612
Common stock issued under employee equity plans															3						1
Common stock repurchases for tax withholding on equity awards															(1)						(1)
Repurchases of common stock															—						(3)
Balance, end of period															1,618						1,609

Stock Repurchase Program

The Company has an approved stock repurchase program authorizing repurchases of up to $12 billion of the Company’s common stock (Repurchase Program). During the three months ended March 30, 2024, the Company returned $4 million to shareholders through the repurchase of its common stock under the Repurchase Program. As of March 30, 2024, $5.6 billion remains available for future stock repurchases under the Repurchase Program. The Repurchase Program does not obligate the Company to acquire any common stock, has no termination date and may be suspended or discontinued at any time.

Stock-based Compensation

Stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows:

									Three Months Ended
															March 30, 2024						April 1, 2023
															(In millions)
Cost of sales															$	6					$	8
Research and development															279						214
Marketing, general and administrative															86						87
Total															$	371					$	309

NOTE 11 – Income Taxes

The Company determines its income taxes for interim reporting periods by applying the Company’s estimated annual effective tax rate to the year-to-date results, adjusted for tax items discrete to each period.

For the three months ended March 30, 2024, the Company recorded an income tax benefit of $52 million representing an effective tax rate of (73.2)%. The difference between the U.S. federal statutory tax rate of 21% and the Company's estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived intangible income (FDII) and research and development (R&D) tax credits. In addition, the tax benefit reflected discrete income tax benefits of $61 million, primarily related to stock-based compensation.

For the three months ended April 1, 2023, the Company recorded an income tax provision of $13 million representing an effective tax rate of (10.3)%. The difference between the U.S. federal statutory tax rate of 21% and the Company's estimated annual effective tax rate was primarily due to a higher mix of income taxed in lower tax rate jurisdictions, R&D tax credits, and beneficial rate impact from FDII tax benefit. In addition, the tax provision reflected discrete tax expense related to interest and penalties accrued for uncertain tax position.

As of March 30, 2024 and December 30, 2023, the Company had long-term income tax liabilities of $1.5 billion and $1.6 billion recorded under Other long-term liabilities in the balance sheet, respectively.

NOTE 12 – Commitments and Contingencies

Commitments

The Company’s purchase commitments primarily include obligations to purchase wafers and substrates from third parties. These purchase obligations were made under noncancellable purchase orders or contractual obligations requiring minimum purchases for which cancellation would lead to significant penalties. Purchase commitments also include future payments related to certain software, technology and IP licenses.

Total future unconditional purchase commitments as of March 30, 2024 were as follows:

Fiscal Year			(In millions)
Remainder of 2024			$	3,278
2025			348
2026			182
2027			44
2028			46
2029 and thereafter			94
Total unconditional purchase commitments			$	3,992

On an ongoing basis, the Company works with suppliers on timing of payments and deliveries of purchase commitments, taking into account business conditions.

Contingencies

During the quarterly period ended March 30, 2024, there were no material legal proceedings. The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With respect to these matters, based on management’s current knowledge, the Company believes that the amount or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company’s financial position, results of operations, or cash flows.