AMD 2009 Annual Report Download - page 122

date ($41 million) and the amount of the debt discount written off in connection with the November 2008
repurchase of the 6.00% Notes allocated to the debt component ($6 million).
(2) The effect of the change on paid-in capital at December 27, 2008 includes the discount determined as of the
original issuance date of the 6.00% Notes ($259 million) less the portion of the original debt issuance costs
in proportion to amounts allocated to equity ($4 million).
(3) The effect of the change on retained earnings (deficit) at December 27, 2008 includes the amortization of
the discount from the issuance date ($41 million) and an adjustment to the previously reported gain on the
November 2008 repurchase of the 6.00% Notes ($5 million).
NOTE 12: Intel Settlement
On November 12, 2009, Intel Corporation and the Company entered into an agreement to end all
outstanding legal disputes between the companies including antitrust litigation and patent cross license
disputes. Under the terms of the agreement:
• The Company and Intel agreed to a new 5-year patent cross license agreement that gives the Company
broad rights and the freedom to operate a business utilizing multiple foundries;
• Intel and the Company gave up any claims of breach from the previous license agreement;
• Intel paid the Company $1.25 billion;
• Intel agreed to abide by a set of business practice provisions going forward;
• The Company dropped all pending litigation, including the case in U.S. District Court in Delaware and
two cases pending in Japan; and
• The Company withdrew all of its regulatory complaints worldwide.
This settlement satisfies all past antitrust litigation and disputes and there are no future obligations (e.g., the
patent cross license agreement represents fully paid up licenses by both the Company and Intel for which no
future payments or delivery is required) that the Company would need to perform to earn this settlement
payment. Accordingly, the Company has recognized the entire settlement amount in its fiscal 2009 operating
results.
NOTE 13: Supplemental Statement of Operations Information
Gain on sale of 200 millimeter equipment and the license of related process technology
During 2008, in conjunction with the conversion of Fab 30, our former manufacturing facility in Dresden,
Germany from 200 millimeter to 300 millimeter fabrication, the Company sold certain 200 millimeter
manufacturing equipment and licensed certain process technology to a third party. The Company evaluated this
multiple-element arrangement and determined that each component was considered a separate unit of accounting.
In addition, the transaction consideration was allocated to each unit based on their relative fair values.
Upon delivery of a majority of the manufacturing equipment to the applicable third party, the Company
recognized a gain of approximately $167 million, which is classified in the caption “Gain on sale of 200
millimeter equipment” in the Company’s 2008 consolidated statement of operations. The difference between the
$167 million gain recognized in the transaction described above and the $193 million gain shown in the
consolidated statement of operations for 2008 represents gains recognized on sale of other 200 millimeter
equipment to other third parties. In addition, the Company deferred recognizing approximately $49 million of
payments received pending the future delivery of the remaining manufacturing equipment. Upon delivery of the
process technology, the Company recognized revenue of approximately $191 million, which is included in the
caption “Net revenue” in the Company’s 2008 consolidated statement of operations. During 2009, there has been
no activity related to the sale of 200 millimeter equipment and the deferred gain of $47 million classified in the
caption “Other long-term liabilities” on the Company’s consolidated balance sheets.
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