AMD 2009 Annual Report Download - page 81

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simultaneously with the transfer of our limited partnership interests in AMD and BAC to GF, AMTC would
assume Toppan Germany’s obligations under the BAC lease agreement without AMD assuming any additional
guarantee for such rental payments.
Discontinued Operations
In 2008, we evaluated the viability of our non-core businesses and determined that our Digital Television
business unit was not directly aligned with our core strategy of computing and graphics market opportunities and
we decided to divest this business unit.
We performed an interim impairment test of goodwill and acquired intangible assets during 2008. We
concluded that the carrying amounts of goodwill and certain acquisition-related intangible assets associated with
the Digital Television business unit were impaired, and we recorded an impairment charge of $473 million.
During the third quarter of 2008, we entered into an agreement with Broadcom Corporation to sell the
Digital Television business unit for $141.5 million. The transaction was completed on October 27, 2008. Based
on the final terms of the sale transaction, we recorded an additional goodwill impairment charge of $135 million.
As a result of the decisions and transactions described above, pursuant to applicable accounting guidance, the
operating results of the Digital Television business unit are presented as discontinued operations in the
consolidated statements of operations for all periods presented. Cash flows from discontinued operations were
not material and were combined with cash flows from continuing operations within the consolidated statement of
cash flows categories.
The results from discontinued operations for our former Digital Television business unit were as follows:
2009 2008 2007
(In millions)
Net revenue .............................................................. $— $ 73 $155
Expenses ................................................................ (3) (147) (230)
Impairment of goodwill and acquired intangible assets ............................ — (609) (476)
Restructuring charges ...................................................... — (1) —
Loss from discontinued operations ............................................ $ (3) $(684) $(551)
Recently Issued Accounting Pronouncements
Variable Interest Entities. In June 2009, the FASB issued guidance that amends the evaluation criteria to
identify the primary beneficiary of a variable interest entity. Additionally, this guidance requires ongoing
reassessments of whether an enterprise is the primary beneficiary of the variable interest entity. This guidance is
effective for interim and annual reporting periods after November 15, 2009. We adopted this new guidance as of
the beginning of fiscal year 2010 and we have applied such guidance in evaluating whether we should continue
to consolidate GF given the changes in governance over the operations of GF that occurred effective
December 28, 2009. See Note 3 of Notes to Consolidated Financial Statements. Based on our analysis, beginning
the first day of fiscal 2010, we will deconsolidate GF and account for GF under the equity method of accounting.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our
investment portfolio and long-term debt. We usually invest our cash in investments with short maturities or with
frequent interest reset terms. Accordingly, our interest income fluctuates with short-term market conditions. As
of December 26, 2009, our investment portfolio consisted primarily of money market funds and ARS. With the
exception of our ARS, these investments were highly liquid. Due to the short-term nature of our investment
portfolio and the current low interest rate environment, our exposure to interest rate risk is minimal.
As of December 26, 2009, the majority of our outstanding debt, including GF debt, is fixed interest rate
debt. Beginning in the first quarter of 2010, we will no longer consolidate the financial results of GF, and
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