AMD 2009 Annual Report Download - page 93

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Foreign Subsidies. The Company receives or has received investment grants and allowances from the
Federal Republic of Germany and the State of Saxony in connection with the construction and operation of GF’s
Fab 1 Module 2 (formerly Fab30/ 38) and GF’s Fab 1 Module 1 (formerly Fab 36) in Dresden, Germany.
Generally, such grants are subject to forfeiture in declining amounts over the life of the agreement, if the
Company does not maintain certain levels of employment or meet other conditions specified in the relevant grant
documents. Investment allowances have to be fully repaid if the binding period of investment or other conditions
specified in the Investment Allowance Act are not met. Accordingly, amounts granted are initially recorded as a
receivable until cash proceeds are received. In the period the grant receivable is recorded, a current and long-term
liability is also recorded which is subsequently amortized as a reduction to cost of sales. Allowances related to
GF’s Fab 1 Module 1 and GF’s Fab 1 Module 2 are being amortized to operations ratably over the lives of the
underlying assets associated with the allowances. Grants related to GF’s Fab 1 Module 1 are being amortized to
operations ratably through December 2014.
From time to time, the Company also applies for subsidies relating to certain research and development
projects. These research and development subsidies are recorded as a reduction of research and development
expenses when all conditions and requirements set forth in the subsidy grant are met.
Marketing, Communications and Advertising Expenses. Marketing, communications, and advertising
expenses for fiscal 2009, 2008 and 2007 were approximately $313 million, $520 million and $555 million,
respectively. Cooperative advertising funding obligations under customer incentive programs are accrued and the
costs recorded upon agreement with customers and vendor partners. Cooperative advertising expenses are
recorded as marketing, general and administrative expense to the extent the cash paid does not exceed the fair
value of the advertising benefit received. Any excess of cash paid over the fair value of the advertising benefit
received is recorded as a reduction of revenue.
Net Income (Loss) Per Share. Basic net income (loss) attributable to AMD common stockholders per
share is computed using the weighted-average number of common shares outstanding and shares issuable upon
exercise of the Warrants issued by the Company to WCH in connection with the GF transaction. The Warrants
became exercisable for a nominal consideration upon the July 24, 2009 public ground-breaking of GF’s planned
manufacturing facility in New York. Accordingly, the 35 million shares of AMD common stock issuable upon
the exercise of the Warrants have been included in the weighted-average basic per share computations from that
date forward. (See Note 3, “GLOBALFOUNDRIES”).
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