AMD 2011 Annual Report Download - page 85

In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350)—
Testing Goodwill for Impairment (revised topic). The revised standard is intended to reduce the cost and
complexity of the annual goodwill impairment test by providing entities an option to perform a “qualitative”
assessment to determine whether further impairment testing is necessary. The revised standard is effective for
annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The
Company adopted this standard during the first quarter of 2012. The adoption of this standard will not materially
impact the Company’s consolidated financial statements.
NOTE 3: GLOBALFOUNDRIES
Formation and Accounting in 2009
On March 2, 2009, the Company consummated the transactions contemplated by the Master Transaction
Agreement among the Company, Advanced Technology Investment Company LLC (ATIC), a limited liability
company established under the laws of the Emirate of Abu Dhabi and wholly owned by the Government of the
Emirate of Abu Dhabi, and WCH, acting through its general partner, West Coast Hitech G.P., Ltd., a corporation
organized under the laws of the Cayman Islands, pursuant to which the Company formed GF. At the closing of
these transactions (Closing), the Company contributed certain assets and liabilities to GF, including, among other
things, shares of the groups of German subsidiaries owning Fab 1 Module 1 (formerly Fab 36) and Fab 1 Module
2 (formerly Fab 30/38) (Dresden Subsidiaries), certain manufacturing assets, real property, tangible personal
property, employees, inventories, books and records, a portion of the Company’s patent portfolio, intellectual
property and technology, rights under certain material contracts and authorizations necessary for GF to carry on
its business. In exchange, the Company received GF securities consisting of one Class A Ordinary Share,
1,090,950 Class A Preferred Shares and 700,000 Class B Preferred Shares, and the assumption of certain
liabilities by GF. ATIC contributed $1.4 billion of cash to GF in exchange for GF securities consisting of one
Class A Ordinary Share, 218,190 Class A Preferred Shares, 172,760 Class B Preferred Shares, $202 million
aggregate principal amount of 4% Class A Subordinated Convertible Notes (the Class A Notes) and $807 million
aggregate principal amount of 11% Class B Subordinated Convertible Notes (the Class B Notes), and transferred
$700 million of cash to the Company in exchange for the transfer by the Company of 700,000 GF Class B
Preferred Shares.
At the Closing, the Company also issued to WCH, for an aggregate purchase price of $125 million,
58 million shares of its common stock and warrants to purchase 35 million shares of its common stock at an
exercise price of $0.01 per share (the Warrants). The Warrants are currently exercisable and expire on March 2,
2019. The shares issuable under these Warrants have been included in the Company’s basic and diluted earnings
per share (EPS) calculation since the third quarter of 2009 when the Warrants became exercisable. The Company
classifies the Warrants as permanent equity in the consolidated balance sheet.
Under the Master Transaction Agreement, the cash consideration that WCH and ATIC paid and the
securities that they received are as follows:
• Cash paid by WCH to AMD for the purchase of 58 million shares of AMD common stock and
Warrants: $125 million;
• Cash paid by ATIC to GF for the aggregate principal amount of Class A Notes, which are convertible
into 201,810 Class A Preferred Shares: $202 million;
• Cash paid by ATIC to GF for the aggregate principal amount of Class B Notes, which are convertible
into 807,240 Class B Preferred Shares: $807 million;
• Cash paid by ATIC to GF for 218,190 Class A Preferred Shares: $218 million;
• Cash paid by ATIC to GF for 172,760 Class B Preferred Shares: $173 million; and
• Cash paid by ATIC to AMD for 700,000 Class B Preferred Shares: $700 million.
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