AMD 2013 Annual Report Download - page 97

The Company’s operations in Malaysia currently operate under a tax holiday, which will expire in 2018.
This tax holiday may be extended if specific conditions are met. The net impact of the tax holiday was to
decrease the Company’s net loss by $1 million in 2013, less than $.01 per share, diluted. The net impact of tax
holidays decreased the Company’s net loss by $11 million in 2012, less than $.02 per share, diluted, and
increased the Company’s net income by $9 million in 2011, less than $.01 per share, diluted.
A reconciliation of the gross unrecognized tax benefits is as follows:
2013 2012 2011
(In millions)
Balance at beginning of year ......................................... $56 $69 $42
Increases for tax positions taken in prior years ........................... 1 3 28
Decreases for tax positions taken in prior years .......................... (2) (4) (4)
Increases for tax positions taken in the current year ....................... 4 3 8
Decreases for settlements with taxing authorities ......................... (7) (15) (5)
Balance at end of year .............................................. $52 $56 $69
The amount of unrecognized tax benefits that would impact the effective tax rate was $3 million, $2 million,
and $4 million as of December 28, 2013, December 29, 2012 and December 31, 2011, respectively. The
Company had no accrued interest related to unrecognized tax benefits as of December 28, 2013 and accrued
interest related to unrecognized tax benefits of $2 million as of December 29, 2012 and December 31, 2011. The
Company had no accrued penalties related to unrecognized tax benefits as of December 28, 2013, December 29,
2012 and December 31, 2011. The Company recognizes potential accrued interest and penalties to unrecognized
tax benefits as interest expense and income tax expense, respectively.
The Company recorded a reduction of interest expense of $2 million and no charge related to penalty
expense in its consolidated statement of operations in 2013. The Company had no charge related to interest
expense or penalty expense in its consolidated statement of operations in 2012. The Company recorded a
reduction of interest expense of $2 million and a decrease of $1 million of penalty expense in its consolidated
statement of operations in 2011. During the 12 months beginning December 29, 2013, the Company expects to
reduce its unrecognized tax benefits by $31 million primarily as a result of the settlement of tax audits with
certain foreign tax authorities. The Company does not believe it is reasonably possible that other unrecognized
tax benefits will materially change in the next 12 months. However, the resolutions and/or closure of open audits
are highly uncertain.
As of December 25, 2010, the Canada Revenue Agency, or CRA, had completed its audit of ATI for the
years 2000 through 2004 and issued its final Notice of Assessment. The CRA is currently auditing international
transactions for the years 2005 through 2010. During the second quarter of 2010 the U.S. Internal Revenue
Service completed its audit of the U.S. Federal income tax returns for the years ending 2004 through 2006
inclusive. As of December 31, 2011 the German tax authorities completed their audit of the Company’s former
German subsidiaries for the tax years 2004 through 2007. The German tax authorities conducted an audit for the
tax years 2008 through 2011 in 2013. The Company is not currently aware of any adjustments as a result of this
audit. The Company and its subsidiaries have several foreign, foreign provincial, and U.S. state audits in process
at any one point in time. The Company has provided for uncertain tax positions that require a liability under the
adopted method to account for uncertainty in income taxes. The Company has not recognized any current or
long-term deferred tax assets under a valuation allowance as a result of the application of uncertainty in income
taxes in ASC 740 for unrecognized tax benefits as of December 28, 2013.
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