AMD 2014 Annual Report Download - page 80

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Potential shares from outstanding stock options, restricted stock and restricted stock units totaling
approximately 48 million, 59 million and 45 million for 2014, 2013 and 2012, respectively, were not included in
the net loss per share calculations as their inclusion would have been anti-dilutive.
Potential shares issuable under the Company’s 5.75% Convertible Senior Notes due 2012 (5.75% Notes)
totaling 15 million for 2012 were not included in the net loss per share calculations as their inclusion would have
been anti-dilutive. The 5.75% Notes were fully repaid on August 15, 2012.
Accumulated Other Comprehensive Loss. Unrealized holding gains or losses on the Company’s available-
for-sale securities, unrealized holding gains and losses on derivative financial instruments qualifying as cash flow
hedges and changes in minimum pension liabilities are included in other comprehensive loss.
The table below summarizes the changes in accumulated other comprehensive loss by component for the
years ended December 27, 2014 and December 28, 2013:
December 27,
2014
December 28,
2013
Unrealized
gains (losses)
on available-
for-sale
securities
Unrealized
gains (losses)
on cash flow
hedges Total
Unrealized
gains (losses)
on available-
for-sale
securities
Unrealized
gains (losses)
on cash flow
hedges Total
(In millions)
Beginning balance ............... $ 1 $(3) $(2) — $ (3) $(3)
Unrealized gains (losses) arising
during the period, net of tax
effects ................... — (9) (9) (1) (6) (7)
Reclassification adjustment for
(gains) losses realized and
included in net loss, net of tax
effects ................... — 6 6 2 6 8
Total other comprehensive income
(loss) ........................ — (3) (3) 1 — 1
Ending balance .................. $ 1 $(6) $(5) $ 1 $ (3) $(2)
Stock-Based Compensation. The Company estimates stock-based compensation cost for stock options at
the grant date based on the option’s fair-value as calculated by the lattice-binomial option-pricing model. For
restricted stock and restricted stock units, fair value is based on the closing price of the Company’s common
stock on the grant date. The Company estimates the grant-date fair value of stock options, restricted stock and
restricted stock units that involve a market condition using a Monte Carlo simulation model. The expense is
recognized using the single option method which is ratable on a straight-line basis over the requisite service
period.
The application of the lattice-binomial option-pricing model requires the use of extensive actual employee
exercise behavior data and the use of a number of complex assumptions including expected volatility of the
Company’s common stock, risk-free interest rate and expected dividends. Significant changes in any of these
assumptions could materially affect the fair value of stock options granted in the future.
Forfeiture rates are estimated at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates in order to derive the Company’s best estimate of awards ultimately
expected to vest.
Recently Issued Accounting Standards
Disclosure of Going Concern Uncertainties. In August 2014, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability
74