AMD 2014 Annual Report Download - page 93

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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 $2 million in 2014, less than $.01 per share, diluted. The net impact of tax
holidays decreased the Company’s net loss by $1 million in 2013, less than $.01 per share, diluted, and decreased
the Company’s net loss by $11 million in 2012, less than $.02 per share, diluted.
A reconciliation of the gross unrecognized tax benefits is as follows:
2014 2013 2012
(In millions)
Balance at beginning of year ....................................... $ 52 $ 56 $69
Increases for tax positions taken in prior years ......................... 1 1 3
Decreases for tax positions taken in prior years ........................ — (2) (4)
Increases for tax positions taken in the current year ..................... 2 4 3
Decreases for settlements with taxing authorities ....................... (27) (7) (15)
Balance at end of year ............................................ $ 28 $ 52 $56
The amount of unrecognized tax benefits that would impact the effective tax rate was $3 million, $3 million
and $2 million as of December 27, 2014, December 28, 2013 and December 29, 2012, respectively. The
Company had no or immaterial amounts of accrued interest and no accrued penalties related to unrecognized tax
benefits as of December 27, 2014, December 28, 2013 and December 29, 2012. The Company recognizes the
accrued interest and penalties to unrecognized tax benefits as interest expense and income tax expense,
respectively.
During the 12 months beginning December 28, 2014, the Company expects to reduce its unrecognized tax
benefits by $7 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 27, 2014, the Canada Revenue Agency, or CRA, had completed its audit of ATI for the
years 2005 through 2007 and issued its final Notice of Assessment, which the Company has reviewed and agreed
to. The CRA is currently auditing international transactions for the years 2008 through 2010. As of December 27,
2014, the Italian tax authorities are currently conducting their audit of the Company’s subsidiaries’ activities in
Italy for the years 2003 through 2013. The Company is in the process of providing documentation in response to
the inquiries. 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 27, 2014.
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