AMD 1997 Annual Report Download - page 72

ADVANCED MICRO DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 28, 1997, DECEMBER 29, 1996 AND DECEMBER 31, 1995
1. NATURE OF OPERATIONS
AMD (the Company) is a semiconductor manufacturer with manufacturing
facilities in the U.S. and Asia and sales offices throughout the world. The
Company's products include a wide variety of industry-standard integrated
circuits (ICs) which are used in many diverse product applications such as
telecommunications equipment, data and network communications equipment,
consumer electronics, personal computers (PCs) and workstations.
Vantis Corporation (Vantis), a wholly owned subsidiary of the Company,
designs, develops and markets programmable logic devices (PLDs). On September
29, 1997, the Company transferred certain of the assets and liabilities of the
PLD division of the Company (excluding bipolar products) to Vantis.
2. BUSINESS COMBINATION
On January 17, 1996, the Company acquired NexGen, Inc. (NexGen) in a tax-
free reorganization in which NexGen was merged directly into the Company. At
the date of the merger, the Company reserved approximately 33.6 million total
shares to be exchanged, which represented eight-tenths (0.8) of a share of the
common stock of AMD for each share of the common stock of NexGen outstanding
or subject to an assumed warrant or option. The merger has been accounted for
under the pooling-of-interests method. The Consolidated Financial Statements
have been prepared to give retroactive effect to the merger of NexGen with and
into AMD on January 17, 1996.
Prior to its merger with AMD, NexGen reported on a fiscal year ending June
30. In the accompanying Consolidated Financial Statements and the Notes
thereto, NexGen financial position and operating results for 1995, which were
restated to a December 31, 1995 year-end, have been combined with the
Company's financial position and operating results as of and for the year
ended December 31, 1995.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year. The Company uses a 52- to 53-week fiscal year ending on the
last Sunday in December, which resulted in a 52-week year ended December 28,
1997. This compares with a 52-week fiscal year for 1996 and a 53-week fiscal
year for 1995, which ended on December 29 and December 31, respectively.
Principles of Consolidation. The Consolidated Financial Statements include
the accounts of the Company and its subsidiaries. Upon consolidation, all
significant intercompany accounts and transactions are eliminated. Also
included in the financial statements of the Company, under the equity method
of accounting, is the Company's 49.992 percent investment in Fujitsu AMD
Semiconductor Limited (FASL).
Foreign Currency Translation. Translation adjustments resulting from the
process of translating into U.S. dollars the foreign currency financial
statements of the Company's wholly owned foreign subsidiaries for which the
U.S. dollar is the functional currency are included in operations. The
translation adjustments relating to the translation of the Company's German
wholly owned subsidiary in Dresden, in the State of Saxony (Dresden Fab 30),
and the Company's unconsolidated joint venture, for which the local currencies
are the functional currencies, are included in stockholders' equity.
Cash Equivalents. Cash equivalents consist of financial instruments which
are readily convertible to cash and have original maturities of three months
or less at the time of acquisition.
Investments. The Company classifies, at the date of acquisition, its
marketable debt and equity securities into held-to-maturity and available-for-
sale categories in accordance with the provisions of the Statement of
F-7
Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998