AMD 2002 Annual Report Download - page 60

Table of Contents
Bulletin No. 51, “Consolidated Financial Statements,” defines what these variable interest entities are and provides guidelines on how to identity them and also
on how an enterprise should assess its interests in a variable interest entity to decide whether to consolidate that entity. Generally, FIN 46 applies to variable
interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. For existing variable
interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003, the provision of this interpretation will apply no later
than the beginning of the first interim or annual reporting period beginning after June 15, 2003. Currently, the Company does not have any variable interest
entities and the Company does not expect the adoption of FIN 46 will have a material impact on the Company’s results of operations or financial condition.
NOTE 3: Sale of Subsidiary
The Company sold 90 percent of Legerity for approximately $375 million in cash to Francisco Partners, L.P., effective July 31, 2000. Prior to the sale,
Legerity was a wholly owned subsidiary of AMD, selling voice communications products. The Company’s pre-tax gain on the sale of Legerity was $337 million.
The gain was computed based on the excess of the consideration received for Legerity’s net assets as of July 31, 2000, less direct expenses related to the sale.
The applicable tax rate on the gain was 37 percent resulting in an after-tax gain of $212 million.
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003