AMD 2005 Annual Report Download - page 41

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Table of Contents
FINANCIAL CONDITION
Our cash, cash equivalents and short-term investments at December 25, 2005 totaled $1.8 billion.
Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities was approximately $1.5 billion in 2005. Net income of $165 million, adjusted for non-cash charges consisting
primarily of $1.2 billion of depreciation and amortization expense, a non-cash charge of approximately $110 million that we incurred as a result of the dilution of
our ownership in Spansion from 60 percent to 37.9 percent as a result of Spansion’s IPO, and a non-cash charge of $16 million in connection with our write-off
of goodwill that was generated as of June 30, 2003 as a result of the formation of Spansion LLC, contributed to the positive cash flows from operations. The net
changes in operating assets in 2005 compared to 2004 included an increase in accounts receivable due to higher net sales and decreased inventories due primarily
to the deconsolidation of Spansion’s results of operations from ours as a result of Spansion’s IPO.
Net cash provided by operating activities was approximately $1.1 billion in 2004. Net income of $91 million, adjusted for non-cash charges consisting
primarily of $1.2 billion of depreciation and amortization expense and $32 million associated with our exchange of $201 million of our 4.50% Notes for common
stock in the fourth quarter of 2004, contributed to the positive cash flows from operations. The net changes in operating assets in 2004 as compared to 2003
included an increase in accounts receivable due to higher net sales, and increased inventories due primarily to an increase in microprocessor inventories resulting
from a higher percentage of AMD64-based processors and improved market conditions. For 2004, Fujitsu accounted for approximately 23 percent of our
consolidated accounts receivable and approximately 22 percent of our consolidated gross sales.
Net cash provided by operating activities was approximately $296 million in 2003. Although we had a net loss of $274 million for the year, adjustments
for non-cash charges, which were primarily depreciation and amortization, resulted in a positive cash flow from operations. The net changes in operating assets
in 2003 as compared to 2002 included an increase in accounts receivable due to higher net sales and the consolidation of Spansion’s results of operations, which
include Spansion’s sales to Fujitsu, and an increase in net inventory due to the consolidation of Spansion’s results of operations. For 2003, Fujitsu accounted for
approximately 31 percent of our consolidated accounts receivable and approximately 13 percent of our consolidated gross sales. In 2003, the net changes in
payables and accrued liabilities primarily included payments of $90 million for a technology license from IBM and approximately $64 million of payments under
the 2002 Restructuring Plan.
Net Cash Provided by (Used in) Investing Activities
Net cash used in investing activities was $2.3 billion in 2005, primarily as a result of $1.5 billion used to purchase property, plant and equipment,
including approximately $726 million used to construct Fab 36, and a net cash outflow of $726 million from maturities and purchases of available-for-sale
securities, including a purchase of $175 million aggregate principal amount of Spansion’s 12.75% Senior Subordinated Notes Due 2016 (Spansion Senior Notes)
for approximately $158.9 million, partially offset by $261 million in proceeds from Spansion’s repayment of amounts outstanding under promissory notes to us
and $133 million cash decrease due to the deconsolidation of Spansion’s results of operations from ours.
Net cash used in investing activities was $1.6 billion in 2004, primarily as a result of $1.4 billion used to purchase property, plant and equipment,
including approximately $569 million used to construct Fab 36, and a net cash outflow of $150 million from maturities and purchases of available-for-sale
securities, offset by $34 million in proceeds from sales of property, plant and equipment.
Net cash provided by investing activities was $83 million in 2003, primarily as a result of net cash proceeds of $482 million from maturities and purchases
of available-for-sale securities, $148 million of cash acquired in conjunction with the Spansion transaction and $30 million in proceeds from sales of property,
plant and equipment, offset by $570 million used to purchase property, plant and equipment.
36
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006