AMD 2005 Annual Report Download - page 7

Table of Contents
On December 21, 2005, Spansion Inc. closed its initial public offering, or IPO, of 47,264,000 shares of its Class A common stock as well as offerings of
senior notes to institutional investors with an aggregate principal amount of $250 million and senior subordinated notes to us with an aggregate principal amount
of $175 million. Shortly prior to the pricing of the IPO, Spansion LLC was reorganized into a corporate structure and became an indirect wholly-owned
subsidiary of Spansion Inc. Following the IPO, we own 48,529,403 shares, or approximately 37.9 percent, of Spansion’s outstanding common stock. As of
December 21, 2005, Spansion Inc. is an independent company and is no longer our majority owned subsidiary. Therefore, its financial position, results of
operations and cash flows have been consolidated with ours only through December 20, 2005. We currently report our interest in Spansion’s results of operations
using the equity method of accounting. As a result, our share of Spansion’s net income (loss) will impact our net income (loss). Also, from December 21, 2005,
our investment in Spansion is reflected on our consolidated balance sheet in the “Net Investment in Spansion” line item.
This report generally reflects our structure at December 25, 2005, which is after Spansion’s IPO. However, because Spansion’s results of operations are
consolidated with our results of operations for substantially all of 2005, and because Spansion’s results of operations can materially affect our results of
operations, we include a discussion of the Flash memory market and Spansion’s Flash memory operations under this section entitled, “Business,” a discussion of
the results of operations of our Memory Products segment through December 20, 2005 under the section entitled, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” beginning on page 24 below, and risks and uncertainties that Spansion faces that could affect Spansion’s results
of operations and correspondingly our results of operations under the section entitled, “Risk Factors,” beginning on page 54 below.
In connection with Spansion’s IPO, we entered into a Stockholders Agreement as of December 21, 2005, with Fujitsu and Spansion, which imposes certain
restrictions and obligations on us and Fujitsu and our respective shares of Spansion’s common stock and provides for certain matters pertaining to Spansion’s
management and governance. Pursuant to the Stockholders Agreement, neither we nor Fujitsu can transfer any shares of Spansion’s common stock, except to
majority owned subsidiaries, until the earlier of December 21, 2006 or the conversion of the Class D common stock, which is a class of common stock owned by
Fujitsu, into Class A common stock. In addition, neither we nor Fujitsu can transfer shares in an amount equal to or greater than one percent of the then
outstanding common stock to any entity whose principal business competes with Spansion, without first obtaining the consent of the non-transferring party, such
consent not to be unreasonably withheld after June 30, 2007. With the exception of board observer rights and stock registration rights, the Stockholders
Agreement will terminate when each party’s aggregate ownership interest in Spansion falls below ten percent.
Additional Information
We were incorporated under the laws of Delaware on May 1, 1969 and became a publicly held company in 1972. Since 1979 our common stock has been
listed on the New York Stock Exchange under the symbol “AMD.” Our mailing address and executive offices are located at One AMD Place, Sunnyvale,
California 94088, and our telephone number is [phone]. References in this report to “AMD,” “we,” “us,” “our,” or the “Company” means Advanced
Micro Devices, Inc. and our consolidated subsidiaries, including, prior to December 21, 2005, Spansion Inc. (formerly Spansion LLC) and its subsidiaries.
We post on the Investor Relations pages of our Web site,www.amd.com, a link to our filings with the SEC, our Principles of Corporate Governance, our
Code of Ethics for our Chief Executive Officer, Chief Financial Officer, Corporate Controller and other senior finance executives, our “Worldwide Standards of
Business Conduct,” which applies to our directors and all our employees, and the charters of our Audit, Compensation, Finance and Nominating and Corporate
Governance committees. Our filings with the SEC are posted as soon as reasonably practical after they are filed electronically with the SEC. You can also obtain
copies of these documents by writing to us at: Corporate Secretary, AMD, One AMD Place, M/S 68, Sunnyvale, California 94088, or emailing us at:
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Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006