AMD 2006 Annual Report Download - page 133

Table of Contents
NOTE 10: Interest Expense and Other Income (Expense), Net
Interest Expense
2006 2005 2004
(In millions)
Total interest charges $ 136 $ 140 $ 121
Less: interest capitalized (10) (35) (9)
Interest expense $ 126 $ 105 $ 112
The company has capitalized interest in each of the past three years primarily in connection with its Fab 36 construction activities in Dresden, Germany.
Other Income (Expense), Net
2006 2005 2004
(In millions)
Loss on redemption of 7.75% Notes $ (20) $ — $ —
Fab 36 Term Loan commitment and guarantee fees (12) (14) —
Gain on Spansion LLC’s repurchase of its 12.75% Notes 10 — —
Loss on ineffective hedge — (10) (6)
Loss on exchange of 4.50% Notes for common stock — — (32)
Loss on prepayment of term loan — — (14)
Gain on sale of marketable securities — — 8
Other 9 — (5)
Other income (expense), net $ (13) $ (24) $ (49)
NOTE 11: Segment Reporting
Management, including the Chief Operating Decision Maker (CODM), who is the Company’s chief executive officer, reviews and assesses operating
performance using segment revenues and operating income (loss) before interest, other income (expenses), equity in net loss of Spansion Inc. and other, income
taxes and minority interest. These performance measures include the allocation of expenses to the operating segments based on management’s judgment.
Prior to December 21, 2005, the Company had the following three reportable segments:
• the Computation Products segment, which included microprocessor products for desktop and mobile PCs, servers and workstations and AMD chipset
products;
• the Memory Products segment, which included Spansion Flash memory products; and
• the Personal Connectivity Solutions segment, which consisted of embedded processors for global commercial and consumer markets.
As a result of the completion of Spansion’s IPO on December 21, 2005, the Company’s financial results of operations included Spansion’s results of
operations as a consolidated subsidiary only through December 20, 2005. From December 21, 2005, Spansion’s operating results and financial position are not
consolidated as part of the Company’s financial results. Instead, the Company applied the equity method of accounting to reflect its proportionate share of
Spansion’s net income (loss) from December 21, 2005 through December 31, 2006. Accordingly, as of December 21, 2005 the Company no longer had the
Memory Products segment, and the operating results for the year 2006 are not fully comparable with the results for 2005 or 2004.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007