AMD 2006 Annual Report Download - page 304

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
14. Employee Benefit Plans
Employee Pension Benefits
Through August 2005, certain employees of Spansion Japan were enrolled in a defined benefit pension plan and/or a lump-sum retirement benefit plan
sponsored by Fujitsu. The Company, by agreement with Fujitsu, is required to fund those proportional benefit obligations attributable to the Company’s
employees enrolled in these plans. Until September 1, 2005, the Company accounted for its participation in these plans as multiemployer plans wherein the
expense recorded for the plans was equal to its annual cash contributions. The Company recorded estimated pension expense of approximately $5.7 million and
$7.5 million for the years ended December 25, 2005 and December 26, 2004, respectively. There were no unpaid contributions for the year ended December 25,
2005.
Establishment of Spansion Japan Pension Plan
On September 1, 2005, the Company adopted the new Spansion Japan pension plan and changed the formula to a cash balance formula. The new pension
plan has two components. The first component provides a lump-sum payment, or twenty-year certain annuity or twenty-year guaranteed life annuity. The second
component consists of a lump-sum payment or an optional period certain annuity. Participants have the option to choose a cash payment in lieu of participation in
the second component. The effective date of the plan is September 1, 2005. Assets and obligations have been transferred from the Fujitsu Group Employee
Pension Fund (“EPF”) to the newly adopted Spansion Japan pension plan.
As part of the transfer of benefits from the EPF, the new Spansion Japan pension plan also received approximately $48.7 million in pension assets directly
from the EPF trust.
As a result of the adoption of the plan and amendment to a cash balance formula, a prior service cost base was established for approximately $12.5 million
an unrecognized net loss base was established for approximately $7.7 million and an additional minimum liability was recognized for $20.3 million.
Adoption of Statement 158
As disclosed in Note 3, on December 31, 2006, the Company adopted the pension accounting and disclosure provisions of Statement 158. The incremental
effects of adopting the provisions of Statement 158 on the Company’s consolidated balance sheet at December 31, 2006 are presented in the following table. The
adoption of Statement 158 had no effect on the Company’s consolidated statement of operations for the year ended December 31, 2006, or for any prior period
presented, and it will not effect the Company’s operating results in future periods. Had the Company not been required to adopt Statement 158 at December 31,
2006, it would have recognized an additional minimum liability pursuant to the provisions of Statement 87. The effect of recognizing the additional minimum
liability is included in table below in the column labeled “Prior to Application of Statement 158.”
Prior to
Adopting
Statement 158
Effect of
Adopting
Statement 158
As
Reported at
Dec. 31, 2006
(in thousands)
Other assets 35,628 (10,231) 25,397
Total assets 3,559,948 (10,231) 3,549,717
Other long-term liabilities (3,531) (522) (4,053)
Accumulated other comprehensive income 68,953 10,753 79,706
Total stockholders’ equity (1,856,513) 10,753 (1,845,760)
Total liabilities and stockholders’ equity (3,559,948) 10,231 (3,549,717)
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007