AMD 2007 Annual Report Download - page 113

Table of Contents
As of December 29, 2007, the Company owned a total of 14,037,910 shares, or approximately 10.4 percent, of Spansion’s outstanding common stock. The
$56 million carrying value of this investment is included in the caption “Marketable Securities” on the Company’s consolidated balance sheet dated
December 29, 2007. To the extent that the fair value of the Company’s investment in Spansion changes in the future due to fluctuations in Spansion’s common
stock price, the Company would record either an unrealized loss or an unrealized gain within “Accumulated Other Comprehensive Income,” a component of
stockholders’ equity on the Company’s balance sheet. Should the Company sell shares of Spansion in the future, it would record either a realized loss or a
realized gain. In addition, to the extent that the Company concludes that any unrealized loss is other-than-temporary, the Company would record further
impairment charges through earnings.
Purchase of Spansion LLC 12.75% Senior Subordinated Notes Due 2016
On December 21, 2005, Spansion LLC, a wholly owned, indirect subsidiary of Spansion, issued to the Company $175 million aggregate principal amount
of its 12.75% Senior Subordinated Notes Due 2016 (the Spansion Senior Notes) for $158.9 million or 90.828 percent of face value. In June 2006, Spansion LLC
repurchased the Spansion Senior Notes for aggregate cash proceeds of $175 million. Upon repurchase, the Company recognized a gain of $16 million, of which
$10 million was recorded as other income and $6 million (representing the elimination of approximately 38 percent of the gain), was included in the caption,
“Equity in net loss of Spansion Inc., and other,” on the Company’s 2006 consolidated statement of operations.
Summarized Financial Information
The following table presents summarized consolidated financial information for Spansion Inc.(1)
Nine Months
Ended
September 30,
2007(2)
Year
Ended
December 31,
2006
(In millions)
Consolidated statement of operations information
Revenue $ 1,848 $ 2,579
Gross profit 307 513
Operating income (loss) (194) (91)
Net income (loss) $ (214) $ (148)
December 31,
2006
Consolidated balance sheet information
Current assets $ 1,775
Long term assets 1,775
Total assets $ 3,550
Current liabilities $ 690
Long term liabilities 1,014
Total stockholders’ equity 1,846
Total liabilities and stockholders’ equity $ 3,550
(1) Since the Company accounted for Spansion Inc. using the equity method of accounting for only the last five days of 2005, the Company has not provided
summary statement of operations information for 2005.
(2) The Company ceased using the equity method to account for its investment in Spansion as of September 20, 2007. The financial information for Spansion
presented here includes the stub period from September 21, 2007 until September 30, 2007, the end of Spansion’s fiscal third quarter. The financial results
during the stub period are immaterial.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008