AMD 2007 Annual Report Download - page 292

Spansion Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(Unaudited)
7. Warranties and Indemnities
The Company generally offers a one-year limited warranty for its Flash memory products.
Changes in the Company’s liability for product warranty during the three and nine months ended September 30, 2007 and October 1, 2006 are as follows:
Three Months
Ended Nine Months Ended
Sep. 30,
2007
Oct. 1,
2006
Sep. 30,
2007
Oct. 1,
2006
(in thousands)
Balance, beginning of period $ 1,600 $ 1,000 $ 1,350 $ 1,000
Provision for warranties issued 1,095 1,293 3,579 2,977
Settlements (446) (255) (1,554) (2,497)
Changes in liability for pre-existing warranties during the period, including expirations (649) (688) (1,775) (130)
Balance, end of period $ 1,600 $ 1,350 $ 1,600 $ 1,350
In addition to product warranties, the Company, from time to time in its normal course of business, indemnifies other parties with whom it enters into
contractual relationships, including customers, directors, lessors and parties to other transactions with the Company, with respect to certain matters. The
Company has agreed to hold the other parties harmless against specified losses, such as those arising from a breach of representations or covenants, third-party
infringement claims or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these
indemnification obligations due to the limited history of indemnification claims and the unique facts and circumstances that are likely to be involved in each
particular claim and indemnification provision.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008