AMD 2008 Annual Report Download - page 106

Advanced Micro Devices Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 27, 2008, December 29, 2007 and December 31, 2006
NOTE 1: Nature of Operations
Advanced Micro Devices, Inc. (the Company or AMD) is a global semiconductor company with
manufacturing, research and development, and sales and administrative facilities throughout the world.
References herein to the “Company” mean AMD and its consolidated wholly-owned and majority-owned
subsidiaries. The Company provides processing solutions for the computing and graphics markets. On
October 25, 2006 the Company completed the acquisition of ATI Technologies Inc. (ATI) (see Note 3). As a
result of the acquisition, AMD began to supply 3D graphic, video and multimedia products and chipsets for
personal computers, or PCs, including desktop and notebook PCs, professional workstations, and servers and
products for consumer electronic devices such as mobile phones, digital televisions and game consoles. During
the fourth quarter of 2008,, the Company completed the sale of its Digital Television business unit to Broadcom
Corporation. As a result, the Company no longer sells video processors used in digital television products.
NOTE 2: Summary of Significant Accounting Policies
Fiscal Year. The Company uses a 52- to -53 week fiscal year. Prior to December 31, 2006, the Company’s
fiscal year ended on the last Sunday in December. Commencing in 2007, the Company began using a 52- to -53
week fiscal year ending on the last Saturday in December. Fiscal 2008, 2007 and 2006 ended December 27,
December 29 and December 31, respectively. Fiscal 2008, 2007 and 2006 consisted of 52 weeks, 52 weeks and
53 weeks, respectively.
Principles of Consolidation. The consolidated financial statements include the Company’s accounts and
those of its wholly-owned and majority-owned subsidiaries, including the operations of ATI from October 25,
2006. Upon consolidation, all significant intercompany accounts and transactions are eliminated, and amounts
pertaining to the noncontrolling ownership interests held by third parties in the operating results and financial
position of the Company’s majority-owned subsidiaries are reported as minority interest.
Reclassifications. Certain reclassifications have been made to prior year balances in order to conform to
the current year’s presentation of financial information. (See Note 17)
During the fourth quarter of 2008, the Company divested its Digital Television business unit. The Company
classified the operations of the Digital Television business unit as discontinued operations and segregated
balances related to the Digital Television business unit from balances related to continuing operations on its
consolidated balance sheet as of December 29, 2007. The Company also segregated the operating results of the
Digital Television business unit from those of continuing operations on its consolidated statements of operations
for all periods presented.
During 2008, the Company decided to sell certain Handheld business unit technology assets, and sold them
during the first quarter of 2009. These assets were recorded as assets held for sale in the Company’s consolidated
balance sheet as of December 27, 2008.
Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Actual results are
likely to differ from those estimates, and such differences may be material to the financial statements. Areas
where management uses subjective judgment include, but are not limited to, revenue reserves, inventory
96