AMD 2008 Annual Report Download - page 125

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The Company recorded other than temporary impairment charges of $53 million during 2008 for its
investment in Spansion Inc. (See Note 4)
At December 27, 2008 and December 29, 2007, respectively, the Company had approximately $31 million
and $12 million of investments classified as held to maturity, consisting of money market funds, commercial
paper and treasury notes used for long-term workers’ compensation, leasehold and letter of credit deposits, which
are included in other assets on the Company’s consolidated balance sheets. The fair value of these investments
approximated their cost at December 27, 2008 and December 29, 2007.
Fair Value Measurements
Assets and (liabilities) measured at fair value are summarized below:
Fair value measurement at reporting date using
December 27,
2008
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Money market mutual funds(1) ..................... $576 $576 $ — $ —
Commercial paper(2) ............................ 18 — 18 —
Time deposits(3) ................................ 236 — 236 —
Auction rate securities(4) ......................... 160 — — 160
UBS put option(5) ............................... 11 — — 11
Marketable equity securities(6) ..................... 5 5 — —
Foreign currency derivative contracts(7) ............. (36) — (36) —
(1) $547 million included in cash and cash equivalents and $29 million included in other assets on the
Company’s consolidated balance sheet.
(2) $16 million included in cash and cash equivalents and $2 million included in other assets on the Company’s
consolidated balance sheet.
(3) Included in cash and cash equivalents on the Company’s consolidated balance sheet.
(4) Included in marketable securities on the Company’s consolidated balance sheet and includes $89 million of
securities classified as available-for-sale and $71 million as trading securities.
(5) Included in other assets on the Company’s consolidated balance sheet.
(6) $3 million included in marketable securities and $2 million included in other assets on the Company’s
consolidated balance sheet.
(7) Included in accrued liabilities on the Company’s consolidated balance sheet and includes $42 million of
contracts that are in a loss position and $6 million of contracts that are in a gain position.
The Company measures its cash equivalents, marketable securities and foreign currency derivative contracts
at fair value. Cash equivalents and marketable securities are primarily classified within Level 1 or Level 2, with
the exception of auction rate security (ARS) investments. This is because cash equivalents and marketable
securities are valued primarily using quoted market prices or alternative pricing sources and models utilizing
market observable inputs, as provided to the Company by its brokers. The Company’s Level 1 assets are valued
using quoted prices for identical instruments in active markets. The Company’s Level 2 assets, all of which
mature within one month, are valued using broker reports that utilize quoted market prices for similar
instruments. The ARS investments and the UBS put option are classified within Level 3 because they are valued
using a discounted cash flow model. Some of the inputs to this model are unobservable in the market and are
significant. The Company’s foreign currency derivative contracts are classified within Level 2 because the
valuation inputs are based on quoted prices and market observable data of similar instruments in active markets,
such as currency spot and forward rates.
115