AMD 2008 Annual Report Download - page 133

The Company recorded net interest expense of $5 million in its income statement. The Company recorded a
decrease of $10 million net penalty expense in its income statement and a reduction of $6 million of penalties
was offset to goodwill in the current year. The reduction of penalties that were offset to goodwill was related to
the expiration of the statutes of limitations in certain foreign jurisdictions. The Company recorded net interest
expense of $3 million in its operating statement and a reduction of $15 million of interest was offset to goodwill
in 2007. The Company recorded $2 million net penalty expense in its operating statement and a reduction of
$4 million of penalties was offset to goodwill in 2007.
During the 12 months beginning December 28, 2008 the Company expects to reduce its unrecognized tax
benefits by approximately $102 million ($22 million net of deferred tax gross up) as a result of the expiration of
certain statutes of limitation and audit resolutions. The Company does not believe it is reasonably possible that
other unrecognized tax benefits will materially change in the next 12 months. However, the Company notes that
the resolution and/or closure on open audits is highly uncertain.
As of December 27, 2008, the Canadian Revenue Agency, or CRA, is auditing ATI for the years 2000
through 2004. The audit has been completed and is currently in the review process. The U.S. Internal Revenue
Service is auditing AMD’s tax years 2004 through 2006. As of December 27, 2008 the German tax authorities
are auditing AMD’s German subsidiaries for the tax years 2001 through 2004. AMD and its subsidiaries have
several foreign, foreign provincial, and U.S. state audits in process at any one point in time. The Company has
provided for uncertain tax positions that require a FIN 48 liability.
As a result of the application of FIN 48, the Company has recognized $94 million of current and long-term
deferred tax assets, previously under a valuation allowance with $94 million of liabilities for unrecognized tax
benefits as of December 27, 2008.
NOTE 8: Debt
Long-term Borrowings and Obligations
The Company’s long-term debt and capital lease obligations as of December 27, 2008 and December 29,
2007 consist of:
2008 2007
(In millions)
5.75% Senior Notes due 2012 .................................................... $1,500 $1,500
6.00% Senior Notes due 2015 .................................................... 2,140 2,200
Fab 36 Term Loan ............................................................. 705 839
Obligations to repurchase Fab 36 silent partner interests ............................... 28 94
7.75% Senior Notes Due 2012 ................................................... 390 390
Obligations under capital leases .................................................. 225 234
Other ....................................................................... 86 12
5,074 5,269
Less: current portion ........................................................... 372 238
Long-term debt and capital lease obligations, less current portion ........................ $4,702 $5,031
5.75% Convertible Senior Notes due 2012
On August 14, 2007, the Company issued $1.5 billion aggregate principal amount of 5.75% Convertible
Senior Notes due 2012 (the 5.75% Notes). The 5.75% Notes bear interest at 5.75% per annum. Interest is payable
in arrears on February 15 and August 15 of each year beginning February 15, 2008 until the maturity date of
August 15, 2012. The terms of the 5.75% Notes are governed by an Indenture (the 5.75% Indenture) dated as of
August 14, 2007, by and between the Company and Wells Fargo Bank, National Association, as Trustee.
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