AMD 2008 Annual Report Download - page 144

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Other Income (Expense), Net
2008 2007 2006
(In millions)
Gain on repurchase of 6.00% Notes ....................... $ 39 $ — $ —
Write-off of unamortized debt issuance cost associated with
October 2006 Term Loan ............................. (22) —
Gain on sale of vacant land in Sunnyvale, California .......... 19 —
Charges on redemption of 7.75% Notes .................... — — (20)
Fab 36 Term Loan commitment and guarantee fees ........... (6) (6) (12)
Gain on Spansion LLC’s repurchase of its 12.75% Notes ...... — — 10
Other than temporary impairment charges on ARS ........... (24) — —
UBS put option ....................................... 11
Other ............................................... 2 2 9
Other income (expense), net ............................. $ 22 $ (7) $ (13)
Gain on sale of 200 millimeter equipment and the license of related process technology
During 2008, in conjunction with the conversion of Fab 30 from 200 millimeter to 300 millimeter
fabrication, the Company sold certain 200 millimeter manufacturing equipment and licensed certain process
technology to a third party. The Company evaluated this multiple-element arrangement in accordance with EITF
No. 00-21, Revenue Arrangements with Multiple Deliverables, and determined that each component was
considered a separate unit of accounting. In addition, the arrangement consideration was allocated to each unit
based on their relative fair values.
In the second quarter of 2008, upon delivery of a majority of the manufacturing equipment, the Company
recognized a gain of approximately $167 million, which is classified in the caption “Gain on sale of 200
millimeter equipment” in the Company’s 2008 consolidated statement of operations. The difference between the
$167 million gain recognized in the transaction described above and the $193 million gain shown in the
consolidated statement of operations for 2008 represented gains recognized on sale of other 200 millimeter
equipment to other third parties. In addition, the Company has deferred recognizing approximately $49 million of
payments received pending the future delivery of the remaining manufacturing equipment, which is classified in
the caption “Other current liabilities” in the Company’s 2008 consolidated balance sheet.
In the third quarter of 2008, upon delivery of the process technology, the Company recognized revenue of
approximately $191 million, which is classified in the caption “Net revenue” in the Company’s 2008
consolidated statement of operations.
NOTE 10: Segment Reporting
Management, including the Chief Operating Decision Maker (CODM), who is the Company’s chief
executive officer, reviews and assesses operating performance using segment net revenues and operating income
(loss) before interest, other income (expense), equity in net loss of Spansion Inc. and other, income taxes and
minority interest. These performance measures include the allocation of expenses to the operating segments
based on management’s judgment.
From December 26, 2005 through October 24, 2006, the Company had two reportable segments:
• the Computation Products segment, which included microprocessors, AMD chipsets and related
revenue; and
• the Embedded Products segment, which included embedded processors and related revenue.
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