AMD 2008 Annual Report Download - page 157

rules and has not recorded any potential insurance recoveries in determining the estimated costs of the cleanup.
The progress of future remediation efforts cannot be predicted with certainty and these costs may change. The
Company believes that the potential liability, if any, in excess of amounts already accrued, will not have a
material adverse effect on its financial condition or results of operations.
Other Matters
The Company is a defendant or plaintiff in various actions that arose in the normal course of business. In the
opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the
Company’s financial condition or results of operations.
NOTE 17: Discontinued Operations
During the second quarter of 2008, the Company evaluated the viability of its non-core businesses and
determined that it’s Handheld and Digital Television business units were not directly aligned with its core
strategy of computing and graphics market opportunities. As a result of this evaluation, the Company decided to
divest its Handheld and Digital Television business units.
As a result of the Company’s decision to divest these business units, the Company performed an interim
impairment test of goodwill and acquired intangible assets in the second quarter of 2008 and concluded that the
carrying amounts of goodwill and certain acquisition-related intangible assets associated with the Handheld and
Digital Television business units were impaired and recorded an impairment charge of $876 million. (See Note 3)
During the third quarter of 2008, the Company entered into an agreement with Broadcom Corporation to sell
the Digital Television business unit for $192.8 million. The agreement was subsequently amended to reduce the
purchase price to $141.5 million and the transaction was completed on October 27, 2008. Based on the final
terms of the sale transaction, the Company recorded an additional goodwill impairment charge of $135 million.
As a result of the decisions and transactions described above, pursuant to FASB Statement No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets (SFAS 144), the assets related to the Digital Television
business unit are presented as assets of discontinued operations on the 2007 consolidated balance sheet and the
operating results of the Digital Television business unit are presented as discontinued operations in the
consolidated statements of operations for all periods presented.
Although the Company’s plans and negotiations through the end of the third quarter of 2008 indicated that
the discontinued operations criteria of SFAS 144 were met for the Handheld business unit, during the fourth
quarter of 2008, the Company determined that, based on the ongoing negotiations related to the divestiture of its
Handheld business unit, the discontinued operations classification criteria for this business unit were no longer
met as of December 27, 2008. As a result, the Company classified the assets, liabilities, and operating results of
the Handheld business unit back into continuing operations. (See Note 19)
The results from discontinued operations for the Company’s former Digital Television business unit were as
follows:
2008 2007 2006
(In millions)
Revenue ............................................. $ 73 $155 $ 22
Expenses ............................................. (147) (230) (52)
Impairment of goodwill and acquired intangible assets ......... (609) (476) —
Restructuring charges ................................... (1) — —
Loss from discontinued operations ......................... $(684) $(551) $ (30)
147