AMD 2008 Annual Report Download - page 56

(2) 2006 includes the operations of ATI for the period from October 25, 2006 through December 31 2006. As a
result 2006 is not fully comparable to 2008, 2007 or prior periods.
(3) 2004 includes the results of operations for our former Memory Products segment for the entire year.
Therefore, 2004 is not fully comparable to 2005 during which Spansion’s results of operations were not
consolidated with our results of operations for the last five days of the fiscal year. From December 21, 2005,
the date that Spansion closed its IPO, through December 25, 2005 and for all of 2006 we used the equity
method of accounting to reflect our share of Spansion’s net income (loss). We include this information
under the caption, “Equity in net income (loss) of Spansion Inc. and other,” on our consolidated statement of
operations. In September 2007, as a result of our loss of the ability to exercise significant influence over
Spansion, we ceased applying the equity method of accounting and began accounting for this investment as
“available-for-sale” marketable securities. Therefore, 2007 and 2008 are not fully comparable to prior
periods.
(4) The increase in interest expense from $126 million in 2006 to $367 million in 2007 was composed of
interest on new debt instruments outstanding including our 6.00% Notes, 5.75% Notes, Fab 36 Term Loan
and October 2006 Term Loan.
(5) For 2004, other income (expense), net, includes a charge of approximately $32 million associated with our
exchange of $201 million of our 4.50% Convertible Senior Notes due 2007 for common stock and a charge
of approximately $14 million in connection with our prepayment of amounts outstanding under a term loan
agreement among our German subsidiary, AMD Fab 30 Limited Liability Company & Co. KG, and the
lenders party thereto.
(6) The 2006, 2007 and 2008 minority interest amounts represent the guaranteed rate of return of between 11
and 13 percent related to the limited partnership contributions that AMD Fab 36 KG received from the
unaffiliated partners (Fab 36 Minority Interest); and the 2005 and 2004 minority interest amount includes
the Fab 36 Minority Interest and Spansion Related Minority Interest. However, in April 2008, we
repurchased the partnership interests in AMD Fab 36 KG held by one of the unaffiliated partners, Fab 36
Beteiligungs.
(7) In 2005 we recorded a loss of $110 million due to the dilution in our ownership interest in Spansion from 60
percent to approximately 38 percent in connection with Spansion’s IPO. This represented the difference
between Spansion’s book value per share before and after the IPO multiplied by the number of shares
owned by us. In September 2007, as a result of our loss of the ability to exercise significant influence over
Spansion, we ceased applying the equity method of accounting and began accounting for this investment as
“available-for-sale” marketable securities. In 2007 we recorded impairment charges of $111 million. In
2008 we recorded impairment charges of $53 million. See Part II, Item 7 “MD&A-Equity in net loss of
Spansion Inc and other.”
(8) The 2006 and 2007 income tax provisions resulted from current foreign taxes. In 2006, foreign benefits
resulted from the reduction of valuation allowance on German net operating loss carryovers related to Fab
36. In 2007, benefits resulted from previously unrecognized tax benefits for tax holidays. In 2006 the
provision was increased by deferred U.S. tax related to indefinite-lived goodwill. In 2007, the provision was
reduced by a similar amount (for indefinite-lived goodwill) as a result of goodwill impairment. The income
tax provision in 2008 primarily results from increases in net deferred tax liabilities in our German
subsidiaries reduced by net current tax benefits in other jurisdictions.
(9) During the second quarter of 2008 we decided to divest the Digital Television business and classified it as
discontinued operations and, during the third quarter of 2008, we entered into an agreement with Broadcom
to sell certain assets related to the Digital Television business unit. The sale transaction was completed on
October 27, 2008 for $141.5 million. See Part II, Item 7 “MD&A-Discontinued Operations.”
(10) Total assets decreased $3,875 million from 2007 to 2008 primarily due to the impairment of ATI
acquisition-related goodwill and acquired intangible assets, lower cash, cash equivalents and marketable
securities due to our significant losses, and the sale and impairment of assets associated with the divestiture
of the Digital Television business unit in 2008. Total assets decreased $1,597 million from 2006 to 2007
primarily due to the impairment of ATI acquisition-related goodwill and intangible assets. Total assets
increased $5,859 million from 2005 to 2006 primarily as a result of the acquisition of ATI.
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