AMD 2008 Annual Report Download - page 80

Stock-based compensation expense of $109 million in 2007 increased $34 million compared to $75 million
in 2006 primarily due to the stock-based compensation expense related to awards that we assumed as part of the
ATI acquisition for a full year in 2007, as opposed to only nine weeks in 2006.
International Sales
International sales as a percent of net revenue were 88 percent in 2008 and 2007 and 75 percent in 2006.
The increase in international sales from 2006 to 2007 was attributable to the inclusion of sales of our graphics
and chipsets products to contract manufacturers and add-in-board manufacturers based outside the United States,
principally in China and Taiwan, for the full year in 2007 compared to 9 weeks in 2006. In 2008, 2007 and 2006,
substantially all of our sales transactions were denominated in U.S. dollars.
FINANCIAL CONDITION
Our cash, cash equivalents and marketable securities at December 27, 2008 totaled $1.1 billion and our debt
and capital lease obligations totaled $5 billion.
We decided to divest our Digital Television business unit during the second quarter of 2008 and, as a result,
classify it as discontinued operations for financial reporting. We completed the sale of this business in October
2008. The absence of any cash flows from our discontinued operations did not have a material impact on our
liquidity and financial position. Accordingly, we have combined cash flows from discontinued operations with
cash flows from continuing operations within each cash flow statement category discussed below.
Operating Activities
Net cash used in operating activities was $692 million in 2008. Non-cash charges included in our net loss of
$3.1 billion consisted primarily of $1.7 billion of goodwill and acquisition-related intangible impairment charges,
$1.2 billion of depreciation and amortization expense, $83 million of stock-based compensation expense, $53
million of other than temporary impairment charges on our investment in Spansion and $24 million of other than
temporary impairment charges on ARS. These charges were offset by a $193 million gain on the sale of 200
millimeter equipment, the amortization of foreign grants and allowances of $107 million and a net gain of $39
million on our repurchase of $60 million principal amount of our 6.00% Notes for $20 million. The net changes
in our operating assets at December 27, 2008 compared to December 29, 2007 included a decrease of $666
million in accounts payable and accrued liabilities primarily reflecting the effects of our cost cutting efforts, a
decrease of $101 million in accounts receivable primarily due to a decrease in sales and improved cash collection
efforts in 2008 and a decrease of $64 million in prepaid and other current assets primarily related to a decrease in
receivables of foreign grants and allowances.
Net cash used in operating activities was approximately $310 million in 2007. Our net loss of $3.4 billion
was adjusted for non-cash charges consisting primarily of $1.6 billion of goodwill and acquisition-related
intangible impairment charges, $1.3 billion of depreciation and amortization expense, $155 million of other than
temporary impairment charges and equity interest in the net loss of our investment in Spansion and $112 million
of stock-based compensation expense. These charges were partially offset by amortization to income of foreign
grants and subsidies of $167 million. The net changes in our operating assets at December 29, 2007 compared to
December 31, 2006 included a decrease of $503 million in accounts receivable partially offset by a decrease of
$329 million in accounts payable and accrued liabilities and an increase of $134 million in prepaid and other
current assets. Our accounts receivable balance decreased due to greater efficiency in management and collection
of accounts receivables. Accounts payable and accrued liabilities decreased due to the timing of payments
partially offset by increases in accrued interest and accruals for technology license payment obligations. The
increase in prepaid and other assets was driven by increases in receivables for foreign grants and subsidies,
purchases of technology licenses and an increase in prepaid insurance.
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