AMD 2009 Annual Report Download - page 69

consolidated financial statements for 2007 and 2008 is $15 million and $25 million higher than previously
reported. Interest expense for 2009 under the new guidance is $25 million higher than it would have been under
the previous guidance.
Other Income (Expense), Net
Other income, net in 2009 was $166 million compared to other expense, net of $37 million in 2008. In 2009,
we repurchased $344 million principal amount of our 6.00% Notes for approximately $161 million in cash,
resulting in a gain of approximately $174 million, and we repurchased $1,015 million principal amount of our
5.75% Notes for approximately $1,002 million in cash, resulting in a gain of approximately $6 million. In
addition, we recognized a gain of $15 million on settlement of a liability related to certain foreign currency
exchange contracts, a gain of $28 million on the sale of certain Handheld assets, and a $25 million gain from a
class action legal settlement with DRAM manufacturers related to DRAM pricing. These gains were partially
offset by a $17 million charge for real estate transfer taxes in connection with the GF manufacturing joint venture
transaction, a $10 million charge related to the AMTC joint venture (described in more detail in the section “Off
Balance Sheet Arrangements,” below), and a $27 million foreign exchange loss due to the unfavorable foreign
exchange impact primarily on the euro denominated liabilities for our Foundry segment. During 2009, we also
redeemed the remaining outstanding principal amount of our 7.75% Senior Notes due 2012 (7.75% Notes)
resulting in a net loss of $11 million. During 2009, we also recorded an other than temporary impairment charge
of $3 million relating to our investment in Spansion Inc., reducing the carrying value to zero. In 2008 we
recorded a $53 million other than temporary impairment charge related to our investment in Spansion Inc., and a
$24 million other than temporary impairment charge related to our portfolio of ARS. These charges were
partially offset by a $33 million gain related to the repurchase of $60 million principal amount of our 6.00%
Notes for approximately $20 million in cash and a gain of $11 million on acquiring the put option related to our
holdings of UBS ARS, representing the fair value of this financial instrument.
Other expense, net in 2008 was $37 million compared to other expense, net of $118 million in 2007. During
2008, we recorded other than temporary impairment charges of $53 million related to our investment in Spansion
Inc. and a $24 million other than temporary impairment charge related to our portfolio of ARS These losses were
partially offset by a gain of $33 million recorded during the fourth quarter of 2008 due to the repurchase of $60
million principal amount of our 6.00% Notes for $20 million in cash. In addition, we recognized a gain of $11
million on acquiring the put option related to our holdings of UBS ARS, representing the fair value of this
financial instrument. In 2007, we recorded other than temporary impairment charges of $111 million related to
our investment in Spansion Inc. and a charge of $22 million for the write-off of unamortized debt issuance costs
incurred in connection with our repayment of the October 2006 Term Loan. These charges were partially offset
by a gain of $19 million on the sale of vacant land in Sunnyvale, California.
Income Taxes
We recorded an income tax provision of $112 million in 2009, $68 million in 2008 and $27 million in 2007.
The income tax provision in 2009 was primarily due to a one-time loss of deferred tax assets for German net
operating loss carryovers upon transfer of our ownership interests in the Dresden subsidiaries to GF plus foreign
taxes in profitable locations offset by discrete tax benefits including the monetization of U.S. research and
development credits. The income tax provision in 2008 primarily resulted from increases in net deferred tax
liabilities in our former German subsidiaries reduced by net current tax benefits in other jurisdictions. The
income tax provision in 2007 primarily resulted from current foreign taxes reduced by the reversal of deferred
U.S. taxes related to indefinite-lived goodwill, resulting from the goodwill impairment charge we recorded
during the year, and recognition of previously unrecognized tax benefits for tax holidays.
We were able to apply the special deduction provisions of IRC section 186 to the $1.25 billion payment
received from the settlement of our litigation with Intel in November 2009. IRC section 186 allows prior year net
operating losses to be taken as a special deduction in the current year.
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