AMD 2010 Annual Report Download - page 65

Interest Expense
2010 2009 2008
(In millions)
Total interest charges ............................................... $199 $439 $400
Less: interest capitalized ............................................ — (1) (9)
Interest expense ................................................... $199 $438 $391
Total interest charges of $199 million in 2010 decreased by $240 million from $439 million in 2009.
Interest expense decreased, primarily due to the absence, as a result of the deconsolidation of GF, of $153 million
of interest expense incurred by GF in 2009 and a net reduction in the principal amount of our outstanding debt,
which resulted in a net decrease of $77 million in interest expense.
Total interest charges of $439 million in 2009 increased by $39 million from $400 million in 2008,
primarily due to GF’s issuance of Class A Notes and Class B Notes to ATIC on March 2, 2009, which resulted in
$92 million of interest expense in 2009. The increase was partially offset by a decrease of interest expense due to
a lower principal amount outstanding under the 700 million euro Term Loan Facility Agreement related to the
Dresden manufacturing facilities and our 6.00% Notes due to repurchases occurring in the second and third
quarters of 2009. During 2008, we had capitalized interest primarily in connection with the construction of the
Fab 36 wafer fabrication facility and equipment facilitization activities in Dresden, Germany. We discontinued
capitalizing interest for Fab 36 in the first quarter of 2008 when it was in full production. There was $1 million of
interest capitalized in 2009 related to GF’s construction of Fab 2, its semiconductor facility in Saratoga County,
New York.
Other Income (Expense), Net
Other income, net in 2010 was $311 million compared to $166 million of other income, net in 2009 and $37
million of other expense, net in 2008.
In 2010, we recognized a one-time, non-cash gain related to the deconsolidation of GF of approximately
$325 million, a $17 million gain from the sale of our marketable securities and an $8 million gain related to an
earn-out payment that we received in connection with the acquisition of a company that we had invested in,
partially offset by a $24 million loss related to our repurchase of $1,016 million principal amount of our 6.00%
Notes and $14 million loss due to foreign exchange rate fluctuations.
In 2009, we repurchased $344 million principal amount of our 6.00% Notes, resulting in a gain of $174
million, and we repurchased $1,015 million principal amount of our 5.75% Notes, resulting in a gain of $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. These gains were partially offset by a $27
million foreign exchange loss, a $17 million charge for real estate transfer taxes in connection with the GF
manufacturing joint venture transaction and a $10 million charge related to the AMTC joint venture. During
2009, we also redeemed the remaining outstanding principal amount of our 7.75% Notes resulting in a net loss of
$11 million and recorded other than temporary impairment charge of $3 million relating to our investment in
Spansion Inc.
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 auction rate
securities (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.
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