AMD 2012 Annual Report Download - page 60

Legal Settlements
Samsung Settlement
In the fourth quarter of 2010, we entered into a Patent License and Settlement Agreement with Samsung to
end all outstanding legal disputes related to pending patent litigation between us and Samsung. Pursuant to this
agreement, all claims between the parties were dismissed with prejudice and Samsung agreed to pay us $283
million less any withholding taxes. We received the first payment of $119 million (which represents $143 million
less withholding taxes) in December 2010. The remaining amount of $117 million (which represents $140
million less withholding taxes) was paid in two equal installments in May 2011 and in November 2011. In
addition, pursuant to the settlement agreement, Samsung granted us, and we granted to Samsung, non-exclusive,
royalty-free licenses to all patents and patent applications for ten years after the effective date of the Agreement
to make, have made, use, sell, offer to sell, import and otherwise dispose of certain semiconductor- and
electronic-related products anywhere in the world.
This settlement encompassed all patent litigation and disputes between the parties. At the time we entered
into the Agreement, we did not have any future obligations that we were required to perform in order to earn this
settlement payment. Accordingly, we recognized the entire settlement amount in our operating results for the
fourth quarter of 2010.
Amortization of Acquired Intangible Assets
Amortization of acquired intangible assets was $14 million in 2012, $29 million in 2011 and $61 million in
2010. The decrease from 2011 to 2012 was due to the reduced amortization base amount of the acquired
intangible assets, offset by the acquisition of SeaMicro intangible assets in 2012. The decrease from 2010 to
2011 was due to the reduced amortization base amount of acquired intangible assets.
Effects of Restructuring Plans
2012 Restructuring Plan
In the fourth quarter of 2012, we implemented a restructuring plan designed to improve our cost structure
and to strengthen our competitiveness in core growth areas. The plan primarily involves a workforce reduction of
approximately 14% as well as asset impairments and facility consolidations. We recorded restructuring expense
in the fourth quarter of 2012 of approximately $90 million. Substantially all of the restructuring expense is
related to severance. Of the total restructuring expense, approximately $46 million related to cash payments in
the fourth quarter of 2012, with the remaining $41 million related to anticipated cash payments in 2013. The non-
cash portion of the restructuring expense included approximately $4 million of asset impairments. We plan to
substantially complete the plan by the end of the first quarter of 2013. We are currently evaluating further facility
consolidations, and depending on the outcome of such evaluation, we may incur additional restructuring charges,
which may be material.
2011 Restructuring Plan
In the fourth quarter of 2011, we initiated a restructuring plan to strengthen our competitive positioning,
implement a more competitive cost structure and conduct a workforce rebalancing to better address faster
growing market segments. The plan included a workforce reduction of approximately 13% and contract and
program terminations. We recorded a $100 million restructuring charge in the fourth quarter of 2011 and an
additional $8 million restructuring charge in 2012, which consisted of $62 million for severance and costs related
to the continuation of certain employee benefits, $46 million for contract or program termination costs and $1
million for asset impairments. The plan was substantially completed as of the end of the first quarter of 2012.
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