AMD 2013 Annual Report Download - page 50

net loss for 2013 improved to $83 million compared to a net loss of $1.2 billion for 2012. Cash, cash equivalents
and marketable securities, including long-term marketable securities, as of December 28, 2013 were $1.2 billion,
the same as of December 29, 2012.
The financial results for the second half of 2013 were evidence of our transformation efforts, as we derived
more than 30% of net revenues from semi-custom and embedded products. During the second half of 2013, we
also began laying the foundation for execution of the third phase of our transformation plan, in which we intend
to expand our business beyond a transitioning traditional PC industry by creating a more diverse product
portfolio and expanding our revenue base into new high-growth adjacent markets. We seek to transform our
business to attain approximately 50% of revenue from high-growth adjacent markets by the end of 2015.
GLOBALFOUNDRIES
Formation and Accounting
On March 2, 2009, we consummated the transactions contemplated by the Master Transaction Agreement
among us, Advanced Technology Investment Company LLC (ATIC) and West Coast Hitech L.P. (WCH),
pursuant to which we formed GF. In connection with the consummation of the transactions contemplated by the
Master Transaction Agreement, AMD, ATIC and GF entered into a Wafer Supply Agreement (the WSA), a
Funding Agreement (the Funding Agreement) and a Shareholders’ Agreement (the Shareholders’ Agreement) on
March 2, 2009.
At GF’s formation on March 2, 2009 and through December 26, 2009, GF was deemed a variable-interest
entity and we were deemed to be GF’s primary beneficiary. Accordingly, we consolidated GF under applicable
accounting rules. As a result of certain GF governance changes, we deconsolidated GF and accounted for our GF
ownership under the equity method of accounting as of December 27, 2009. Following the deconsolidation, GF
became our related party.
In the first quarter of 2011, as a result of a contribution to GF by an affiliate of ATIC and certain GF
governance changes noted above, our ownership in GF was diluted and we concluded that we no longer had the
ability to exercise significant influence over GF. Accordingly, we changed our accounting for our investment in
GF from the equity method to the cost method of accounting and recognized a dilution gain in investee of
approximately $492 million. In the fourth quarter of 2011, we identified indicators of impairment in GF that were
deemed other than temporary. We performed a valuation analysis and recorded a non-cash impairment charge of
$209 million. The carrying value of our remaining investment in GF after the impairment charge was $278
million as of December 31, 2011.
On March 4, 2012, as partial consideration for certain rights received under a second amendment to the
WSA, we transferred to GF all of the remaining capital stock of GF that we owned. In addition, as of March 4,
2012, the Funding Agreement was terminated and we were no longer party to the Shareholders’ Agreement. As a
result of these transactions, we no longer owned any GF capital stock as of March 4, 2012.
GF continues to be a related party of us because Mubadala Development Company PJSC’s (Mubadala) and
ATIC are affiliated with WCH, our largest stockholder. WCH and ATIC are wholly-owned subsidiaries of
Mubadala.
Wafer Supply Agreement
The WSA governs the terms by which we purchase products manufactured by GF. Pursuant to the WSA, we
are required to purchase all of our microprocessor and APU product requirements from GF with limited
exceptions. If we acquire a third-party business that manufactures microprocessor and APU products, we will
have up to two years to transition the manufacture of such microprocessor and APU products to GF.
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