AMD 2015 Annual Report Download - page 113

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2012 Restructuring Plan
In the fourth quarter of 2012, the Company implemented a restructuring plan designed to improve the
Company’s cost structure and to strengthen its competitiveness in core growth areas. The plan primarily involved
a workforce reduction of approximately 14% as well as asset impairments and facility consolidations. The
Company recorded restructuring expense in the fourth quarter of 2012 of approximately $90 million which was
primarily comprised of employee severance. The non-cash portion of the restructuring expense included
approximately $4 million of asset impairments. In 2014 and 2013, the Company incurred costs of $3 million and
$11 million, respectively, related to facility consolidation and site closures, which were partially offset by the
release of employee severance costs of $2 million and $5 million, respectively. The 2012 restructuring plan was
substantially completed as of the end of the third quarter of 2013.
Dense Server Systems Business Exit
As a part of the Company’s strategy to simplify and sharpen its investment focus, the Company exited the
dense server systems business, formerly SeaMicro, in the first quarter of 2015. As a result, the Company
recorded a charge of $76 million in “Restructuring and other special charges, net” on the Company’s
consolidated statements of operations during 2015. This charge consisted of an impairment charge of $62 million
related to the acquired intangible assets. The Company concluded that the carrying value of the acquired
intangible assets associated with its dense server systems business was fully impaired as the Company did not
have plans to utilize the related freedom fabric technology in any of its future products nor did it have any plans
at that time to monetize the associated intellectual property. In addition, the exit charge consisted of a $7 million
non-cash charge related to asset impairments, $4 million of severance and related benefits and $3 million for
contract or program termination costs. The Company expects to complete this exit activity by the end of the first
quarter of 2016.
Executive Officer Separation
In the fourth quarter of 2014, the Company recorded other special charges of $13 million. The amount
primarily included $10 million due to the departure of the Company’s former CEO, of which $5 million was
related to cash and $5 million was related to stock-based compensation expense. The amount is recorded under
“Restructuring and other special charges, net” on the consolidated statements of operations.
Sale and Leaseback Transactions
In September 2013, the Company sold a light industrial building in Singapore and leased back a portion of
the original space. The Company received net proceeds of $46 million in connection with the sale, which resulted
in a $17 million gain that the Company recorded in the third quarter of 2013 and a $14 million deferred gain as of
September 28, 2013 that is being amortized over the initial operating lease term. The initial operating lease term
expires in September 2023 and provides for options to extend the operating lease for 4 years at the end of the
initial lease term, and for an additional 3.5 years thereafter.
In September 2013, the Company also sold an office building in Austin, Texas. The Company received net cash
proceeds of $10 million in connection with the sale and recorded a $5 million gain in the third quarter of 2013.
In March 2013, the Company sold and leased back land and office buildings in Austin, Texas. The Company
received net cash proceeds of $164 million in connection with the sale and recorded a $52 million charge in the
first quarter of 2013. The operating lease expires in March 2025 and provides for one 10-year optional renewal.
In March 2013, the Company also sold an office building in Markham, Ontario, Canada, and leased back a
portion of the original space through June 2013. The Company received net cash proceeds of $13 million in
connection with the sale and recorded a $6 million gain in the first quarter of 2013.
The net charge of $24 million in 2013 related to the real estate transactions described above is recorded in
the “Restructuring and other special charges, net” on the consolidated statements of operations.
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