AMD 2015 Annual Report Download - page 48

Series mobile processors (formerly codenamed “Carrizo”) in a SoC design and introduced a desktop A-series
processor, the AMD A10-7870K APU. We also introduced the A8-7670K APU designed to support Windows®
10, mainstream workloads and online gaming. With respect to our graphics products, we introduced the new
AMD Radeon™ R9 Fury X and R9 Fury graphics, the AMD Radeon R7 300 and R9 300 series graphics as well
as the AMD Radeon M300 series graphics to reinforce our graphics leadership in both power efficiency for
notebooks and best-in class performance for desktops. We also expanded our AMD FirePro™ server GPU family
by introducing the AMD FirePro S9170, designed for high performance compute (HPC) environments. The
AMD FirePro S9170 is based on second-generation AMD Graphics Core Next (GCN) GPU architecture and a
unified scalable GPU optimized for graphics and compute. We announced the AMD FirePro W4300 graphics
card designed for Computer-Aided Design (CAD) for both small and full-size workstations. We also launched
the AMD Radeon R9 Nano, a small-form-factor mini-ITX enthusiast graphics card designed to deliver energy
efficiency and performance for ultra-high resolutions, improved virtual reality experiences and smoother
gameplay. With respect to our embedded products, we introduced the AMD Embedded R-Series SOC processor
designed for digital signage, retail signage, medical imaging, electronic gaming, media storage and
communications and networking.
During 2015, we continued to focus on reducing our expenses. Our operating expenses in 2015 decreased to
$1.56 billion, from $1.99 billion in 2014. Our operating expenses in 2014 included a goodwill impairment charge of
$233 million. We also took steps to simplify our business and better align resources around our priorities and business
outlook. In the third quarter of 2015, we implemented a restructuring plan (2015 Restructuring Plan). The 2015
Restructuring Plan provides for a workforce reduction of approximately 5% and includes organizational actions such
as outsourcing certain IT services and application development. The 2015 Restructuring Plan also anticipates a charge
for the consolidation of certain real estate facilities. We realized operational savings, primarily in operating expenses,
of approximately $8 million in 2015. We expect the 2015 Restructuring Plan to result in operational savings, primarily
in operating expenses, of approximately $48 million in 2016.
On October 15, 2015, we entered into an Equity Interest Purchase Agreement (the Equity Interest Purchase
Agreement) with Nantong Fujitsu Microelectronics Co., Ltd., a Chinese joint stock company (JV Party), under
which we will sell to JV Party a majority of the equity interests in AMD Technologies (China) Co. Ltd., a
wholly-foreign owned enterprise incorporated as a limited liability company (the Chinese Target Company), and
Advanced Micro Devices Export Sdn. Bhd., a Malaysian limited liability company (the Malaysian Target
Company and, together with the Chinese Target Company, the Target Companies), thereby forming two joint
ventures (collectively, the JVs) with JV Party in a transaction valued at approximately $436 million (the
Transaction). The JV Party will acquire 85% of the equity interests in each JV for approximately $371 million
and we estimate we will receive approximately $320 million cash, net of taxes and other customary expenses.
After closing, JV Party’s affiliates will own 85% of the equity interests in each JV while certain of our
subsidiaries will own the remaining 15%. The Transaction will result in the JVs providing assembly, testing,
marking, packing and packaging services (ATMP) to us. We plan to account for our investment in the JVs under
the equity method of accounting.
Our cash, cash equivalents and marketable securities as of December 26, 2015 were $785 million compared
to $1.0 billion as of December 27, 2014. Total debt as of December 26, 2015 was $2.26 billion, compared to $2.2
billion as of December 27, 2014.
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 (currently known as Mubadala Technology
Investments LLC (Mubadala Tech) 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, Mubadala Tech 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.
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