AMD 2015 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2015 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

were required to perform in order to earn the settlement payments. Accordingly, we recognized the entire
settlement amount in our operating results for the fourth quarter of 2013.
Amortization of Acquired Intangible Assets
Amortization of acquired intangible assets was $3 million in 2015, $14 million in 2014 and $18 million in
2013. The decrease from 2014 to 2015 was due to the impairment of intangible assets as a result of our exit from
the dense server systems business in the first quarter of 2015. The decrease from 2013 to 2014 was due to the
reduced amortization base amount of acquired intangible assets of ATI.
Restructuring and Other Special Charges, Net
Effects of Restructuring Plans
2015 Restructuring Plan
In the third quarter of 2015, we implemented a restructuring plan (2015 Restructuring Plan) focused on our
ongoing efforts to simplify our business and better align resources around our priorities and business outlook.
The 2015 Restructuring Plan involves a reduction of global headcount by approximately 5% and includes
organizational actions such as outsourcing certain IT services and application development. During 2015, we
recorded a $37 million restructuring charge, which consisted of approximately $27 million of severance and
benefit costs, approximately $1 million of facilities related consolidation charges and approximately $9 million
of intangible asset related charges associated with the impairment of certain software licenses that have ongoing
payment obligations. The 2015 Restructuring Plan resulted in total cash payments of $14 million in 2015. We
expect the 2015 Restructuring Plan will likely result in total cash payments of approximately $14 million in
2016. We expect actions associated with the 2015 Restructuring Plan to be substantially completed by the end of
the third quarter of 2016.
The following table provides a summary of the restructuring activities during 2015 and the related liabilities
recorded in “Other current liabilities” and “Other long-term liabilities” on our consolidated balance sheets as of
December 26, 2015:
Severance
and related
benefits
Other exit
related
costs Total
(In millions)
Balance as of June 27, 2015 .......................................... $— $— $—
Charges (reversals), net ......................................... 27 10 37
Cash payments ................................................ (13) (1) (14)
Non-cash charges .............................................. — (9) (9)
Balance as of December 26, 2015 ..................................... $ 14 $— $ 14
2014 Restructuring Plan
In the fourth quarter of 2014, we implemented a restructuring plan (2014 Restructuring Plan) designed to
improve operating efficiencies. The 2014 Restructuring Plan involved a reduction of global headcount by
approximately 6% and an alignment of our real estate footprint with our reduced headcount. We recorded a $57
million restructuring charge in the fourth quarter of 2014, which consisted of $44 million for severance and costs
related to the continuation of certain employee benefits, $6 million for contract or program termination costs, $1
million for facilities related costs and $6 million for asset impairments, a non-cash charge. During 2015, we
recorded a $16 million restructuring charge, which consisted of $5 million non-cash charge related to asset
impairments, $2 million for severance and related benefits and $9 million for facilities related costs. The 2014
Restructuring Plan was substantially completed by the end of the third quarter of 2015.
52