AMD 2015 Annual Report Download - page 80

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factors including, among others, the nature of the sales transaction, the composition of assets and/or businesses in
the disposal group, current sales prices for comparable assets and/or businesses and negotiations with third party
purchaser(s).
As of December 26, 2015, the Company’s assets held for sale included in other current assets and liabilities
related to assets held for sale included in other current liabilities amounted to $183 million and $79 million,
respectively. See Note 4 “Equity Interest Purchase Agreement” below, for additional information.
Product Warranties. The Company generally warrants that its products sold to its customers will conform
to the Company’s approved specifications and be free from defects in material and workmanship under normal
use and service for one year. Subject to certain exceptions, the Company also offers a three-year limited warranty
to end users for only those central processing unit (CPU) and AMD accelerated processing unit (APU) products
that are commonly referred to as “processors in a box” and for certain server CPU products. The Company also
offered extended limited warranties to certain customers of “tray” microprocessor products and/or professional
graphics products who have written agreements with the Company and target their computer systems at the
commercial and/or embedded markets. The Company accrues warranty costs at the time of sale of warranted
products.
Foreign Currency Translation/Transactions. The functional currency of all of the Company’s foreign
subsidiaries is the U.S. dollar. Assets and liabilities denominated in non-U.S. dollars have been remeasured into
U.S. dollars at current exchange rates for monetary assets and liabilities and historical exchange rates for non-
monetary assets and liabilities. Non-U.S. dollar denominated transactions have been remeasured at average
exchange rates in effect during each period, except for those cost of sales and expense transactions related to
non-monetary balance sheet amounts, which have been remeasured at historical exchange rates. The gains or
losses from foreign currency remeasurement are included in earnings.
Foreign Subsidies. The Company received investment grants in connection with the construction and
operation of certain facilities in Asia. Generally, such grants are subject to forfeiture in declining amounts over
the life of the agreement if the Company does not maintain certain levels of employment or meet other conditions
specified in the relevant grant documents. Accordingly, amounts granted are initially recorded as a receivable
until cash proceeds are received. In the period the grant receivable is recorded, a current and long-term liability is
also recorded which is subsequently amortized as a reduction to cost of sales.
The Company also received grants relating to certain research and development projects. These research and
development funds are generally recorded as a reduction of research and development expenses when all
conditions and requirements set forth in the underlying grant agreement are met.
Marketing, Communications and Advertising Expenses. Marketing, communications and advertising
expenses for 2015, 2014 and 2013 were approximately $154 million, $194 million and $210 million,
respectively. Cooperative advertising funding obligations under customer incentive programs are accrued and the
costs are recorded upon agreement with customers and vendor partners. Cooperative advertising expenses are
recorded as marketing, general and administrative expense to the extent the cash paid does not exceed the
estimated fair value of the advertising benefit received. Any excess of cash paid over the estimated fair value of
the advertising benefit received is recorded as a reduction of revenue.
Net Loss Per Share. Basic net loss per share is computed based on the weighted-average number of shares
outstanding and shares issuable upon exercise of the warrants issued by the Company to West Coast Hitech L.P.
(WCH), in connection with the GLOBALFOUNDRIES, Inc. (GF) transaction in 2009. On March 7, 2014, the
Company issued 34,906,166 shares of common stock pursuant to the cashless exercise in full by WCH of its
warrant to purchase up to 35,000,000 shares of the Company’s common stock at an exercise price of $0.01 per
share. As a result, the warrant is no longer outstanding. The issuance of the common stock did not have any
effect on basic and dilutive earnings per share amounts because the full 35,000,000 shares of common stock
issuable to WCH had already been included in the denominator for calculating basic and dilutive earnings per
share for all periods presented.
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