AMD » Topics » Other Income (Expense), Net

These excerpts taken from the AMD 10-K filed Feb 19, 2010.

Other Income (Expense), Net

Other income, net in 2009 was $166 million compared to other expense, net of $37 million in 2008. In 2009, we repurchased $344 million principal amount of our 6.00% Notes for approximately $161 million in cash, resulting in a gain of approximately $174 million, and we repurchased $1,015 million principal amount of our 5.75% Notes for approximately $1,002 million in cash, resulting in a gain of approximately $6 million. In addition, we recognized a gain of $15 million on settlement of a liability related to certain foreign currency exchange contracts, a gain of $28 million on the sale of certain Handheld assets, and a $25 million gain from a class action legal settlement with DRAM manufacturers related to DRAM pricing. These gains were partially offset by a $17 million charge for real estate transfer taxes in connection with the GF manufacturing joint venture transaction, a $10 million charge related to the AMTC joint venture (described in more detail in the section “Off Balance Sheet Arrangements,” below), and a $27 million foreign exchange loss due to the unfavorable foreign exchange impact primarily on the euro denominated liabilities for our Foundry segment. During 2009, we also redeemed the remaining outstanding principal amount of our 7.75% Senior Notes due 2012 (7.75% Notes) resulting in a net loss of $11 million. During 2009, we also recorded an other than temporary impairment charge of $3 million relating to our investment in Spansion Inc., reducing the carrying value to zero. In 2008 we recorded a $53 million other than temporary impairment charge related to our investment in Spansion Inc., and a $24 million other than temporary impairment charge related to our portfolio of ARS. These charges were partially offset by a $33 million gain related to the repurchase of $60 million principal amount of our 6.00% Notes for approximately $20 million in cash and a gain of $11 million on acquiring the put option related to our holdings of UBS ARS, representing the fair value of this financial instrument.

Other expense, net in 2008 was $37 million compared to other expense, net of $118 million in 2007. During 2008, we recorded other than temporary impairment charges of $53 million related to our investment in Spansion Inc. and a $24 million other than temporary impairment charge related to our portfolio of ARS These losses were partially offset by a gain of $33 million recorded during the fourth quarter of 2008 due to the repurchase of $60 million principal amount of our 6.00% Notes for $20 million in cash. In addition, we recognized a gain of $11 million on acquiring the put option related to our holdings of UBS ARS, representing the fair value of this financial instrument. In 2007, we recorded other than temporary impairment charges of $111 million related to our investment in Spansion Inc. and a charge of $22 million for the write-off of unamortized debt issuance costs incurred in connection with our repayment of the October 2006 Term Loan. These charges were partially offset by a gain of $19 million on the sale of vacant land in Sunnyvale, California.

Other Income (Expense), Net

 

      2009     2008     2007  
     (In millions)  

Net gain (loss) on debt redemption

   $ 169      $ 33      $ (22

Gain on sale of certain Handheld assets

     28        —          —     

Gain on legal settlement

     25        —          —     

Loss on real estate transfer taxes related to GF

     (17     —          —     

Charge related to AMTC joint venture

     (10     —          —     

Impairment charges related to Spansion investment

     (3     (53     (111

Foreign exchange loss

     (27     —          —     

Gain (loss) on adjustments of ARS to fair value

     10        (24     —     

Gain (loss) on adjustments of UBS put option to fair value

     (9     11        —     

Gain on sale of vacant land in Sunnyvale, California

     —          —          19   

Other

     —          (4     (4

Other income (expense), net

   $ 166      $ (37   $ (118
This excerpt taken from the AMD 10-Q filed May 6, 2009.

Other Income (Expense), Net

Other income, net of $94 million in the first quarter of 2009 changed from other expense, net of $1 million in the first quarter of 2008. In the first quarter of 2009, we repurchased $158 million principal amount of our 6.00% Notes by paying approximately $57 million in cash, resulting in a gain of approximately $108 million. In addition, we recognized a gain of $28 million on the sale of certain Handheld assets. These gains were partially offset by a $17 million charge for real estate transfer taxes in connection with the GLOBALFOUNDRIES manufacturing joint venture transaction, a $10 million charge related to the AMTC joint venture described in more detail in the section “Off Balance Sheet Arrangements,” below and a $10 million foreign exchange loss.

Other income, net of $94 million in the first quarter of 2009 increased by $100 million from other income, net of $4 million in the fourth quarter of 2008. In the first quarter of 2009, we repurchased $158 million principal amount of our 6.00% Notes by paying approximately $57 million in cash, resulting in a gain of approximately $108 million. In addition, we recognized a gain of $28 million on the sale of certain Handheld assets. These gains were partially offset by a $17 million charge for real estate transfers taxes in connection with the GLOBALFOUNDRIES manufacturing joint venture transaction, a $10 million charge related to the AMTC joint venture and a $10 million foreign exchange loss. In the fourth quarter of 2008, we repurchased $60 million principal amount of our 6.00% Notes, resulting in a gain of approximately $27 million. In addition, we recognized a gain of $11 million related to the put option on our holdings of UBS auction rate securities (ARS) described in more detail below, representing the fair value of this financial instrument. These gains were partially offset by a $20 million other than temporary impairment charge related to our investment in Spansion Inc. and a $12 million other than temporary impairment charge related to our portfolio of ARS.

These excerpts taken from the AMD 10-K filed Feb 24, 2009.

Other Income (Expense), Net

Other income, net of $22 million in 2008 changed from other expense, net of $7 million in 2007. In the fourth quarter of 2008, we repurchased $60 million principal amount of our 6.00% Notes for $20 million in cash consideration. As a result, we recognized a gain of $39 million. In addition, we recognized a gain of $11 million on acquiring the put option related to our holdings of UBS ARS, representing the fair value of this financial instrument. These gains were partially offset by a $24 million other than temporary impairment charge related to our portfolio of ARS in 2008. In 2007, we incurred a charge of $22 million for the write-off of unamortized debt issuance costs incurred in connection with out repayment of the October 2006 Term Loan, which was partially offset by a gain of $19 million on the sale of vacant land in Sunnyvale, California.

Other expense, net of $7 million in 2007 decreased by $6 million from an other expense, net of $13 million in 2006 primarily due to a gain of $19 million on the sale of vacant land in Sunnyvale, California in 2007 and $6 million less in finance charges related to the Fab 36 Term Loan as compared to 2006. This decrease was offset by a non-recurring gain of $10 million associated with Spansion LLC’s repurchase of its 12.75% Senior

 

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Subordinated Notes due 2016 in 2006, a higher net charge of $2 million in 2007 due to charges for the write-off of unamortized debt issuance costs incurred in connection with our repayment of the October 2006 Term Loan and a reduction of $7 million in other income due primarily to impairment charges on an investment recorded in 2007.

Other Income (Expense), Net

FACE="Times New Roman" SIZE="2">Other income, net of $22 million in 2008 changed from other expense, net of $7 million in 2007. In the fourth quarter of 2008, we repurchased $60 million principal amount of our 6.00% Notes for $20 million in cash
consideration. As a result, we recognized a gain of $39 million. In addition, we recognized a gain of $11 million on acquiring the put option related to our holdings of UBS ARS, representing the fair value of this financial instrument. These gains
were partially offset by a $24 million other than temporary impairment charge related to our portfolio of ARS in 2008. In 2007, we incurred a charge of $22 million for the write-off of unamortized debt issuance costs incurred in connection with out
repayment of the October 2006 Term Loan, which was partially offset by a gain of $19 million on the sale of vacant land in Sunnyvale, California.

SIZE="2">Other expense, net of $7 million in 2007 decreased by $6 million from an other expense, net of $13 million in 2006 primarily due to a gain of $19 million on the sale of vacant land in Sunnyvale, California in 2007 and $6 million less in
finance charges related to the Fab 36 Term Loan as compared to 2006. This decrease was offset by a non-recurring gain of $10 million associated with Spansion LLC’s repurchase of its 12.75% Senior

 


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Subordinated Notes due 2016 in 2006, a higher net charge of $2 million in 2007 due to charges for the write-off of unamortized debt issuance costs incurred
in connection with our repayment of the October 2006 Term Loan and a reduction of $7 million in other income due primarily to impairment charges on an investment recorded in 2007.

FACE="Times New Roman" SIZE="2">Equity in net loss of Spansion Inc. and other

Following Spansion’s IPO in December 2005, our
ownership interest was diluted from 60 percent to approximately 38 percent, and we no longer exercised control over Spansion’s operations. Therefore, starting from December 21, 2005, we used the equity method of accounting to account for
our investment in Spansion.

In 2006, we sold 21 million shares of Spansion Class A common stock and realized a gain of $6
million from the sale. During 2007, we sold 13,491,493 shares of Spansion Class A common stock. We received $157 million in net proceeds and realized a loss of $1 million. We continued to use the equity method of accounting to account for our
investment in Spansion because, for accounting purposes, we were deemed to continue to have the ability to exercise significant influence over Spansion.

FACE="Times New Roman" SIZE="2">On September 20, 2007, Dr. Ruiz, our Executive Chairman, resigned as Chairman of Spansion’s Board of Directors. We also transferred our one share of Class B common stock to Spansion and, accordingly,
relinquished the right to appoint a director to Spansion’s Board of Directors. Therefore, we changed our accounting for our investment from the equity method of accounting to accounting for this investment as “available-for-sale”
marketable securities.

During 2007, we recorded other than temporary impairment charges of $111 million on our investment in Spansion
after considering Spansion’s operating results, its stock price trends, and our intention to liquidate our investment. As a result, as of December 29, 2007, our investment in Spansion was reflected at its then fair market value of $56
million.

During 2008, we recorded other than temporary impairment charges of $53 million after giving consideration to Spansion’s
operating results and its stock price trends. As of December 27, 2008, we owned a total of 14,037,910 shares, or approximately 8.7 percent of Spansion’s outstanding common stock with a carrying value of $3 million, which we included in the
caption “Marketable securities” on our 2008 consolidated balance sheet.

Other Income (Expense), Net

 

      2008     2007     2006  
     (In millions)  

Gain on repurchase of 6.00% Notes

   $ 39     $   —       $   —    

Write-off of unamortized debt issuance cost associated with October 2006 Term Loan

       (22 )     —    

Gain on sale of vacant land in Sunnyvale, California

       19       —    

Charges on redemption of 7.75% Notes

     —         —         (20 )

Fab 36 Term Loan commitment and guarantee fees

     (6 )     (6 )     (12 )

Gain on Spansion LLC’s repurchase of its 12.75% Notes

     —         —         10  

Other than temporary impairment charges on ARS

     (24 )     —         —    

UBS put option

     11      

Other

     2       2       9  

Other income (expense), net

   $ 22     $ (7 )   $ (13 )

Other Income (Expense), Net

 














































































































































































    2008  2007  2006 
   (In millions) 

Gain on repurchase of 6.00% Notes

  $39  $  —    $  —   

Write-off of unamortized debt issuance cost associated with October 2006 Term Loan

    (22)  —   

Gain on sale of vacant land in Sunnyvale, California

    19   —   

Charges on redemption of 7.75% Notes

   —     —     (20)

Fab 36 Term Loan commitment and guarantee fees

   (6)  (6)  (12)

Gain on Spansion LLC’s repurchase of its 12.75% Notes

   —     —     10 

Other than temporary impairment charges on ARS

   (24)  —     —   

UBS put option

   11   

Other

   2   2   9 

Other income (expense), net

  $22  $(7) $(13)
This excerpt taken from the AMD DEF 14A filed Jan 16, 2009.

Other Income (Expense), Net

 

     2007     2006     2005  
     (In millions)  

Write-off of unamortized debt issuance cost associated to October 2006 Term Loan

   $ (22 )   $ —       $ —    

Gain on sale of vacant land in Sunnyvale, California

     19       —         —    

Charges on redemption of 7.75% Notes

     —         (20 )     —    

Fab 36 Term Loan commitment and guarantee fees

     (6 )     (12 )     (14 )

Gain on Spansion LLC’s repurchase of its 12.75% Notes

     —         10       —    

Loss on ineffective hedge

     —         —         (10 )

Other

     2       9       —    
                        

Other income (expense), net

   $ (7 )   $ (13 )   $ (24 )
                        
This excerpt taken from the AMD 8-K filed Jan 9, 2009.

Other Income (Expense), Net

 

     2007     2006     2005  
     (In millions)  

Write-off of unamortized debt issuance cost associated to October 2006 Term Loan

   $ (22 )   $ —       $ —    

Gain on sale of vacant land in Sunnyvale, California

     19       —         —    

Charges on redemption of 7.75% Notes

     —         (20 )     —    

Fab 36 Term Loan commitment and guarantee fees

     (6 )     (12 )     (14 )

Gain on Spansion LLC’s repurchase of its 12.75% Notes

     —         10       —    

Loss on ineffective hedge

     —         —         (10 )

Other

     2       9       —    
                        

Other income (expense), net

   $ (7 )   $ (13 )   $ (24 )
                        
This excerpt taken from the AMD 10-Q filed Nov 6, 2008.

Other Income/Expense, Net

Other Expense, net of $4 million in the third quarter of 2008 was approximately flat compared to other expense, net of $1 million in the third quarter of 2007.

Other Expense, net of $4 million, in the third quarter of 2008 decreased by $6 million compared to the second quarter of 2008 primarily due to a $12 million other than temporary impairment charge related to our portfolio of ARS recorded in the second quarter of 2008. See “Financial Condition – Liquidity-Auction Rate Securities” below, for more information.

Other Expense, net of $15 million, in the first nine months of 2008 increased by $8 million compared to the first nine months of 2007. In the second quarter of 2008, we recorded a $12 million other than temporary impairment charge related to our portfolio of ARS. However, this was offset by a $5 million charge in the second quarter of 2007 related to unamortized debt issuance costs associated with the redemption of $500 million of the principal outstanding amount of the October 2006 Term Loan.

This excerpt taken from the AMD 10-Q filed Aug 6, 2008.

Other Income/Expense, Net

Other Expense, net of $10 million in the second quarter of 2008 increased by $1 million compared to the second quarter of 2007. In the second quarter of 2008, we recorded a $12 million other than temporary impairment charge related to our portfolio of auction rate securities, or ARS. See “Financial Condition – Liquidity-Auction Rate Securities” for more information. However, this was offset by a $5 million charge in the second quarter of 2007 related to unamortized debt issuance costs associated with the redemption of $500 million of the principal outstanding amount of the October 2006 Term Loan, which did not recur during the second quarter of 2008.

Other Expense, net of $10 million, in the second quarter of 2008 increased by $9 million compared to the first quarter of 2008 primarily due to a $12 million other than temporary impairment charge related to our portfolio of ARS recorded in the second quarter of 2008. See “Financial Condition – Liquidity-Auction Rate Securities” for more information.

Other Expense, net of $11 million in the first six months of 2008 increased by $4 million compared to the first six months of 2007. In the second quarter of 2008, we recorded a $12 million other than temporary impairment charge related to our portfolio of ARS. However, this was offset by a $5 million charge in the second quarter of 2007 related to unamortized debt issuance costs associated with the redemption of $500 million of the principal outstanding amount of the October 2006 Term Loan.

These excerpts taken from the AMD 10-K filed Feb 26, 2008.

Other Income (Expense), Net

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Other income (expense), net, of an expense of seven million in 2007 decreased six million from an expense of $13 million in 2006 primarily due to a gain
of $19 million on the sale of vacant land in Sunnyvale, California in 2007 and six million less in finance charges related to the Fab 36 Term Loan as compared to 2006. This decrease was offset by a non-recurring gain of $10 million associated with
Spansion LLC’s repurchase of its 12.75% Senior Subordinated Notes due 2016 in 2006, a higher net charge of two million in 2007 due to charges for the write-off of unamortized debt issuance costs incurred in connection with our repayment of the
October 2006 Term Loan and a reduction of seven million in other income due primarily to impairment charges on an investment recorded in 2007.

SIZE="2">Other income (expense), net, of an expense of $13 million in 2006 decreased by $11 million as compared with an expense of $24 million in 2005 primarily due to: a non-recurring loss of approximately $10 million during the fourth quarter of
2005 resulting from the mark-to-market to earnings of certain foreign currency forward contracts which became ineffective in hedging against certain forecasted foreign currency transactions; a gain of $10 million associated with Spansion LLC’s
repurchase of its 12.75% Senior Subordinated Notes due 2016 in 2006; an increase in other income of nine million primarily related to a gain on an investment and lower finance charges related to the Fab 36 Term Loan of two million in 2006 as
compared to 2005. The decrease was offset by a charge of $16 million related to a debt redemption premium and a charge of four million related to unamortized issuance costs incurred in connection with our redemption of 35 percent of the principal
outstanding amount, or $210 million, of our 7.75% Notes in 2006.

Other Income (Expense), Net

 

      2007     2006     2005  
     (In millions)  

Write-off of unamortized debt issuance cost associated to October 2006 Term Loan

   $ (22 )   $ —       $ —    

Gain on sale of vacant land in Sunnyvale, California

     19       —         —    

Charges on redemption of 7.75% Notes

     —         (20 )     —    

Fab 36 Term Loan commitment and guarantee fees

     (6 )     (12 )     (14 )

Gain on Spansion LLC’s repurchase of its 12.75% Notes

     —         10       —    

Loss on ineffective hedge

     —         —         (10 )

Other

     2       9       —    

Other income (expense), net

   $ (7 )   $ (13 )   $ (24 )
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