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Document and Entity Information Document (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Feb. 13, 2015
Jun. 28, 2014
Document Information [Line Items]
Document Type 10-K
Amendment Flag false
Document Period End Date Dec 27, 2014
Document Fiscal Year Focus 2014
Document Fiscal Period Focus FY
Trading Symbol AMD
Entity Registrant Name ADVANCED MICRO DEVICES INC
Entity Central Index Key 0000002488
Current Fiscal Year End Date --12-27
Entity Well-known Seasoned Issuer Yes
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 777,300,258
Entity Public Float $ 2.6
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Consolidated Statements of Operations (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Net revenue $ 5,506 $ 5,299 $ 5,422
Cost of sales 3,667 3,321 4,187
Gross margin 1,839 1,978 1,235
Research and development 1,072 1,201 1,354
Marketing, general and administrative 604 674 823
Amortization of acquired intangible assets 14 18 14
Restructuring and other special charges, net 71 30 100
Goodwill impairment charge 233 0 0
Legal settlements, net 0 (48) 0
Operating income (loss) (155) 103 (1,056)
Interest income 3 5 8
Interest expense (177) (177) (175)
Other income (expense), net (69) (5) 6
Loss before income taxes (398) (74) (1,217)
Provision (benefit) for income taxes 5 9 (34)
Net loss $ (403) $ (83) $ (1,183)
Basic
Basic net loss per share $ (0.53) $ (0.11) $ (1.6)
Diluted
Diluted net loss per share $ (0.53) $ (0.11) $ (1.6)
Shares used in per share calculation
Basic 768 754 741
Diluted 768 754 741
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Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Net loss $ (403) $ (83) $ (1,183)
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) arising during period, net of tax effect of zero 0 (1) 1
Reclassification adjustment for (gains) losses realized and included in net loss, net of tax effect of zero 0 2 0
Total change in unrealized gains (losses) on available-for-sale securities, net of tax 0 1 1
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during period, net of tax benefit (expense) of $0, $0 and $1 (9) (6) 1
Reclassification adjustment for (gains) losses realized and included in net loss, net of tax expense (benefit) of $0, $3 and $0 6 6 0
Total change in unrealized gains (losses) on cash flow hedges, net of tax (3) 0 1
Total other comprehensive income (loss) (3) 1 2
Total comprehensive loss $ (406) $ (82) $ (1,181)
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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (Parentheticals) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Tax effect related to available-for-sale securities:
Unrealized gains (losses) arising during period, net of tax benefit (expense) $ 0 $ 0 $ 0
Reclassification adjustment for (gains) losses realized and included in net income (loss), net of tax expense (benefit) 0 0 0
Tax effect related to cash flow hedges:
Unrealized gains (losses) arising during period, net of tax benefit (expense) 0 0 1
Reclassification adjustment for (gains) losses realized and included in net income (loss), net of tax expense (benefit) $ 0 $ 3 $ 0
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Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Current assets:
Cash and cash equivalents $ 805 $ 869
Marketable securities 235 228
Accounts receivable, net 818 832
Inventories, net 685 884
Prepayments to GLOBALFOUNDRIES 113 0
Prepaid expenses and other current assets 80 71
Total current assets 2,736 2,884
Long-term marketable securities 0 90
Property, plant and equipment, net 302 346
Acquisition related intangible assets, net 65 78
Goodwill 320 553
Other assets 344 386
Total assets 3,767 4,337
Current liabilities:
Short-term debt 177 60
Accounts payable 415 519
Payable to GLOBALFOUNDRIES 218 364
Accrued and other current liabilities 558 530
Deferred income on shipments to distributors 72 145
Total current liabilities 1,440 1,618
Long-term debt 2,035 1,998
Other long-term liabilities 105 177
Stockholders’ equity:
Common stock, par value $0.01; 1,500 shares authorized on December 27, 2014 and December 28, 2013; shares issued: 788 shares on December 27, 2014 and 735 shares on December 28, 2013; shares outstanding: 776 shares on December 27, 2014 and 725 shares on December 28, 2013 8 7
Additional paid-in capital 6,949 6,894
Treasury stock, at cost (12 shares on December 27, 2014 and 10 shares on December 28, 2013) (119) (112)
Accumulated deficit (6,646) (6,243)
Accumulated other comprehensive loss (5) (2)
Total stockholders’ equity 187 544
Total liabilities and stockholders’ equity $ 3,767 $ 4,337
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Consolidated Balance Sheets (Parenthetical) (Parentheticals) (USD $)
In Millions, except Per Share data, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 1,500 1,500
Common stock, shares issued 788 735
Common stock, shares outstanding 776 725
Treasury stock, shares 12 10
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Consolidated Statements of Stockholders’ Equity (USD $)
In Millions, except Share data
Total
USD ($)
Number of Shares
Common Stock
USD ($)
Additional Paid-in Capital
USD ($)
Treasury Stock
USD ($)
Accumulated Deficit
USD ($)
Accumulated Other Comprehensive Income (Loss)
USD ($)
Balance at Dec. 31, 2011 $ 1,590 $ 7 $ 6,672 $ (107) $ (4,977) $ (5)
Balance, shares at Dec. 31, 2011 698,000,000
Net loss (1,183) (1,183)
Other comprehensive income (loss) 2 2
Common stock issued under stock-based compensation plans 13 15
Adjustments related to tax withholding for stock-based compensation (2)
Common stock issued under stock-based compensation plans, shares 15,000,000
Stock-based compensation 97 97
Assumption of employee stock plan awards in connection with the acquisition of SeaMicro, Inc. 19 19
Balance at Dec. 29, 2012 538 7 6,803 (109) (6,160) (3)
Balance, shares at Dec. 29, 2012 713,000,000
Net loss (83) (83)
Other comprehensive income (loss) 1 1
Common stock issued under stock-based compensation plans 0 3
Adjustments related to tax withholding for stock-based compensation (3)
Common stock issued under stock-based compensation plans, shares 12,000,000
Stock-based compensation 91 91
Adjustment to equity component of the 6.00% Notes resulting from debt buyback (3) (3)
Balance at Dec. 28, 2013 544 7 6,894 (112) (6,243) (2)
Balance, shares at Dec. 28, 2013 725,000,000
Net loss (403) (403)
Other comprehensive income (loss) (3) (3)
Common stock issued under stock-based compensation plans (2) 4
Adjustments related to tax withholding for stock-based compensation (6)
Common stock issued by exercise of warrants 35,000,000
Common stock issued 1
Treasury stock acquired (1)
Common stock issued under stock-based compensation plans, shares 16,000,000
Stock-based compensation 81 81
stock-based compensation related to restructuring and other special charges 5 5
Adjustment to equity component of the 6.00% Notes resulting from debt buyback (35) (35)
Balance at Dec. 27, 2014 $ 187 $ 8 $ 6,949 $ (119) $ (6,646) $ (5)
Balance, shares at Dec. 27, 2014 776,000,000
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Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Cash flows from operating activities:
Net loss $ (403) $ (83) $ (1,183)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash portion of the limited waiver of exclusivity from GLOBALFOUNDRIES 0 0 278
Depreciation and amortization 203 236 260
Net loss on disposal of property, plant and equipment 0 31 1
Deferred income taxes 0 1 (40)
Stock-based compensation expense 81 91 97
Non-cash interest expense 17 25 23
Goodwill impairment charge 233 0 0
Restructuring and other special charges, net 14 0 4
Net loss on debt redemptions 61 1 0
Other (13) (2) 2
Changes in operating assets and liabilities:
Accounts receivable 7 (200) 290
Inventories 199 (322) (83)
Prepayments to GLOBALFOUNDRIES (113) 0 0
Prepaid expenses and other assets (7) (103) (32)
Accounts payables, accrued liabilities and other (231) 266 (232)
Payable to GLOBALFOUNDRIES (146) (89) 277
Net cash used in operating activities (98) (148) (338)
Cash flows from investing activities:
Acquisition of SeaMicro, Inc., net of cash acquired 0 0 (281)
Purchases of available-for-sale securities (790) (1,043) (944)
Purchases of property, plant and equipment (95) (84) (133)
Proceeds from sales and maturities of available-for-sale securities 873 1,344 1,348
Proceeds from sale of property, plant and equipment 0 238 0
Other 0 0 (9)
Net cash provided by (used in) investing activities (12) 455 (19)
Cash flows from financing activities:
Proceeds from borrowings, net 1,155 55 491
Proceeds from issuance of common stock 4 3 14
Net proceeds from grants and allowances 8 11 23
Repayments of long-term debt and capital lease obligations (1,115) (55) (489)
Other (6) (1) (2)
Net cash provided by financing activities 46 13 37
Net increase (decrease) in cash and cash equivalents (64) 320 (320)
Cash and cash equivalents at beginning of year 869 549 869
Cash and cash equivalents at end of year 805 869 549
Supplemental disclosures of cash flow information:
Cash paid during the year for interest 138 152 142
Cash paid during the year for income taxes $ 7 $ 9 $ 9
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Nature of Operations
12 Months Ended
Dec. 27, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations
Nature of Operations
Advanced Micro Devices, Inc. is a global semiconductor company with facilities worldwide. References herein to AMD or the Company mean Advanced Micro Devices, Inc. and its consolidated subsidiaries. The Company provides:
(i)
x86 microprocessors, as standalone devices or as incorporated as an accelerated processing unit (APU), chipsets, discrete graphics processing units (GPUs) and professional graphics; and
(ii)
server and embedded processors, dense servers, semi-custom System-on-Chip (SoC) products and technology for game consoles.
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Significant Accounting Policies
12 Months Ended
Dec. 27, 2014
Accounting Policies [Abstract]
Summary of Significant Accounting Policies
2: Summary of Significant Accounting Policies
Fiscal Year. The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. Fiscal 2014, 2013 and 2012 ended December 27, 2014, December 28, 2013 and December 29, 2012, respectively, each consisted of 52 weeks.
Principles of Consolidation. The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. Upon consolidation, all significant intercompany accounts and transactions are eliminated.
Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results are likely to differ from those estimates, and such differences may be material to the financial statements. Areas where management uses subjective judgment include, but are not limited to, revenue allowances, inventory valuation, valuation and impairment of goodwill, valuation of investments in marketable securities, deferred income taxes and restructuring charges.
Revenue Recognition. The Company recognizes revenue from products sold directly to customers, including original equipment manufacturers (OEMs), when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred and collectability is reasonably assured. Estimates of product returns, allowances and future price reductions, based on actual historical experience and other known or anticipated trends and factors, are recorded at the time revenue is recognized. The Company sells to distributors under terms allowing the majority of distributors certain rights of return and price protection on unsold merchandise held by them. The distributor agreements, which may be cancelled by either party upon specified notice, generally contain a provision for the return of those of the Company’s products that the Company has removed from its price book and that are not more than 12 months older than the manufacturing code date. In addition, some agreements with distributors may contain standard stock rotation provisions permitting limited levels of product returns. Therefore, the Company is unable to estimate the product returns and pricing when the product is sold to the distributors. Accordingly, the Company defers the gross margin resulting from the deferral of both revenue and related product costs from sales to distributors with agreements that have the aforementioned terms until the merchandise is resold by the distributors and reports such deferred amounts as “Deferred income on shipments to distributors” on its consolidated balance sheet. Products are sold to distributors at standard published prices that are contained in price books that are broadly provided to the Company’s various distributors. Distributors are then required to pay for these products within the Company's standard contractual terms, which are typically net 60 days. The Company records allowances for price protection given to distributors and customer rebates in the period of distributor re-sale. The Company determines these allowances based on specific contractual terms with its distributors. Price reductions generally do not result in sales prices that are less than the Company’s product cost. Deferred income on shipments to distributors is revalued at the end of each period based on the change in inventory units at distributors, latest published prices and latest product costs.
The Company records estimated reductions to revenue under distributor and customer incentive programs, including certain cooperative advertising and marketing promotions and volume based incentives and special pricing arrangements, at the time the related revenues are recognized. For transactions where the Company reimburses a customer for a portion of the customer’s cost to perform specific product advertising or marketing and promotional activities, such amounts are recorded as a reduction of revenue unless they qualify for expense recognition. Shipping and handling costs associated with product sales are included in cost of sales.
Deferred revenue and related product costs were as follows:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Deferred revenue
$
130

 
$
253

Deferred cost of sales
(58
)
 
(108
)
Deferred income on shipments to distributors
$
72

 
$
145


Inventories. Inventories are stated at standard cost adjusted to approximate the lower of actual cost (first-in, first-out method) or market. The Company adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The Company fully reserves for inventories and noncancelable purchase orders for inventory deemed obsolete. The Company performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by the Company, additional inventory adjustments may be required.
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired. In accordance with Accounting Standards Codification (ASC) 350, “Goodwill and Other Intangible Assets,” goodwill is not amortized, but rather is tested for impairment at least annually or more frequently if indicators of impairment present. The Company performs its annual goodwill impairment analysis as of the first day of the fourth quarter of each year and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The analysis of potential impairment of goodwill requires a two-step process. The first step of the impairment test is to compare the fair value of each reporting unit to its carrying value. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value.
Commitments and Contingencies. From time to time the Company is a defendant or plaintiff in various legal actions that arise in the normal course of business. The Company is also a party to environmental matters, including local, regional, state and federal government clean-up activities at or near locations where the Company currently or has in the past conducted business. The Company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of reasonably possible losses. A determination of the amount of reserves required for these commitments and contingencies, if any, that would be charged to earnings, includes assessing the probability of adverse outcomes and estimating the amount of potential losses. The required reserves, if any, may change in the future due to new developments in each matter or changes in circumstances such as a change in settlement strategy. Changes in required reserves could increase or decrease the Company’s earnings in the period the changes are made. (See Notes 15 and 16).
Restructuring Charges. Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on the Company's policies and practices and negotiated settlements.
Cash Equivalents. Cash equivalents consist of financial instruments that are readily convertible into cash and have original maturities of three months or less at the time of purchase.
Investments in Certain Debt and Equity Securities. The Company classifies its investments in debt and marketable equity securities at the date of acquisition as available-for-sale. Available-for-sale securities are reported at fair value with the related unrealized gains and losses included, net of tax, in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses and declines in the value of available-for-sale securities determined to be other than temporary are included in other income (expense), net. The cost of securities sold is determined based on the specific identification method.
The Company classifies investments in debt securities with maturities of more than three months at the time of purchase as marketable securities on its consolidated balance sheet. Classification of these securities as current is based on the Company's intent and belief in its ability to sell these securities and use the proceeds from sale in operations within 12 months.
Derivative Financial Instruments. The Company maintains a foreign currency hedging strategy which uses derivative financial instruments to mitigate the risks associated with changes in foreign currency exchange rates. This strategy takes into consideration all of the Company’s consolidated exposures. The Company does not use derivative financial instruments for trading or speculative purposes.
In applying its strategy, the Company used foreign currency forward contracts to hedge certain forecasted expenses denominated in foreign currencies. The Company designated these contracts as cash flow hedges of forecasted expenses, to the extent eligible under the accounting rules, and evaluates hedge effectiveness prospectively and retrospectively. As such, the effective portion of the gain or loss on these contracts is reported as a component of accumulated other comprehensive loss and reclassified to earnings in the same line item as the associated forecasted transaction and in the same period during which the hedged transaction affects earnings. Any ineffective portion is immediately recorded in earnings.
The Company also uses, from time to time, foreign currency forward contracts to economically hedge recognized foreign currency exposures on the balance sheets of various subsidiaries, primarily those denominated in Canadian dollars. The Company does not designate these forward contracts as hedging instruments. Accordingly, the gain or loss associated with these contracts is immediately recorded in earnings.
Property, Plant and Equipment. Property, plant and equipment are stated at cost. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets for financial reporting purposes. Estimated useful lives for financial reporting purposes are as follows: equipment, two to six years; buildings and building improvements, up to 40 years; and leasehold improvements, measured by the shorter of the remaining terms of the leases or the estimated useful economic lives of the improvements.
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 CPU and AMD APU A-Series products that are commonly referred to as “processors in a box” for PC workstation products. The Company has also offered extended limited warranties to certain customers of “tray” microprocessor products and/or workstation 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 2014, 2013 and 2012 were approximately $194 million, $210 million and $287 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.
Diluted net income per share is computed based on the weighted-average number of shares outstanding plus any potentially dilutive shares outstanding. Potentially dilutive shares include stock options, restricted stock, restricted stock units and shares issuable upon the conversion of convertible debt.
The following table sets forth the components of basic and diluted loss per share:
 
2014
 
2013
 
2012
 
(In millions, except per share amounts)
Numerator—Net loss:
 
 
 
 
 
Numerator for basic and diluted net loss per share
$
(403
)
 
$
(83
)
 
$
(1,183
)
Denominator—Weighted-average shares:
 
 
 
 
 
Denominator for basic and diluted net loss per share
768

 
754

 
741

Net loss per share:
 
 
 
 
 
Basic
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)
Diluted
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)

Potential shares from outstanding stock options, restricted stock and restricted stock units totaling approximately 48 million, 59 million and 45 million for 2014, 2013 and 2012, respectively, were not included in the net loss per share calculations as their inclusion would have been anti-dilutive.
Potential shares issuable under the Company’s 5.75% Convertible Senior Notes due 2012 (5.75% Notes) totaling 15 million for 2012 were not included in the net loss per share calculations as their inclusion would have been anti-dilutive. The 5.75% Notes were fully repaid on August 15, 2012.
Accumulated Other Comprehensive Loss. Unrealized holding gains or losses on the Company’s available-for-sale securities, unrealized holding gains and losses on derivative financial instruments qualifying as cash flow hedges and changes in minimum pension liabilities are included in other comprehensive loss.
The table below summarizes the changes in accumulated other comprehensive loss by component for the years ended December 27, 2014 and December 28, 2013:
 
December 27,
2014
 
December 28,
2013
 
Unrealized gains (losses) on available-for-sale securities
 
Unrealized gains (losses) on cash flow hedges
 
Total
 
Unrealized gains (losses) on available-for-sale securities
Unrealized gains (losses) on cash flow hedges
 
Total
 
(In millions)
Beginning balance
$
1

 
$
(3
)
 
$
(2
)
 
$

$
(3
)
 
$
(3
)
Unrealized gains (losses) arising during the period, net of tax effects

 
(9
)
 
(9
)
 
(1
)
(6
)
 
(7
)
Reclassification adjustment for (gains) losses realized and included in net loss, net of tax effects

 
6

 
6

 
2

6

 
8

Total other comprehensive income (loss)

 
(3
)
 
(3
)
 
1


 
1

Ending balance
$
1

 
$
(6
)
 
$
(5
)
 
$
1

$
(3
)
 
$
(2
)

Stock-Based Compensation. The Company estimates stock-based compensation cost for stock options at the grant date based on the option’s fair-value as calculated by the lattice-binomial option-pricing model. For restricted stock and restricted stock units, fair value is based on the closing price of the Company’s common stock on the grant date. The Company estimates the grant-date fair value of stock options, restricted stock and restricted stock units that involve a market condition using a Monte Carlo simulation model. The expense is recognized using the single option method which is ratable on a straight-line basis over the requisite service period.
The application of the lattice-binomial option-pricing model requires the use of extensive actual employee exercise behavior data and the use of a number of complex assumptions including expected volatility of the Company’s common stock, risk-free interest rate and expected dividends. Significant changes in any of these assumptions could materially affect the fair value of stock options granted in the future.
Forfeiture rates are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates in order to derive the Company’s best estimate of awards ultimately expected to vest.
Recently Issued Accounting Standards
Disclosure of Going Concern Uncertainties. In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 will be effective in the fourth quarter of 2016, with early adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2014-15 on its consolidated financial statements.
Share-Based Payments with Performance Targets. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target be treated as a performance condition if it affects vesting and could be achieved after the requisite service period is rendered. ASU 2014-12 will be effective in the first quarter of 2016, with early adoption permitted. The Company may use either of two methods: (i) prospective application to all awards granted or modified after the effective date or (ii) retrospective application to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently evaluating the impact of its pending adoption of ASU 2014-12 on its consolidated financial statements and has not yet determined which method it will apply.
Revenue Recognition. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), which creates a single source of revenue guidance under U.S. GAAP for all companies in all industries. The core principle of ASU 2014-09 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates. ASU 2014-09 also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. ASU 2014-09 will be effective for the Company in the first quarter of 2017 and early adoption is not permitted. The Company may adopt ASU 2014-09 either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined which approach it will apply.
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GLOBALFOUNDRIES
12 Months Ended
Dec. 27, 2014
Related Party Transactions [Abstract]
GLOBALFOUNDRIES
GLOBALFOUNDRIES
Formation and Accounting
On March 2, 2009, the Company consummated the transactions contemplated by the Master Transaction Agreement among the Company, Advanced Technology Investment Company LLC (currently known as Mubadala Technology Investments LLC (Mubadala Tech)) and West Coast Hitech L.P. (WCH), pursuant to which the Company formed GLOBALFOUNDRIES Inc. (GF). In connection with the consummation of the transactions contemplated by the Master Transaction Agreement, the Company, 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.
At GF’s formation on March 2, 2009 and through December 26, 2009, GF was deemed a variable-interest entity, and the Company was deemed to be GF's primary beneficiary. Accordingly, the Company consolidated GF under applicable accounting rules. As a result of certain GF governance changes, the Company deconsolidated GF and accounted for its GF ownership under the equity method of accounting as of December 27, 2009. Following the deconsolidation, GF became the Company’s related party.
In the first quarter of 2011, as a result of a contribution to GF by an affiliate of Mubadala Tech and certain GF governance changes noted above, the Company’s ownership in GF was diluted, and the Company concluded that it no longer had the ability to exercise significant influence over GF. Accordingly, the Company changed the accounting for the investment in GF from the equity method to the cost method of accounting and recognized a dilution gain in investee of approximately $492 million. In the fourth quarter of 2011, the Company identified indicators of impairment in GF that were deemed other than temporary. The Company performed a valuation analysis and recorded a non-cash impairment charge of $209 million. The carrying value of the Company’s remaining investment in GF after the impairment charge was $278 million as of December 31, 2011.
On March 4, 2012, as partial consideration for certain rights received under a second amendment to the WSA, the Company transferred to GF all of the remaining capital stock of GF that the Company owned. In addition, as of March 4, 2012, the Funding Agreement was terminated, and the Company was no longer party to the Shareholders’ Agreement. As a result of these transactions, the Company no longer owned any GF capital stock as of March 4, 2012.
GF continues to be a related party of the Company because Mubadala Development Company PJSC (Mubadala) and Mubadala Tech are affiliated with WCH, the Company's largest stockholder. WCH and Mubadala Tech are wholly-owned subsidiaries of Mubadala.
Wafer Supply Agreement
The WSA governs the terms by which the Company purchases products manufactured by GF. Pursuant to the WSA, the Company is required to purchase all microprocessor and APU product requirements from GF, with limited exceptions. If the Company acquires a third party business that manufactures microprocessor and APU products, the Company will have up to two years to transition the manufacture of such microprocessor and APU products to GF.
The WSA terminates no later than March 2, 2024. GF has agreed to use commercially reasonable efforts to assist the Company to transition the supply of products to another provider and to continue to fulfill purchase orders for up to two years following the termination or expiration of the WSA. During the transition period, pricing for microprocessor and APU products will remain as set forth in the WSA, but the Company’s purchase commitments to GF will no longer apply.
On April 2, 2011, the Company entered into a first amendment to the WSA. The primary effect of the first amendment was to change the pricing methodology applicable to wafers delivered in 2011 for the Company’s microprocessors and APU products. The first amendment also modified the existing commitments regarding the production of certain GPU and chipset products at GF.
On March 4, 2012, the Company entered into a second amendment to the WSA. The primary effect of the second amendment was to modify certain pricing and other terms of the WSA applicable to wafers for the Company’s microprocessor and APU products to be delivered by GF to the Company during 2012. Under the terms of the second amendment to the WSA, GF granted the Company rights to contract with another wafer foundry supplier with respect to specified 28nm products for a specified period of time (the limited waiver of exclusivity). In consideration for the limited waiver of exclusivity, the Company recorded a charge of $703 million in the first quarter of 2012, consisting of a $425 million cash payment and a $278 million non-cash charge representing the transfer to GF of the Company’s remaining investment in GF at fair value.
On December 6, 2012, the Company entered into a third amendment to the WSA. Pursuant to the third amendment, the Company modified its wafer purchase commitments for the fourth quarter of 2012 made pursuant to the second amendment to the WSA. In addition, the Company agreed to certain pricing and other terms of the WSA applicable to wafers for its microprocessor and APU products to be delivered by GF to the Company from the fourth quarter of 2012 through December 31, 2013. Pursuant to the third amendment, GF agreed to waive a portion of the Company's wafer purchase commitments for the fourth quarter of 2012. In consideration for this waiver, the Company agreed to pay GF a fee of $320 million. As a result, the Company recorded a lower of cost or market charge of $273 million for the write-down of inventory to its market value in the fourth quarter of 2012. The cash impact of this $320 million fee was paid over several quarters, with $80 million paid on December 28, 2012, $40 million paid on April 1, 2013 and $200 million paid on December 31, 2013.
On March 30, 2014, the Company entered into a fourth amendment to the WSA. The primary effect of the fourth amendment was to establish volume purchase commitments and fixed pricing for the 2014 calendar year as well as to modify certain other terms of the WSA applicable to wafers for some of the Company’s microprocessor, graphics processor and semi-custom game console products to be delivered by GF to us during the 2014 calendar year.
The total purchases from GF related to wafer manufacturing and research and development activities for 2014, 2013 and 2012 were $1.0 billion, $1.0 billion and $1.2 billion, respectively.
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Sale and Leaseback Transactions (Notes)
12 Months Ended
Dec. 27, 2014
Leases [Abstract]
Sale Leaseback Transaction Disclosure [Text Block]
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 lease for 4 years, at the end of the initial operating 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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Supplemental Balance Sheet Information
12 Months Ended
Dec. 27, 2014
Balance Sheet Related Disclosures [Abstract]
Supplemental Balance Sheet Disclosures
Supplemental Balance Sheet Information
Inventories
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Raw materials
$
40

 
$
30

Work in process
431

 
727

Finished goods
214

 
127

Total inventories, net
$
685

 
$
884


Property, plant and equipment
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Land and land improvements
$
4

 
$
3

Buildings and leasehold improvements
246

 
246

Equipment
1,416

 
1,466

Construction in progress
14

 
18

 
1,680

 
1,733

Accumulated depreciation and amortization
(1,378
)
 
(1,387
)
Total property, plant and equipment, net
$
302

 
$
346


Depreciation expense for 2014, 2013 and 2012 was $115 million, $139 million and $179 million, respectively.
Other assets
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Software and technology licenses
$
219

 
$
280

Other
125

 
106

Total other assets
$
344

 
$
386


Accrued and other current liabilities
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Accrued compensation and benefits
$
139

 
$
186

Marketing programs and advertising expenses
141

 
150

Software technology and licenses payable
39

 
27

Other accrued and current liabilities
239

 
167

Total accrued and other current liabilities
$
558

 
$
530

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Goodwill and Acquired Intangible Assets
12 Months Ended
Dec. 27, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Acquired Intangible Assets
Goodwill and Acquired Intangible Assets
Goodwill
The carrying amounts of goodwill as of December 27, 2014 and December 28, 2013 were as follows:
 
Computing and Graphics
 
Enterprise, Embedded and Semi-Custom
 
All Other
 
Total
 
(In millions)
Initial goodwill due to ATI acquisition
$
1,194

 
$
255

 
$
745

 
$
2,194

Initial goodwill due to SeaMicro acquisition
165

 
65

 

 
230

 
1,359

 
320

 
745

 
2,424

Accumulated impairment losses
(1,126
)
 

 
(745
)
 
(1,871
)
Balance as of December 29, 2012
233

 
320

 

 
553

Impairment charges

 

 

 

Balance as of December 28, 2013
233

 
320

 

 
553

Impairment charges
(233
)
 

 

 
(233
)
Balance as of December 27, 2014

 
320

 

 
320

Accumulated impairment losses
$
(1,359
)
 
$

 
$
(745
)
 
$
(2,104
)

In the third quarter of 2014, the Company’s realignment of its organizational structure, effective July 1, 2014, caused a change in the composition of the Company’s reportable segments and reporting units. This represented a change in circumstance requiring the reassignment of the goodwill to the new reporting units using a relative fair value approach and an interim goodwill impairment analysis before and after the Company’s reorganization. The Company completed this goodwill impairment analysis during the third quarter of 2014. For purposes of this analysis, the Company’s estimates of fair value were based on the income approach, which estimates the fair value of the Company’s reporting units based on future discounted cash flows. The Company determined that each reporting unit's estimated fair value exceeded its carrying value, indicating that there was no goodwill impairment.
During the fourth quarter of 2014, the Company conducted its annual impairment test of goodwill.  In step one of the impairment test, the Company compared the fair value of each of the reporting units to its carrying value.  The Company determined that the carrying value of the Computing and Graphics reporting unit exceeded its fair value, indicating potential goodwill impairment existed based on a combination of factors such as a decline in stock price. Therefore, the Company performed the second step of the impairment test, in which the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit on a fair value basis, including any unrecognized intangible assets, with any excess representing the implied fair value of goodwill.  The fair value was determined using an income approach, which estimates the present value of future cash flows based on management’s forecast of revenue growth rates and operating margins. Based on this analysis, the implied fair value of the goodwill of the Computing and Graphics reporting unit was zero. The Company concluded that the carrying amount of goodwill assigned to the Computing and Graphics segment exceeded the implied fair values and recorded an impairment charge of $233 million, which is included in “Goodwill impairment charge” on the Company’s consolidated statement of operations.
The Company determined that the estimated fair value exceeded the carrying value of the remaining two reporting units, indicating that there was no goodwill impairment with respect to these reporting units. In connection with completing the goodwill impairment analysis, the Company reviewed its long-lived tangible and intangible assets within the Computing and Graphics reporting unit under ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The Company determined that the forecasted undiscounted cash flows related to these assets or asset groups were in excess of their carrying values, and therefore these assets were not impaired.
In the fourth quarters of 2013 and 2012, the Company conducted its annual impairment tests of goodwill. Based on the results of the Company’s analysis of goodwill, each reporting unit’s fair value exceeded its carrying value, indicating that there was no goodwill impairment in 2013 or 2012.
Acquisition-related intangible assets
The balances of acquisition-related intangible assets as of December 27, 2014 and December 28, 2013 were as follows:
 
 
December 27, 2014
 
December 28, 2013
 
 
Gross
 
Accumulated Amortization
 
Net
 
Weighted-average amortization period
 
Gross
 
Accumulated Amortization
 
Net
 
 
(In millions, except years)
Developed technology
 
$
258

 
$
(201
)
 
$
57

 
5.15 years
 
$
258

 
$
(189
)
 
$
69

In-process research and development
 
6

 

 
6

 
N/A
 
6

 

 
6

Customer relationships
 
168

 
(167
)
 
1

 
1.25 years
 
168

 
(166
)
 
2

Trademark and trade name
 
37

 
(36
)
 
1

 
1.25 years
 
37

 
(36
)
 
1

Total
 
$
469

 
$
(404
)
 
$
65

 
4.56 years
 
$
469

 
$
(391
)
 
$
78


The following table summarizes amortization expense associated with acquisition-related intangible assets:
 
 
2014
 
2013
 
2012
 
 
(In millions)
Developed technology
 
$
13

 
$
13

 
$
9

Customer relationships
 
1

 
1

 
1

Trademark and trade name
 

 
4

 
4

Total
 
$
14

 
$
18

 
$
14


As of December 27, 2014, the Company's future amortization expenses related to acquisition-related intangible assets were as follows:
Year
(In millions)
2015
$
13

2016
11

2017
11

2018
11

2019
11

2020 and thereafter
2

Total intangible assets subject to amortization
59

In-process research and development
6

Total intangible assets, net
$
65

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Financial Instruments (Notes)
12 Months Ended
Dec. 27, 2014
Investments, Debt and Equity Securities [Abstract]
Financial Instruments Disclosure [Text Block]
Financial Instruments
Cash, Cash Equivalents and Marketable Securities
Cash and financial instruments measured and recorded at fair value on a recurring basis as of December 27, 2014 and December 28, 2013 are summarized below:
 
  
Total Fair
Value
 
Cash and
Cash
Equivalents
 
Short-Term
Marketable
Securities
 
Long-Term
Marketable
Securities
 
(In millions)
December 27, 2014
 
 
 
 
 
 
 
 
Cash
 
$
391

 
$
391

 
$

 
$

Level 1(1) (2)
  
 
 
 
 
 
 
 
Money market funds
 
4

 
4

 

 

Total level 1
  
4

 
4

 

 

Level 2(2) (3)
 
 
 
 
 
 
 
 
Commercial paper
  
618

 
410

 
208

 

Corporate bonds
  
27

 

 
27

 

Total level 2
  
645

 
410

 
235

 

Total
  
$
1,040

 
$
805

 
$
235

 
$

 
  
Total Fair
Value
 
Cash and
Cash
Equivalents
 
Short-Term
Marketable
Securities
 
Long-Term
Marketable
Securities
 
(In millions)
December 28, 2013
 
 
 
 
 
 
 
 
Cash
 
$
429

 
$
429

 
$

 
$

Level 1(1) (2)
  
 
 
 
 
 
 
 
Money market funds
 
21

 
19

 

 
2

Total level 1
  
21

 
19

 

 
2

Level 2(2) (3)
 
 
 
 
 
 
 
 
Commercial paper
  
599

 
421

 
178

 

Time deposits
  
50

 

 
50

 

Corporate bonds
  
88

 

 

 
88

Total level 2
  
737

 
421

 
228

 
88

Total
  
$
1,187

 
$
869

 
$
228

 
$
90


(1)
The Company’s Level 1 assets are valued using quoted prices for identical instruments in active markets.
(2)
The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during 2014 and 2013.
(3)
The Company’s Level 2 short-term investments are valued using broker reports that utilize quoted market prices for identical or comparable instruments. Brokers gather observable inputs for all of the Company’s fixed income securities from a variety of industry data providers and other third-party sources. The Company’s Level 2 long-term investments were valued using broker reports that utilize a third-party professional pricing service that gathers information from multiple market sources and integrates relevant credit information, observed market movements and sector news into their pricing evaluation. The Company validated, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of the Level 2 long-term investments against the fair values of the portfolio balances of another third-party professional’s pricing service, other than that utilized by the brokers, that use a similar technique as the brokers to derive pricing as described above.
Available-for-sale securities held by the Company as of December 27, 2014 and December 28, 2013 consisted of money market funds, commercial paper, time deposits, corporate bonds and mutual funds. The amortized cost of available-for-sale securities approximates the fair value for all periods presented.
In addition to those amounts presented above, at December 27, 2014 and December 28, 2013, the Company had approximately $10 million and $18 million of available-for-sale investments in money market funds, used as collateral for leased buildings and letters of credit deposits, which were included in Other Assets on the Company’s consolidated balance sheets. These money market funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized costs are the same as the fair value for all periods presented. The Company is restricted from accessing these deposits.
Also in addition to those amounts presented above, at December 27, 2014 and December 28, 2013, the Company had approximately $16 million and $14 million of available-for-sale investments in mutual funds held in a Rabbi trust established for the Company's deferred compensation plan, which were included in Other Assets on the Company's consolidated balance sheets. These mutual funds are classified within Level 1 because they are valued using quoted prices for identical instruments in active markets. Their amortized cost approximates the fair value for all periods presented. The Company is restricted from accessing these investments.
There were no sales of available-for-sale securities during 2014. During 2013 the Company realized a loss of $2 million on sales of available-for-sale securities of $28 million. The cost of securities sold is determined based on the specific identification method.
During 2014, the Company reclassified $45 million of its marketable securities that were previously classified as long-term to short-term as those were intended to be used for operations in the next twelve months.
At December 27, 2014, the Company had no investments that were classified as long-term marketable securities. At December 28, 2013, $90 million of investments were classified as long-term marketable securities.
All contractual maturities of the Company’s available-for-sale marketable debt securities as of December 27, 2014 were within one year. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis. The Company carries its financial instruments at fair value with the exception of its debt. Financial instruments that are not recorded at fair value are measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values of financial instruments not recorded at fair value are as follows:
 
December 27, 2014
 
December 28, 2013
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
 
(In millions)
Short-term debt (excluding capital leases)
$
172

 
$
173

 
$
55

 
$
55

Long-term debt (excluding capital leases)
$
2,025

 
$
1,858

 
$
1,986

 
$
2,132

The Company’s short-term and long-term debt are classified within Level 2. The fair value of the debt was estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing payment terms.
Hedging Transactions and Derivative Financial Instruments
Cash Flow Hedges
The following table shows the amount of gain (loss) included in accumulated other comprehensive income (loss), the amount of gain (loss) reclassified from accumulated other comprehensive income (loss) and included in earnings related to the foreign currency forward contracts designated as cash flow hedges and the amount of gain (loss) included in other income (expense), net, related to contracts not designated as hedging instruments, which was allocated in the consolidated statements of operations:
 
2014
 
2013
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
Contracts designated as cash flow hedging instruments
 
 
 
Other comprehensive income (loss)
$
(3
)
 
$
(3
)
Research and development
(3
)
 
(2
)
Marketing, general and administrative
(3
)
 
(1
)
Contracts not designated as hedging instruments
 
 
 
Other income (expense), net
$
(3
)
 
$
(2
)
The Company’s foreign currency derivative contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.
The following table shows the fair value amounts included in prepaid expenses and other current assets should the foreign currency forward contracts be in a gain position or included in accrued and other current liabilities should these contracts be in a loss position. These amounts were recorded in the Company's consolidated balance sheets as follows:
 
 
December 27,
2014
 
December 28,
2013
 
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
 
Contracts designated as cash flow hedging instruments
 
$
(6
)
 
$
(3
)
Contracts not designated as hedging instruments
 
$
(1
)
 
$
(1
)
For the foreign currency contracts designated as cash flow hedges, the ineffective portions of the hedging relationship and the amounts excluded from the assessment of hedge effectiveness were immaterial.
As of December 27, 2014 and December 28, 2013, the notional values of the Company’s outstanding foreign currency forward contracts were $298 million and $124 million, respectively. All the contracts mature within 12 months, and, upon maturity, the amounts recorded in accumulated other comprehensive income (loss) are expected to be reclassified into earnings. The Company hedges its exposure to the variability in future cash flows for forecasted transactions over a maximum of 12 months. As of December 27, 2014, the Company’s outstanding contracts were in a net loss position of $7 million.
Fair Value Hedges
In the third quarter of 2014, the Company entered into fixed-to-floating interest rate swaps on a notional amount of $250 million to hedge a portion of the Company’s 6.75% Senior Notes due 2019 (6.75% Notes). The purpose of these swaps is to manage a portion of the Company's exposure to interest rate risk by converting fixed rate interest payments to floating rate interest payments. The swaps effectively converted a portion of the fixed interest payments payable on the 6.75% Notes into variable interest payments based on LIBOR. The interest rate swaps are designated as a fair value hedge. Because the specific terms and notional amount of the swaps are intended to match the portion of the 6.75% Notes being hedged, it is assumed to be a highly effective hedge. Accordingly, changes in the fair value of the interest rate swaps are exactly offset by changes in the fair value of the 6.75% Notes. All changes in fair value of the swaps are recorded on the Company’s consolidated balance sheets with no net impact to the Company's consolidated statements of operations.
The Company’s fair value hedge derivative contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets.

The following table shows the fair value amounts included in long-term other assets should the fair value hedge derivative contracts be in a gain position or included in other long-term liabilities should these contracts be in a loss position. These amounts were recorded in the Company’s consolidated balance sheets as follows:
 
 
December 27,
2014
 
December 28,
2013
 
 
(In millions)
Interest Rate Swap Contracts
 
 
 
 
Contracts designated as fair value hedging instruments
 
$
3

 
$

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Concentrations of Credit and Operation Risk
12 Months Ended
Dec. 27, 2014
Risks and Uncertainties [Abstract]
Concentrations of Credit and Operation Risk
Concentrations of Credit and Operation Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of investments in debt securities, trade receivables and derivative financial instruments used in hedging activities.
The Company places its investments with high credit quality financial institutions and, by policy, limits the amount of credit exposure with any one financial institution. The Company invests in time deposits and certificates of deposit from banks having combined capital, surplus and undistributed profits of not less than $200 million. At the time an investment is made, investments in commercial paper of industrial firms and financial institutions are rated A1, P1 or better. The Company invests in tax-exempt securities, including municipal notes and bonds, corporate bonds that are rated A, A2 or better and repurchase agreements, each of which have securities of the type and quality listed above as collateral.
The Company believes that concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up the Company’s customer base, thus diluting the trade credit risk. Accounts receivable from the Company’s top three customers accounted for approximately 28%, 17% and 15% of the total consolidated accounts receivable balance as of December 27, 2014 and 21%, 18% and 17% of the total consolidated accounts receivable balance as of December 28, 2013. However, the Company does not believe the receivable balance from these customers represents a significant credit risk based on past collection experience, and review of their current credit quality. The Company manages its exposure to customer credit risk through credit limits, credit lines, ongoing monitoring procedures and credit approvals. Furthermore, the Company performs in-depth credit evaluations of all new customers and, at intervals, for existing customers. From this, the Company may require letters of credit, bank or corporate guarantees or advance payments, if deemed necessary.
The Company’s existing derivative financial instruments are with four large international financial institutions of investment grade credit rating. The Company does not believe that there is significant risk of nonperformance by these counterparties because the Company monitors their credit rating on an ongoing basis. By using derivative instruments, the Company is subject to credit and market risk. If a counterparty fails to fulfill its performance obligations under a derivative contract, the Company’s credit risk will equal the fair value of the derivative instrument. Generally, when the fair value of a derivative contract is positive, the counterparty owes the Company, thus creating a receivable risk for the Company. Based upon certain factors, including a review of the credit default swap rates for the Company’s counterparties, the Company determined its counterparty credit risk to be immaterial. At December 27, 2014, the Company's obligations under the contracts exceeded the counterparties’ obligations by $7 million.
The Company is dependent on certain equipment and materials from a limited number of suppliers and relies on a limited number of foreign companies to supply the majority of certain types of integrated circuit packages for its internal back-end manufacturing operations. Similarly, certain non-proprietary materials or components such as memory, PCBs, substrates and capacitors used in the manufacture of the Company’s graphics products are currently available from only a limited number of sources. Interruption of supply or increased demand in the industry could cause shortages and price increases in various essential materials. If the Company or its third-party manufacturing suppliers are unable to procure certain of these materials, or its foundries are unable to procure materials for manufacturing its products, its business would be materially adversely affected.
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Income Taxes
12 Months Ended
Dec. 27, 2014
Income Tax Disclosure [Abstract]
Income Taxes
Income Taxes
The provision (benefit) for income taxes consists of:
 
2014
 
2013
 
2012
 
(In millions)
Current:
 
 
 
 
 
U.S. Federal
$
(1
)
 
$
(2
)
 
$

U.S. State and Local

 

 

Foreign National and Local
6

 
10

 
6

Total
5

 
8

 
6

Deferred:
 
 
 
 
 
U.S. Federal

 
3

 
(37
)
Foreign National and Local

 
(2
)
 
(3
)
Total

 
1

 
(40
)
Provision (benefit) for income taxes
$
5

 
$
9

 
$
(34
)

Loss before income taxes consists of the following:
 
2014
 
2013
 
2012
 
(In millions)
U.S.
$
(621
)
 
$
(397
)
 
$
(1,242
)
Foreign
223

 
323

 
25

Total pre-tax loss
$
(398
)
 
$
(74
)
 
$
(1,217
)

Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 27, 2014 and December 28, 2013 are as follows:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Deferred tax assets:
 
 
 
Net operating loss carryovers
$
1,978

 
$
1,701

Deferred distributor income
28

 
49

Inventory valuation
22

 
32

Accrued expenses not currently deductible
107

 
113

Acquired intangibles
248

 
343

Tax deductible goodwill
295

 
271

Federal and state tax credit carryovers
391

 
321

Foreign capitalized research and development costs
41

 
22

Foreign research and development ITC credits
282

 
305

Discount of convertible notes
11

 
65

Other
167

 
217

Total deferred tax assets
3,570

 
3,439

Less: valuation allowance
(3,495
)
 
(3,375
)
Total deferred tax assets, net of valuation allowance
75

 
64

Deferred tax liabilities:
 
 
 
Acquired intangibles
(37
)
 
(28
)
Other
(19
)
 
(17
)
Total deferred tax liabilities
(56
)
 
(45
)
Net deferred tax assets
$
19

 
$
19



The breakdown between current and non-current deferred tax assets and deferred tax liabilities as of December 27, 2014 and December 28, 2013 is as follows:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Current deferred tax assets
$
2

 
$
2

Non-current deferred tax assets
33

 
18

Current deferred tax liabilities
(16
)
 
(1
)
Net deferred tax assets
$
19

 
$
19


Current deferred tax assets and current deferred tax liabilities are included in captions “Prepaid expenses and other current assets” and “Accrued and other current liabilities,” respectively, on the consolidated balance sheets. Non-current deferred tax assets are included in the caption “Other assets” on the consolidated balance sheets.
As of December 27, 2014, substantially all of the Company’s U.S. and foreign deferred tax assets, net of deferred tax liabilities, continued to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, at December 27, 2014, in management’s estimate, is not more likely than not to be achieved. In 2014, the net valuation allowance increased by $120 million primarily for increases in deferred tax assets related to the net operating losses generated from pre-tax book losses in the United States. In 2013, the net valuation allowance decreased by $26 million primarily for decreases in deferred tax assets related to the utilization of net operating losses due to pre-tax book income in Canada. In 2012, the net valuation allowance increased by $423 million primarily for increases in deferred tax assets related to the net operating losses generated from pre-tax book losses net of the benefit relating to the SeaMicro acquisition. Purchase accounting for the SeaMicro acquisition required the establishment of a deferred tax liability related to the book tax basis differences of identifiable intangible assets that increased goodwill. The deferred tax liability created an additional source of U.S. future taxable income which resulted in a release of a portion of the Company's U.S. valuation allowance.
As of December 27, 2014 and December 28, 2013, the Company had $127 million and $191 million, respectively, of deferred tax assets subject to a valuation allowance that related to excess stock option deductions, which are not presented in the deferred tax asset balances. As of December 27, 2014 and December 28, 2013, $10 million of deferred tax assets subject to valuation allowance related to a deductible discount for tax only associated with the Company’s 6.00% Convertible Senior Notes due 2015 (the 6.00% Notes). The tax benefit from these deductions will increase capital in excess of par when realized, if at all.
The following is a summary of the various tax attribute carryforwards the Company had as of December 27, 2014. The amounts presented below include amounts related to excess stock option deductions, as discussed above.
Carryforward
Federal
 
State /
Provincial
 
Expiration
 
(In millions)
 
 
U.S.-net operating loss carryovers
$
5,432

 
$
231

 
2015 to 2034
U.S.-credit carryovers
$
403

 
$
193

 
2018 to 2034
Canada-net operating loss carryovers
$
217

 
$
217

 
2025 to 2028
Canada-credit carryovers
$
357

 
$
31

 
2021 to 2034
Canada-R&D pools
$
154

 
$
154

 
no expiration
Barbados-net operating loss carryovers
$
198

 
N/A

 
2015 to 2017
Other foreign net operating loss carryovers
$
5

 
N/A

 
various

Utilization of $17 million of the Company’s U.S. federal net operating loss carryforwards are subject to annual limitations as a result of the ATI Technologies ULC (ATI) acquisition.

The table below displays reconciliation between statutory federal income taxes and the total provision (benefit) for income taxes.
 
2014
 
2013
 
2012
 
(In millions)
Statutory federal income tax benefit at 35% rate
$
(139
)
 
$
(26
)
 
$
(426
)
State taxes, net of federal benefit
1

 
1

 
1

Foreign (income) expense at other than U.S. rates
1

 
15

 
(13
)
U.S. valuation allowance generated
144

 
22

 
406

Credit monetization
(2
)
 
(3
)
 
(2
)
Provision (benefit) for income taxes
$
5

 
$
9

 
$
(34
)

The Company has made no provision for U.S. income taxes on approximately $349 million of cumulative undistributed earnings of certain foreign subsidiaries through December 27, 2014 because it is the Company’s intention to indefinitely reinvest such earnings. If such earnings were distributed, the Company would incur additional income taxes of approximately $122 million (after an adjustment for foreign tax credits). These additional income taxes may not result in income tax expense or a cash payment to the Internal Revenue Service, but may result in the utilization of deferred tax assets that are currently subject to a valuation allowance.
The Company's operations in Malaysia currently operate under a tax holiday, which will expire in 2018. This tax holiday may be extended if specific conditions are met. The net impact of the tax holiday was to decrease the Company's net loss by $2 million in 2014, less than $.01 per share, diluted. The net impact of tax holidays decreased the Company's net loss by $1 million in 2013, less than $.01 per share, diluted, and decreased the Company's net loss by $11 million in 2012, less than $.02 per share, diluted.
A reconciliation of the gross unrecognized tax benefits is as follows:
 
2014
 
2013
 
2012
 
(In millions)
Balance at beginning of year
$
52

 
$
56

 
$
69

Increases for tax positions taken in prior years
1

 
1

 
3

Decreases for tax positions taken in prior years

 
(2
)
 
(4
)
Increases for tax positions taken in the current year
2

 
4

 
3

Decreases for settlements with taxing authorities
(27
)
 
(7
)
 
(15
)
Balance at end of year
$
28

 
$
52

 
$
56



The amount of unrecognized tax benefits that would impact the effective tax rate was $3 million, $3 million and $2 million as of December 27, 2014, December 28, 2013 and December 29, 2012, respectively. The Company had no or immaterial amounts of accrued interest and no accrued penalties related to unrecognized tax benefits as of December 27, 2014, December 28, 2013 and December 29, 2012. The Company recognizes the accrued interest and penalties to unrecognized tax benefits as interest expense and income tax expense, respectively.
During the 12 months beginning December 28, 2014, the Company expects to reduce its unrecognized tax benefits by $7 million primarily as a result of the settlement of tax audits with certain foreign tax authorities. The Company does not believe it is reasonably possible that other unrecognized tax benefits will materially change in the next 12 months. However, the resolutions and/or closure of open audits are highly uncertain.
As of December 27, 2014, the Canada Revenue Agency, or CRA, had completed its audit of ATI for the years 2005 through 2007 and issued its final Notice of Assessment, which the Company has reviewed and agreed to. The CRA is currently auditing international transactions for the years 2008 through 2010. As of December 27, 2014, the Italian tax authorities are currently conducting their audit of the Company’s subsidiaries’ activities in Italy for the years 2003 through 2013. The Company is in the process of providing documentation in response to the inquiries. The Company and its subsidiaries have several foreign, foreign provincial, and U.S. state audits in process at any one point in time. The Company has provided for uncertain tax positions that require a liability under the adopted method to account for uncertainty in income taxes. The Company has not recognized any current or long-term deferred tax assets under a valuation allowance as a result of the application of uncertainty in income taxes in ASC 740 for unrecognized tax benefits as of December 27, 2014.
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Debt and Other Obligations
12 Months Ended
Dec. 27, 2014
Debt Disclosure [Abstract]
Debt and Other Obligations
Debt and Other Obligations
Total Debt
The Company’s total debt as of December 27, 2014 and December 28, 2013 consisted of:

 
December 27,
2014
 
December 28,
2013
 
(In millions)
6.00% Notes, net of discount
$
42

 
$
517

8.125% Notes, net of discount

 
470

6.75% Notes
600

 

6.75% Notes, interest rate swap
3

 

7.75% Notes
450

 
500

7.50% Notes
475

 
500

7.00% Notes
500

 

Secured Revolving Line of Credit
130

 
55

Capital lease obligations
12

 
16

Total debt
2,212

 
2,058

Less: current portion
177

 
60

Total debt, less current portion
$
2,035

 
$
1,998


6.00% Convertible Senior Notes due 2015
On April 27, 2007, the Company issued $2.2 billion aggregate principal amount of the 6.00% Convertible Senior Notes (6.00% Notes). The 6.00% Notes are general unsecured senior obligations. Interest is payable on May 1 and November 1 of each year beginning November 1, 2007 until the maturity date of May 1, 2015. The terms of the 6.00% Notes are governed by an Indenture (the 6.00% Indenture), dated April 27, 2007, between the Company and Wells Fargo Bank, N.A., as trustee.
In 2014, the Company repurchased $64 million in aggregate principal amount of its 6.00% Notes in open market transactions for $69 million, which included payment of accrued and unpaid interest of $1 million. Also, during 2014, the Company repurchased a portion of the 6.00% Notes through a partial tender offer. The Company repurchased $423 million aggregate principal amount of the 6.00% Notes for $460 million in cash, which included payment of accrued and unpaid interest of $10 million. The Company incurred a total loss of $10 million in connection with the foregoing repurchases of the 6.00% Notes.
In 2013, the Company repurchased $50 million in aggregate principal amount of its 6.00% Notes in open market transactions for $53 million. For the repurchase of the 6.00% Notes during 2013, the Company allocated $3 million of the $53 million aggregate cash payment to the equity component and reduced the principal amount of the debt by $50 million. Prior to 2013, the Company repurchased $1.6 billion in principal amount of the 6.00% Notes for $1.4 billion.
As of December 27, 2014, the outstanding aggregate principal amount and remaining carrying value of the 6.00% Notes were $42 million. The remaining $42 million of aggregate principal amount of 6.00% Notes has been reclassified as short-term debt on the consolidated balance sheet as of December 27, 2014.
The proceeds from the issuance of the 6.00% Notes were allocated between a liability (issued at a discount) and equity in a manner that reflects interest expense at the market interest rate for similar nonconvertible debt as of the original issuance date of the 6.00% Notes. The debt discount is being accrued from issuance through April 2015, the period the 6.00% Notes are expected to be outstanding, with the accretion recorded as additional non-cash interest expense. The equity component is included in the paid-in-capital portion of stockholders’ equity on the Company’s consolidated balance sheet. The initial value of the equity component ($259 million), which reflects the equity conversion feature of the 6.00% Notes, is equal to the initial debt discount.
Information related to equity and debt components:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Carrying amount of the equity component
$
125

 
$
159

Principal amount of the 6.00% Notes
42

 
530

Unamortized discount

 
(13
)
Net carrying amount
$
42

 
$
517



Information related to interest rates and expense:
 
2014
 
2013
 
2012
 
(In millions, except percentages)
Effective interest rate
8
%
 
8
%
 
8
%
Interest cost related to contractual interest coupon
$
9

 
$
45

 
$
44

Interest cost related to amortization of the discount
$
3

 
$
10

 
$
9


Upon the occurrence of certain events described in the 6.00% Indenture, the 6.00% Notes will be convertible into cash up to the principal amount, and if applicable, into shares of the Company’s common stock issuable upon conversion of the 6.00% Notes in respect of any conversion value above the principal amount, based on an initial conversion rate of 35.6125 shares of common stock per $1,000 principal amount of the 6.00% Notes, which is equivalent to an initial conversion price of $28.08 per share. This initial conversion price represents a premium of 100% relative to the last reported sale price of the Company’s common stock on April 23, 2007 (the trading date preceding the date of pricing of the 6.00% Notes) of $14.04 per share. The conversion rate will be adjusted for certain anti-dilution events. In addition, the conversion rate will be increased in the case of corporate events that constitute a fundamental change (as defined in the 6.00% Indenture) under certain circumstances. Holders of the 6.00% Notes may require the Company to repurchase the 6.00% Notes for cash equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the occurrence of a fundamental change or a termination of trading (as defined in the 6.00% Indenture). Additionally, an event of default (as defined in the 6.00% Indenture) may result in the acceleration of the maturity of the 6.00% Notes.
8.125% Senior Notes Due 2017
On November 30, 2009, the Company issued $500 million of the 8.125% Senior Notes Due 2017 (8.125% Notes) at a discount of 10.204%.
During 2014, the Company repurchased and redeemed the entire $500 million in aggregate principal amount of its 8.125% Notes for $531 million, which included payment of accrued and unpaid interest of $8 million. The Company incurred a total loss of $54 million in connection with the foregoing repurchase and redemption of the 8.125% Notes. As of December 27, 2014, the Company did not have any 8.125% Notes outstanding.
6.75% Senior Notes Due 2019
On February 26, 2014, the Company issued $600 million of its 6.75% Notes. The 6.75% Notes are general unsecured senior obligations of the Company. Interest is payable on March 1 and September 1 of each year beginning September 1, 2014 until the maturity date of March 1, 2019. The 6.75% Notes are governed by the terms of an indenture (the 6.75% Indenture) dated February 26, 2014 between the Company and Wells Fargo Bank, N.A., as trustee.
As of December 27, 2014, the outstanding aggregate principal amount of the 6.75% Notes was $600 million.
At any time before March 1, 2019, the Company may redeem some or all of the 6.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as set forth in the 6.75% Indenture).
Holders have the right to require the Company to repurchase all or a portion of the 6.75% Notes in the event that the Company undergoes a change of control, as defined in the 6.75% Indenture, at a price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 6.75% Indenture) may result in the acceleration of the maturity of the 6.75% Notes.
The 6.75% Indenture contains certain covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries, to:
incur additional indebtedness, except specified permitted debt;
pay dividends and make other restricted payments;
make certain investments if an event of a default exists, or if specified financial conditions are not satisfied;
create or permit certain liens;
create or permit restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;
use the proceeds from sales of assets;
enter into certain types of transactions with affiliates; and
consolidate, merge or sell its assets as entirety or substantially as an entirety. 
7.75% Senior Notes Due 2020
On August 4, 2010, the Company issued $500 million of its 7.75% Senior Notes Due 2020 (7.75% Notes). The 7.75% Notes are general unsecured senior obligations of the Company. Interest is payable on February 1 and August 1 of each year beginning February 1, 2011 until the maturity date of August 1, 2020. The 7.75% Notes are governed by the terms of an indenture (the 7.75% Indenture) dated August 4, 2010 between the Company and Wells Fargo Bank, N.A., as trustee.
During 2014, the Company repurchased $50 million in aggregate principal amount of its 7.75% Notes in open market transactions for $49 million, which included payment of accrued and unpaid interest of $1 million. The Company recorded a total gain of $2 million in connection with the foregoing repurchase of the 7.75% Notes. As of December 27, 2014, the outstanding aggregate principal amount of the 7.75% Notes was $450 million.
Prior to August 1, 2015, the Company may redeem some or all of the 7.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as defined in the 7.75% Indenture). From August 1, 2015, the Company may redeem the 7.75% Notes at specified redemption prices, plus accrued and unpaid interest.
Period
Price as
Percentage of
Principal Amount
Beginning on August 1, 2015 through July 31, 2016
103.875
%
Beginning on August 1, 2016 through July 31, 2017
102.583
%
Beginning on August 1, 2017 through July 31, 2018
101.292
%
On August 1, 2018 and thereafter
100.000
%

Holders have the right to require the Company to repurchase all or a portion of the 7.75% Notes in the event that the Company undergoes a change of control, as defined in the 7.75% Indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 7.75% Indenture) may result in the acceleration of the maturity of the 7.75% Notes.
The 7.75% Indenture contains certain covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries, from:
incurring additional indebtedness, except specified permitted debt;
paying dividends and making other restricted payments;
making certain investments if an event of a default exists, or if specified financial conditions are not satisfied;
creating or permitting certain liens;
creating or permitting restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;
using the proceeds from sales of assets;
entering into certain types of transactions with affiliates; and
consolidating, merging or selling its assets as an entirety or substantially as an entirety.
7.50% Senior Notes Due 2022
On August 15, 2012, the Company issued $500 million of its 7.50% Senior Notes due 2022 (7.50% Notes). The 7.50% Notes are general unsecured senior obligations of the Company. Interest is payable on February 15 and August 15 of each year beginning February 15, 2013 until the maturity date of August 15, 2022. The 7.50% Notes are governed by the terms of an indenture (the 7.50% Indenture) dated August 15, 2012 between the Company and Wells Fargo Bank, N.A., as trustee.
During 2014, the Company repurchased $25 million in aggregate principal amount of its 7.50% Notes in open market transactions for $24 million. The payment of accrued and unpaid interest included in the purchase price was immaterial. The Company incurred a total gain of $1 million in connection with the foregoing repurchase of the 7.50% Notes. As of December 27, 2014, the outstanding aggregate principal amount of the 7.50% Notes was $475 million.
At any time (which may be more than once) before August 15, 2015, the Company can redeem up to 35% of the aggregate principal amount of the 7.50% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price not greater than 107.5% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to August 15, 2022, the Company may redeem some or all of the 7.50% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as defined in the 7.50% Indenture).
Holders have the right to require the Company to repurchase all or a portion of the 7.50% Notes in the event that the Company undergoes a change of control, as defined in the 7.50% Indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 7.50% Indenture) may result in the acceleration of the maturity of the 7.50% Notes.
 
The 7.50% Indenture contains certain covenants that limit, among other things, the Company's ability and the ability of its subsidiaries, to:

incur additional indebtedness, except specified permitted debt;
pay dividends and make other restricted payments;
make certain investments if an event of a default exists, or if specified financial conditions are not satisfied;
create or permit certain liens;
create or permit restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;
use the proceeds from sales of assets;
enter into certain types of transactions with affiliates; and
consolidate, merge or sell its assets as entirety or substantially as an entirety.
    
7.00% Senior Notes Due 2024
On June 16, 2014, the Company issued $500 million of its 7.00% Senior Notes due 2024 (7.00% Notes). The 7.00% Notes are general unsecured senior obligations of the Company. Interest is payable on January 1 and July 1 of each year beginning January 1, 2015 until the maturity date of July 1, 2024. The 7.00% Notes are governed by the terms of an indenture (the 7.00% Indenture) dated June 16, 2014 between the Company and Wells Fargo Bank, N.A., as trustee.
As of December 27, 2014, the outstanding aggregate principal amount of the 7.00% Notes was $500 million.
At any time before July 1, 2017, the Company may redeem up to 35% of the aggregate principal amount of the 7.00% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price equal to 107.000% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to July 1, 2019, the Company may redeem some or all of the 7.00% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as set forth in the 7.00% Indenture).
Starting July 1, 2019, the Company may redeem the 7.00% Notes for cash at the following specified prices plus accrued and unpaid interest: 
Period
Price as
Percentage of
Principal Amount
Beginning on July 1, 2019 through June 30, 2020
103.500
%
Beginning on July 1, 2020 through June 30, 2021
102.333
%
Beginning on July 1, 2021 through June 30, 2022
101.167
%
On July 1, 2022 and thereafter
100.000
%

Holders have the right to require the Company to repurchase all or a portion of the 7.00% Notes in the event that the Company undergoes a change of control, as defined in the 7.00% Indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default (as defined in the 7.00% Indenture) may result in the acceleration of the maturity of the 7.00% Notes.
The 7.00% Indenture contains certain covenants that limit, among other things, the Company’s ability and the ability of its subsidiaries, to:
incur additional indebtedness, except specified permitted debt;
pay dividends and make other restricted payments;
make certain investments if an event of a default exists, or if specified financial conditions are not satisfied;
create or permit certain liens;
create or permit restrictions on the ability of its subsidiaries to pay dividends or make other distributions to the Company;
use the proceeds from sales of assets;
enter into certain types of transactions with affiliates; and
consolidate, merge or sell its assets as entirety or substantially as an entirety.
 

The 6.00% Notes, 6.75% Notes, 7.75% Notes, 7.50% Notes and 7.00% Notes rank equally with the Company’s existing and future senior debt and are senior to all of the Company’s future subordinated debt. The 6.00% Notes, 6.75% Notes, 7.75% Notes, 7.50% Notes and 7.00% Notes rank junior to all of the Company’s future senior secured debt to the extent of the collateral securing such debt and are structurally subordinated to all existing and future debt and liabilities of the Company’s subsidiaries.
Potential Repurchase of Outstanding Notes
The Company may elect to purchase or otherwise retire the 6.00% Notes, 6.75% Notes, 7.75% Notes, 7.50% Notes and 7.00% Notes with cash, stock or other assets from time to time in open market or privately negotiated transactions, either directly or through intermediaries, or by tender offer when the Company believes the market conditions are favorable to do so.
Secured Revolving Line of Credit
On November 12, 2013, the Company and its subsidiary, AMD International Sales & Service, Ltd. (together, the Borrowers), entered into a loan and security agreement (the Loan Agreement) for a senior secured asset based line of credit for a principal amount up to $500 million (the Secured Revolving Line of Credit) with up to $75 million available for issuance of letters of credit, with a group of lenders and Bank of America, N.A., acting as agent for the lenders (the “Agent”). The Secured Revolving Line of Credit matures on November 12, 2018. Borrowings under the Secured Revolving Line of Credit are limited to up to 85% of eligible account receivable minus certain reserves. The borrowings of the Secured Revolving Line of Credit may be used for general corporate purposes, including working capital needs.

The Borrowers can elect that the borrowings under the Secured Revolving Line of Credit may bear interest at a rate per annum equal to (a) London Interbank Offered Rate (LIBOR) plus an applicable margin ranging from 2.00% to 2.75%, or (b) (i) the greater of (x) the Agent’s prime rate, (y) the federal funds rate as published by the Federal Reserve Bank of New York plus 0.50%, and (z) LIBOR for a one-month period plus 1.00%, plus (ii) an applicable margin ranging from 1.00% to 1.75%. The applicable margin to be applied to the borrowings under the Company’s Secured Revolving Line of Credit is dependent on the Borrowers achieving a certain fixed charge coverage ratio. The Secured Revolving Line of Credit may be optionally prepaid or terminated or unutilized commitments may be reduced, in each case at any time without premium or penalty. In connection with the Secured Revolving Line of Credit, the Borrowers are required to pay an unused line fee equal to 0.50% per annum, payable monthly on the unused amount of the commitments under the Secured Revolving Line of Credit. The unused line fee decreases to 0.375% per annum when more than 50% of the Secured Revolving Line of Credit is utilized. The Borrowers will pay (i) a monthly fee on all letters of credit outstanding under the Secured Revolving Line of Credit equal to the applicable LIBOR margin and (ii) a fronting fee to the Agent equal to 0.125% of all such letters of credit, payable monthly in arrears.
The obligations under the Loan Agreement are secured by a first priority basis in the Borrowers’ account receivable, inventory and certain deposit accounts and specified related assets.
The Loan Agreement contains covenants that place certain restrictions on the Borrowers’ ability to, among other things, amend or modify certain terms of any debt of $50 million or more or subordinated debt, create or suffer to exist any liens upon accounts or inventory, sell or transfer any of Borrowers’ accounts or inventory other than certain ordinary-course transfers, make certain changes to either Borrower’s name or form or state of organization without notifying the Agent, or liquidate, dissolve, merge, combine or consolidate. Further restrictions apply during a domestic cash trigger period (a Domestic Cash Trigger Period), which occurs (i) upon an event of default or (ii) when the amount of domestic cash or cash equivalents held in certain accounts is at any time less than $250 million, as amended in 2014, and ends when both (a) no event of default has existed for 45 days and (b) the amount of domestic cash or cash equivalents held in such accounts has been equal to or greater than $250 million, as amended during 2014, for 45 days. Such restrictions limit the Borrowers’ ability to, among other things, allow certain subsidiaries that manufacture or process inventory for the Borrowers to borrow secured debt or unsecured debt beyond a certain amount, create any liens upon any of the Borrowers’ property (other than customary permitted liens and liens on up to $1.5 billion of secured credit facilities debt (which amount includes the Secured Revolving Line of Credit)), declare or make any distributions, create any encumbrance on the ability of a subsidiary to make any upstream payments, make asset dispositions other than certain ordinary course dispositions, make certain loans, make payments with respect to subordinated debt or certain borrowed money prior to its due date, become a party to certain agreements restricting the Borrowers’ ability to incur or repay debt, grant liens, make distributions, or modify loan agreements or enter into any non-arm’s-length transaction with an affiliate.
During a Domestic Cash Trigger Period, the Borrowers are subject to financial covenants requirement and are required to maintain a fixed charge coverage ratio of 1:1 for each trailing four-fiscal quarter period ending on and after March 29, 2014.
At December 27, 2014, the Secured Revolving Line of Credit had an outstanding loan balance of $130 million, with an interest rate of 4.25%, as amended during 2014, $6 million related to outstanding Letters of Credit, and up to $364 million available for future borrowings. As of December 27, 2014, the Company was in compliance with all required covenants stated in the Loan Agreement.
The agreements governing the 6.00% Notes, 6.75% Notes, 7.75% Notes, 7.50% Notes, 7.00% Notes and the Secured Revolving Line of Credit contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the Secured Revolving Line of Credit to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable.
Capital Lease Obligations
As of December 27, 2014, the Company had aggregate outstanding capital lease obligations of $12 million for one of its facilities in Canada, which is payable in monthly installments through 2017.
The gross amount of assets recorded under capital leases totaled approximately $23 million as of December 27, 2014 and December 28, 2013, and is included in the related property, plant and equipment category. Amortization of assets recorded under capital leases is included in depreciation expense. Accumulated amortization of these leased assets was approximately $18 million and $16 million as of December 27, 2014 and December 28, 2013, respectively.
Future Payments on Total Debt
As of December 27, 2014, the Company’s future debt and capital lease payment obligations were as follows:
 
Long Term
Debt
(Principal
only)
 
Short Term Debt (Principal only)
 
Capital
Leases
 
(In millions)
2015
$

 
$
172

 
$
5

2016

 

 
6

2017

 

 
1

2018

 

 

2019
600

 

 

2020 and thereafter
1,425

 

 

Total
2,025

 
172

 
12

Less: imputed interest

 

 

Total
$
2,025

 
$
172

 
$
12

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Other Income (Expense), Net
12 Months Ended
Dec. 27, 2014
Income Statement Related Disclosures [Abstract]
Other Income (Expense), Net
Other Income (Expense), Net
The following table summarizes the components of other income (expense), net:
 
2014
 
2013
 
2012
 
(In millions)
Impairment charge on marketable securities
$

 
$

 
$
(4
)
Net loss on debt redemptions
(61
)
 
(1
)
 

Other
(8
)
 
(4
)
 
10

Other income (expense), net
$
(69
)
 
$
(5
)
 
$
6

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Segment Reporting
12 Months Ended
Dec. 27, 2014
Segment Reporting [Abstract]
Segment Reporting
Segment Reporting
Management, including the Chief Operating Decision Maker, who is the Company’s Chief Executive Officer, reviews and assesses operating performance using segment net revenues and operating income (loss) before interest, other income (expense), net and income taxes. These performance measures include the allocation of expenses to the operating segments based on management’s judgment. In connection with the Company’s continued strategic transformation, effective July 1, 2014, the Company realigned its organizational structure. As a result of this organizational change, the Company has the following two reportable segments:
the Computing and Graphics segment, which primarily includes desktop and notebook processors
and chipsets, discrete graphics processing units (GPUs) and professional graphics; and
the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and
embedded processors, dense servers, semi-custom System-on-Chip (SoC) products, engineering services
and royalties.
Effective October 8, 2014, Dr. Lisa T. Su became the Company's Chief Executive Officer, succeeding Rory P. Read. This management change did not result in a change in the Company's reportable segments or to the fact that the Chief Operating Decision Maker is the Chief Executive Officer.
In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. Also included in this category are amortizations of acquired intangible assets, employee stock-based compensation expense, net restructuring and other special charges, workforce rebalancing severance charges, goodwill impairment charges, significant or unusual lower of cost or market inventory adjustments, loss on debt repurchases, a charge related to the limited waiver of exclusivity from GF and a net gain from licenses and settlement agreements regarding patent-related matters. The Company also reported the results of former businesses in the All Other category because the operating results were not material. In addition, during 2014, the Company reclassified $273 million of lower of cost or market inventory adjustment previously recorded in Computing and Graphics segment in 2012 to All Other category to conform with the current year's presentation.
The following table provides a summary of net revenue and operating loss by segment and income (loss) before income taxes for 2014, 2013 and 2012. The prior period results have been recast to reflect the Company’s new reportable segments.
 
 
2014
 
2013
 
2012
 
(In millions)
Net revenue:
 
 
 
 
 
Computing and Graphics

$
3,132

 
$
3,720

 
$
4,724

Enterprise, Embedded and Semi-Custom

2,374

 
1,577

 
698

All Other

 
2

 

Total net revenue
$
5,506

 
$
5,299

 
$
5,422

Operating income (loss):
 
 
 
 
 
Computing and Graphics

$
(76
)
 
$
(101
)
 
$
129

Enterprise, Embedded and Semi-Custom

399

 
295

 
18

All Other
(478
)
 
(91
)
 
(1,203
)
Total operating income (loss)
$
(155
)
 
$
103

 
$
(1,056
)
Interest income
3

 
5

 
8

Interest expense
(177
)
 
(177
)
 
(175
)
Other income (expense), net
(69
)
 
(5
)
 
6

Loss before income taxes
$
(398
)
 
$
(74
)
 
$
(1,217
)

The Company does not discretely allocate assets to its operating segments, nor does management evaluate operating segments using discrete asset information.
The Company’s operations outside the United States include research and development activities; assembly, test, mark and packaging activities; and sales, marketing and administrative activities. The Company conducts product and system research and development activities for its products in the United States, with additional design and development engineering teams located in China, Canada, India, Singapore, Taiwan, and Israel. The Company’s assembly, test, mark and packaging facilities are located in Malaysia and China. The Company’s material sales and marketing offices are located in the United States, Latin America, Europe and Asia.
The following table summarizes sales to external customers by country, which is based on the billing location of the customer:
 
2014
 
2013
 
2012
 
(In millions)
United States
$
1,030

 
$
801

 
$
407

Europe
325

 
460

 
469

China
2,324

 
2,519

 
3,131

Singapore
371

 
610

 
856

Japan
1,324

 
710

 
305

Other countries
132

 
199

 
254

Total sales to external customers
$
5,506

 
$
5,299

 
$
5,422


The Company had three customers that accounted for more than 10% of the Company’s consolidated net revenue in 2014 and 2013 and one customer that accounted for more than 10% of the Company's consolidated net revenue in 2012. Net sales to these customers were approximately 23%, 13% and 13% of consolidated net revenue in 2014, 17%, 11% and 10% of consolidated net revenue in 2013 and 22% of consolidated net revenue in 2012. The majority of the revenue from these customers was related to products from the Enterprise, Embedded and Semi-Custom segment in 2014 and 2013.  In 2012, the majority of the revenue from the customer was related to products from the Computing and Graphics segment.
The following table summarizes long-lived assets by geographic areas:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
United States
$
149

 
$
153

Malaysia
57

 
66

China
45

 
46

Singapore
17

 
18

Other countries
34

 
63

Total long-lived assets
$
302

 
$
346

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Stock-Based Incentive Compensation Plans
12 Months Ended
Dec. 27, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Incentive Compensation Plans
Stock-Based Incentive Compensation Plans
The Company’s stock-based incentive programs are intended to attract, retain and motivate highly qualified employees. On April 29, 2004, the Company’s stockholders approved the 2004 Equity Incentive Plan (the 2004 Plan). As of December 27, 2014, the Company also has stock options outstanding under previous equity compensation plans that were in effect before April 29, 2004, as well as equity compensation plans that the Company assumed as part of its SeaMicro acquisition. Shares reserved for future grants under the Company’s prior equity compensation plans were consolidated into the 2004 Plan; none of the reserved shares under the SeaMicro plan were consolidated into the 2004 Plan. As of December 27, 2014, the Company had 12.3 million shares of common stock that were available for future grants and 79 million shares reserved for issuance upon the exercise of outstanding stock options or the vesting of unvested restricted stock and restricted stock units.
Under the 2004 Plan, stock options generally vest and become exercisable over a three- to four-year period from the date of grant and expire within ten years after the grant date. Unvested shares that are reacquired by the Company from outstanding equity awards become available for grant and may be reissued as new awards.
Under the 2004 Plan, the Company can grant fair market value awards or full value awards. Fair market value awards are awards granted at or above the fair market value of the Company’s common stock on the date of grant. Full value awards are awards granted at less than the fair market value of the Company’s common stock on the date of grant. Awards can consist of (i) stock options and stock appreciation rights granted at the fair market value of the Company’s common stock on the date of grant and (ii) restricted stock or restricted stock units, as full value awards. The following is a description of the material terms of the awards that may be granted under the 2004 Plan.
Stock Options. A stock option is the right to purchase shares of the Company’s common stock at a fixed exercise price for a fixed period of time. Under the 2004 Plan, nonstatutory and incentive stock options may be granted. The exercise price of the shares subject to each nonstatutory stock option and incentive stock option cannot be less than 100% of the fair market value of the Company’s common stock on the date of the grant. The exercise price of each option granted under the 2004 Plan must be paid in full at the time of the exercise.
Stock Appreciation Rights. Awards of stock appreciation rights may be granted pursuant to the 2004 Plan. Stock appreciation rights may be granted to employees and consultants. No stock appreciation right may be granted at less than fair market value of the Company’s common stock on the date of grant or have a term of over ten years from the date of grant. Upon exercising a stock appreciation right, the holder of such right is entitled to receive payment from the Company in an amount determined by multiplying (i) the difference between the closing price of a share of the Company’s common stock on the date of exercise and the exercise price by (ii) the number of shares with respect to which the stock appreciation right is exercised. The Company’s obligation arising upon the exercise of a stock appreciation right may be paid in shares or in cash, or any combination thereof.
Restricted Stock. Restricted stock can be granted to any employee, director or consultant. The purchase price for an award of restricted stock is $0.00 per share. Restricted stock based on continued service may fully vest with no minimum time requirements. Restricted stock that is performance based generally may not fully vest for at least one year from the date of grant.
Restricted Stock Units. Restricted stock units are awards that can be granted to any employee, director or consultant and that obligate the Company to issue a specific number of shares of the Company’s common stock in the future if the vesting terms and conditions are satisfied. The purchase price for the shares is $0.00 per share. Restricted stock units based on continued service may fully vest with no minimum time requirements.
Performance-based Restricted Stock Units. The Company also can grant performance-based restricted stock units (the pRSUs). The performance metrics can be financial performance, non-financial performance and/or market condition.
Financial Performance and Market-based Restricted Stock Units. During 2014 and 2013, the Company granted 4,108,000 and 2,450,000 restricted stock units, respectively, with the Company's financial performance, a market condition and a service condition (financial performance and market-based restricted stock units) to the Company's senior executives. Such pRSU award reflects a target number of shares (Target Shares) that may be issued to the award recipient before adjusting based on the Company’s financial performance and market conditions. The actual number of shares the recipient receives is determined at the end of the specified performance period based on the actual financial results achieved by the Company versus certain pre-established Company financial performance goals. Those goals are AMD’s adjusted non-GAAP operating income plus interest expense over the performance period and total shareholder return (TSR) relative to the S&P 500 IT Sector over the same performance period. Depending on the results achieved during this time, the actual number of shares that a grant recipient receives at the end of the period may range from 0% to 200% of the Target Shares granted, based on the calculations described below. Restricted stock units that are performance based generally do not vest for at least one year from the date of grant.
The adjusted non-GAAP operating income plus interest expense goal was established at the inception of the award. At the end of the performance period, the number of actual shares to be awarded varies between 0%, if performance is below the minimum level, and 160%, if performance is at or above the maximum level. For performance between the minimum level and the maximum level, a proportionate percentage is applied based on relative performance between the minimum and the maximum levels.
The number of shares to be awarded at the end of the performance period is adjusted by a TSR modifier. The TSR modifier varies between 75% for stock performance at or below the minimum level and 125% at or above the maximum level. For performance between the minimum level and the maximum level, a proportionate TSR modifier between 75% and 125% is applied based on relative performance between the minimum and the maximum levels.
For these pRSUs granted in 2014, the earned shares vest 50% on December 31, 2015, at the end of the performance period, and the remaining 50% on December 31, 2016. For these pRSUs granted in 2013, the earned shares vest 50% on June 30, 2015, six months after the performance period, and the remaining 50% on June 30, 2016. Target Shares subject to these pRSU awards do not have dividend equivalent rights and do not have the voting rights of common stock until earned and issued, following the end of the applicable requisite service period. The expense for these awards, net of estimated forfeitures, is recorded over the requisite service period based on the number of Target Shares that are expected to be earned and the achievement of the adjusted non-GAAP operating income plus interest expense goal during the performance period. The Company estimates the fair value of these pRSUs using a Monte Carlo simulation model, as the TSR modifier contains a market condition. The weighted-average grant date fair value per share of these pRSUs for the years ended December 27, 2014 and December 28, 2013 was $3.80 and $4.07, respectively. The following weighted-average assumptions, in addition to projections of market conditions, were used to measure the weighted-average fair value:
 
2014
 
2013
Expected volatility
46.88
%
 
57.46
%
Risk-free interest rate
0.22
%
 
0.20
%
Expected dividends
%
 
%
Expected life
1.32 years

 
1.44 years


Market-based Restricted Stock Units. During 2012, the Company granted restricted stock units with both a market condition and a service condition (market-based restricted stock units) to the Company's senior executives. The market-based condition for these awards requires that AMD common stock maintains a weighted-average closing price during the three-year vesting period of equal to or greater than $10.00 per share over any 30-day period. Provided the market-based condition is satisfied and the respective officer remains an employee of the Company, the grants will vest in three equal annual installments on the applicable vesting date.
The Company estimated the fair value of the market-based restricted stock units using a Monte Carlo simulation model on the date of grant. As of December 27, 2014, there were 1,313,000 market-based restricted stock units outstanding with a grant date fair value of $5.2 million.
Valuation and Expense Information
Stock-based compensation expense related to employee stock options, restricted stock and restricted stock units was allocated in the consolidated statements of operations as follows:
 
2014
 
2013
 
2012
 
(In millions)
Cost of sales
$
3

 
$
5

 
$
8

Research and development
44

 
48

 
52

Marketing, general, and administrative
34

 
38

 
37

Total stock-based compensation expense, net of tax of $0
$
81

 
$
91

 
$
97


During 2014, 2013 and 2012, the Company did not realize any excess tax benefits related to stock-based compensation and therefore the Company did not record any effects relating to financing cash flows. The Company did not capitalize stock-based compensation cost as part of the cost of an asset because the cost was immaterial.
The Company uses the lattice-binomial model in determining the fair value of the employee stock options.
The weighted-average estimated fair value of employee stock options granted for the years ended December 27, 2014, December 28, 2013 and December 29, 2012 was $1.46, $1.52 and $2.12 per share respectively, using the following weighted-average assumptions:
 
2014
 
2013
 
2012
Expected volatility
53.36
%
 
59.03
%
 
56.24
%
Risk-free interest rate
1.15
%
 
0.79
%
 
0.52
%
Expected dividends
%
 
%
 
%
Expected life (in years)
3.86

 
3.83

 
3.79


The Company used a combination of the historical volatility of its common stock and the implied volatility for publicly traded options on the Company’s common stock as the expected volatility assumption required by the lattice-binomial model. The risk-free interest rate assumption is based upon observed interest rates commensurate with the term of the Company’s employee stock options. The expected dividend yield is zero as the Company does not expect to pay dividends in the future. The expected term of employee stock options represents the weighted-average period the stock options are expected to remain outstanding and is a derived output of the lattice-binomial model.
The following table summarizes stock option activity, including market-based stock options, and related information:
  
2014
 
2013
 
2012
  
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
(In millions, except share price)
Stock options:
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
35

 
$
5.08

 
38

 
$
5.51

 
34

 
$
7.36

Granted
8

 
$
3.73

 
6

 
$
3.63

 
17

 
$
3.41

Canceled
(4
)
 
$
7.64

 
(6
)
 
$
7.73

 
(8
)
 
$
11.26

Exercised
(3
)
 
$
1.47

 
(3
)
 
$
1.56

 
(5
)
 
$
2.71

Outstanding at end of year
36

 
$
4.78

 
35

 
$
5.08

 
38

 
$
5.51

Exercisable at end of year
23

 
$
5.28

 
22

 
$
5.62

 
22

 
$
6.14


Included in the table above are approximately 1,652,000 vested and 4,792,000 unvested stock options issued upon the acquisition of SeaMicro in 2012. The estimated fair value of the unvested stock options was $6.60 per share.
As of December 27, 2014, the weighted-average remaining contractual life of outstanding stock options was 3.44 years and their aggregate intrinsic value was $4 million. As of December 27, 2014, the weighted-average remaining contractual life of exercisable stock options was 2.45 years and their aggregate intrinsic value was $4 million. The total intrinsic value of stock options exercised for 2014, 2013 and 2012 was $7 million, $5 million and $18 million, respectively.
Restricted Stock and Restricted Stock Units. Restricted stock and restricted stock units vest in accordance with the terms and conditions established by the Compensation Committee of the Board of Directors, and are based either on continued service or continued service and performance. The cost of restricted stock and restricted stock units is determined using the fair value of the Company’s common stock on the date of the grant, and the compensation expense is recognized over the service period.
The summary of the changes in restricted stock and restricted stock units outstanding, including the pRSUs, during 2014, 2013 and 2012 is presented below:
  
2014
 
2013
 
2012
  
Number
of Shares
 
Weighted-
Average
Fair Value
 
Number
of Shares
 
Weighted-
Average
Fair Value
 
Number
of Shares
 
Weighted-
Average
Fair Value
 
(In millions except share price)
Unvested balance at beginning of period
40

 
$
4.52

 
25

 
$
6.41

 
24

 
$
7.07

Granted
23

 
$
3.89

 
28

 
$
3.81

 
17

 
$
5.43

Forfeited
(5
)
 
$
4.48

 
(3
)
 
$
5.76

 
(5
)
 
$
6.84

Vested
(15
)
 
$
4.90

 
(10
)
 
$
6.93

 
(11
)
 
$
6.05

Unvested balance at end of period
43

 
$
4.05

 
40

 
$
4.52

 
25

 
$
6.41


Included in the table above are approximately 322,000 shares of restricted stock granted upon the acquisition of SeaMicro in 2012. The weighted-average estimated fair value of the restricted stock was $4.03.
The total fair value of restricted stock and restricted stock units vested during 2014, 2013 and 2012 was $60 million, $36 million and $60 million, respectively. Compensation expense recognized for the restricted stock and restricted stock units for 2014, 2013 and 2012 was approximately $65 million, $68 million and $77 million, respectively.
As of December 27, 2014, the Company had $16 million of total unrecognized compensation expense, net of estimated forfeitures, related to stock options that will be recognized over the weighted-average period of 2.08 years.
As of December 27, 2014, the Company had $98 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock and restricted stock units that will be recognized over the weighted-average period of 1.75 years.
The summary of the changes in the pRSUs during 2014, 2013 and 2012 is presented below.
  
2014
 
2013
 
2012
 
(Shares in millions)
Unvested shares at beginning of period
5

 
2

 

Granted
5

 
3

 
2

Forfeited
(1
)
 

 

Vested

 

 

Unvested shares at end of period
9

 
5

 
2

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Other Employee Benefit Plans
12 Months Ended
Dec. 27, 2014
Compensation and Retirement Disclosure [Abstract]
Other Employee Benefit Plans
Other Employee Benefit Plans
The Company has a retirement savings plan, commonly known as a 401(k) plan, that allows participating employees in the United States to contribute up to 100% of their pre-tax salary subject to Internal Revenue Service limits. The Company matched 75% of employees' contributions up to 6% of their compensation, to a maximum match of $11,700, $11,475 and $11,250 for 2014, 2013 and 2012, respectively, which is 4.5% (75% of the 6%) of the Internal Revenue Service compensation limit. The Company’s contributions to the 401(k) plan for 2014, 2013 and 2012 were approximately $18 million, $19 million and $22 million, respectively.
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Commitments and Guarantees
12 Months Ended
Dec. 27, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitments and Guarantees
Commitments and Guarantees
Operating Leases
As of December 27, 2014, the Company's future non-cancelable operating lease commitments, including those for facilities vacated in connection with restructuring activities, were as follows:
Year
Operating
leases
 
(In millions)
2015
$
50

2016
46

2017
43

2018
41

2019
27

2019 and thereafter
133

 Total non-cancelable operating lease commitments
$
340


The Company leases certain of its facilities and in some jurisdictions the Company leases the land on which these facilities are built, under non-cancelable lease agreements that expire at various dates through 2025. The Company also leases certain manufacturing and office equipment for terms ranging from one to five years. Rent expense for 2014, 2013 and 2012 was $59 million, $64 million and $49 million, respectively.
In December 1998, the Company arranged for the sale of its marketing, general and administrative facility in Sunnyvale, California and leased it back for a period of 20 years. The Company recorded a deferred gain of $37 million on the sale and is amortizing it over the life of the lease. The lease expires in December 2018. At the beginning of the fourth lease year and every three years thereafter, the rent is adjusted by 200% of the cumulative increase in the consumer price index over the prior three-year period, up to a maximum of 6.9%.
In September 2013, the Company sold a light industrial building in Singapore and leased back a portion of the original space. The Company recorded a deferred gain of $14 million on the sale and is amortizing over the initial lease term. The initial lease term expires in September 2023 and provides for options to extend the lease for 4 years, at the end of the initial lease term, and for an additional 3.5 years thereafter.
Certain other operating leases contain provisions for escalating lease payments subject to changes in the consumer price index. Total future lease obligations as of December 27, 2014 were $340 million.
Purchase and Other Contractual Obligations
The Company’s purchase obligations primarily include the Company’s obligations to purchase wafers and substrates from third parties. As of December 27, 2014, total non-cancelable purchase obligations, excluding the Company's wafer purchase commitments to GF under the WSA, were $688 million.
The Company also had other contractual obligations, included in “Other long-term liabilities” on its consolidated balance sheet, which consists of $67 million of payments due under certain software and technology licenses that will be paid through 2018.
Future unconditional purchase obligations as of December 27, 2014 were as follows:
Year
Unconditional purchase obligations
 
(In millions)
2015
$
542

2016
85

2017
102

2018
26

2019

2020 and thereafter

 Total unconditional purchase commitments
$
755


Obligations to GF
Obligations to GF represent all of the Company's expected cash payments to GF based on wafer receipts and research and development activities. As of December 27, 2014, cash payments owed to GF were $80 million.
Warranties and Indemnities
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 CPU and AMD A-Series APU products purchased as individually packaged products that are commonly referred to as “processors in a box” and for PC workstation products. The Company has also offered extended limited warranties to certain customers of “tray” microprocessor products for each of its business units and/or workstation graphics products who have written agreements with the Company and target their computer systems at the commercial and/or embedded markets.
Changes in the Company’s estimated liability for product warranty during the years ended December 27, 2014 and December 28, 2013 are as follows:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Beginning balance
$
17

 
$
16

New warranties issued during the period
32

 
27

Settlements during the period
(39
)
 
(25
)
Changes in liability for pre-existing warranties during the period, including expirations
9

 
(1
)
Ending balance
$
19

 
$
17


In addition to product warranties, the Company, from time to time in its normal course of business, indemnifies other parties, with whom it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company, with respect to certain matters. In these limited matters, the Company has agreed to hold certain third parties harmless against specific types of claims or losses, such as those arising from a breach of representations or covenants, third-party claims that the Company’s products when used for their intended purpose(s) and under specific conditions infringe the intellectual property rights of a third party, or other specified claims made against the indemnified party. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material.
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Contingencies
12 Months Ended
Dec. 27, 2014
Loss Contingency [Abstract]
Contingencies
Contingencies
Securities Class Action
On March 20, 2014, a purported shareholder derivative lawsuit captioned Wessels v. Read, et al., Case No. 1:14-cv-262486 was filed against the Company (as a nominal defendant only) and certain of its directors and officers in the Santa Clara County Superior Court of the State of California. The complaint purports to assert claims against the Company and certain individual directors and officers for breach of fiduciary duty, waste of corporate assets and unjust enrichment. The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual directors and officers regarding the Company’s 32nm technology and “Llano” product, which statements and omissions, the plaintiffs claim, allegedly operated to inflate artificially the price paid for the Company’s common stock during the period. Based upon information presently known to the Company’s management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company’s financial condition, cash flows or results of operations.
On January 15, 2014, a class action lawsuit captioned Hatamian v. AMD, et al., C.A. No. 3:14-cv-00226 was filed against the Company in the United States District Court for the Northern District of California. The complaint purports to assert claims against the Company and certain individual officers for alleged violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5 of the Exchange Act. The plaintiff seeks to represent a proposed class of all persons who purchased or otherwise acquired the Company’s common stock during the period April 4, 2011 through October 18, 2012. The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual officers regarding our 32nm technology and “Llano” product, which statements and omissions, the plaintiffs claim, allegedly operated to inflate artificially the price paid for the Company’s common stock during the period. The complaint seeks unspecified compensatory damages, attorneys’ fees and costs. Based upon information presently known to the Company’s management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company’s financial condition, cash flows or results of operations.
Environmental Matters
The Company is named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale, California that are on the National Priorities List. Since 1981, the Company has discovered hazardous material releases to the groundwater from former underground tanks and proceeded to investigate and conduct remediation at these three sites. The chemicals released into the groundwater were commonly used in the semiconductor industry in the United States in the wafer fabrication process prior to 1979.
In 1991, the Company received Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board relating to the three sites. The Company has entered into settlement agreements with other responsible parties on two of the orders. During the term of such agreements, other parties have agreed to assume most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders. The Company remains responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations under the settlement agreements.
To address anticipated future remediation costs under the orders, the Company has computed and recorded an estimated environmental liability of approximately $5 million and has not recorded any potential insurance recoveries in determining the estimated costs of the cleanup. The progress of future remediation efforts cannot be predicted with certainty and these costs may change. The Company believes that any amount in addition to what has already been accrued would not be material.
Other Legal Matters
The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With respect to these matters, based on the management's current knowledge, the Company believes that the amount or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material adverse effect on the Company's financial position, results of operations, or cash flows.
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Restructuring
12 Months Ended
Dec. 27, 2014
Restructuring and Related Activities [Abstract]
Restructuring
Restructuring
2014 Restructuring Plan
In October 2014, the Company implemented a restructuring plan designed to improve operating efficiencies. The plan involved a reduction of global headcount by approximately 6%, largely completed by the end of 2014, and an alignment of its real estate footprint with its reduced headcount, largely expected to be completed by the end of first half of 2015. The Company 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. In accordance with the restructuring plan, the Company expects to record a restructuring charge of approximately $13 million in 2015, primarily related to real estate actions.
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 largely completed as of the end of the third quarter of 2013.
2011 Restructuring Plan
In 2012, the Company recorded an approximately $8 million for severance and costs related to certain employee benefits. The plan was completed as of the end of the first quarter of 2012.
The following table provides a summary of the restructuring activities during 2014 and 2013 and the related liabilities recorded in “Accrued and other current liabilities” and “Other long-term liabilities” on the Company’s consolidated balance sheets remaining as of December 27, 2014:
 
Severance
and related
benefits
 
Other exit
related
costs
 
Total
 
(In millions)
Balance at December 29, 2012
$
41

 
$
17

 
$
58

Charges (reversals), net
(5
)
 
11

 
6

Cash payments
(33
)
 
(21
)
 
(54
)
Balance at December 28, 2013
3

 
7

 
10

Charges (reversals), net
42

 
16

 
58

Cash payments
(19
)
 
(4
)
 
(23
)
Non-cash charges

 
(6
)
 
(6
)
Balance at December 27, 2014
$
26

 
$
13

 
$
39


The following table provides a summary of each major type of cost associated with the 2014, 2012 and 2011 restructuring plans through December 27, 2014:
 
2014
 
2013
 
2012
 
(In millions)
Severance and benefits charges (reversals), net
$
42

 
$
(5
)
 
$
95

Contract or program termination charges
6

 

 

Asset impairments
6

 

 
4

Facility consolidation and closure charges
4

 
11

 
1

Total
$
58

 
$
6

 
$
100

Executive Officer Separation
In the fourth quarter of 2014, the Company recorded other special charges of $13 million. The amount primarily includes $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.
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Significant Accounting Policies (Policies)
12 Months Ended
Dec. 27, 2014
Fiscal Year
Fiscal Year. The Company uses a 52 or 53 week fiscal year ending on the last Saturday in December. Fiscal 2014, 2013 and 2012 ended December 27, 2014, December 28, 2013 and December 29, 2012, respectively, each consisted of 52 weeks.
Principles of Consolidation
Principles of Consolidation. The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries. Upon consolidation, all significant intercompany accounts and transactions are eliminated.
Use of Estimates
Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results are likely to differ from those estimates, and such differences may be material to the financial statements. Areas where management uses subjective judgment include, but are not limited to, revenue allowances, inventory valuation, valuation and impairment of goodwill, valuation of investments in marketable securities, deferred income taxes and restructuring charges.
Revenue Recognition
Revenue Recognition. The Company recognizes revenue from products sold directly to customers, including original equipment manufacturers (OEMs), when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred and collectability is reasonably assured. Estimates of product returns, allowances and future price reductions, based on actual historical experience and other known or anticipated trends and factors, are recorded at the time revenue is recognized. The Company sells to distributors under terms allowing the majority of distributors certain rights of return and price protection on unsold merchandise held by them. The distributor agreements, which may be cancelled by either party upon specified notice, generally contain a provision for the return of those of the Company’s products that the Company has removed from its price book and that are not more than 12 months older than the manufacturing code date. In addition, some agreements with distributors may contain standard stock rotation provisions permitting limited levels of product returns. Therefore, the Company is unable to estimate the product returns and pricing when the product is sold to the distributors. Accordingly, the Company defers the gross margin resulting from the deferral of both revenue and related product costs from sales to distributors with agreements that have the aforementioned terms until the merchandise is resold by the distributors and reports such deferred amounts as “Deferred income on shipments to distributors” on its consolidated balance sheet. Products are sold to distributors at standard published prices that are contained in price books that are broadly provided to the Company’s various distributors. Distributors are then required to pay for these products within the Company's standard contractual terms, which are typically net 60 days. The Company records allowances for price protection given to distributors and customer rebates in the period of distributor re-sale. The Company determines these allowances based on specific contractual terms with its distributors. Price reductions generally do not result in sales prices that are less than the Company’s product cost. Deferred income on shipments to distributors is revalued at the end of each period based on the change in inventory units at distributors, latest published prices and latest product costs.
The Company records estimated reductions to revenue under distributor and customer incentive programs, including certain cooperative advertising and marketing promotions and volume based incentives and special pricing arrangements, at the time the related revenues are recognized. For transactions where the Company reimburses a customer for a portion of the customer’s cost to perform specific product advertising or marketing and promotional activities, such amounts are recorded as a reduction of revenue unless they qualify for expense recognition. Shipping and handling costs associated with product sales are included in cost of sales.
Deferred revenue and related product costs were as follows:
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Deferred revenue
$
130

 
$
253

Deferred cost of sales
(58
)
 
(108
)
Deferred income on shipments to distributors
$
72

 
$
145

Inventories
Inventories. Inventories are stated at standard cost adjusted to approximate the lower of actual cost (first-in, first-out method) or market. The Company adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The Company fully reserves for inventories and noncancelable purchase orders for inventory deemed obsolete. The Company performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by the Company, additional inventory adjustments may be required.
Goodwill
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired. In accordance with Accounting Standards Codification (ASC) 350, “Goodwill and Other Intangible Assets,” goodwill is not amortized, but rather is tested for impairment at least annually or more frequently if indicators of impairment present. The Company performs its annual goodwill impairment analysis as of the first day of the fourth quarter of each year and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The analysis of potential impairment of goodwill requires a two-step process. The first step of the impairment test is to compare the fair value of each reporting unit to its carrying value. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value.
Commitments and Contingencies
Commitments and Contingencies. From time to time the Company is a defendant or plaintiff in various legal actions that arise in the normal course of business. The Company is also a party to environmental matters, including local, regional, state and federal government clean-up activities at or near locations where the Company currently or has in the past conducted business. The Company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of reasonably possible losses. A determination of the amount of reserves required for these commitments and contingencies, if any, that would be charged to earnings, includes assessing the probability of adverse outcomes and estimating the amount of potential losses. The required reserves, if any, may change in the future due to new developments in each matter or changes in circumstances such as a change in settlement strategy. Changes in required reserves could increase or decrease the Company’s earnings in the period the changes are made. (See Notes 15 and 16).
Restructuring Charges
Restructuring Charges. Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on the Company's policies and practices and negotiated settlements.
Cash Equivalents
Cash Equivalents. Cash equivalents consist of financial instruments that are readily convertible into cash and have original maturities of three months or less at the time of purchase.
Investments in Certain Debt and Equity Securities
Investments in Certain Debt and Equity Securities. The Company classifies its investments in debt and marketable equity securities at the date of acquisition as available-for-sale. Available-for-sale securities are reported at fair value with the related unrealized gains and losses included, net of tax, in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses and declines in the value of available-for-sale securities determined to be other than temporary are included in other income (expense), net. The cost of securities sold is determined based on the specific identification method.
The Company classifies investments in debt securities with maturities of more than three months at the time of purchase as marketable securities on its consolidated balance sheet. Classification of these securities as current is based on the Company's intent and belief in its ability to sell these securities and use the proceeds from sale in operations within 12 months.
Derivative Financial Instruments
Derivative Financial Instruments. The Company maintains a foreign currency hedging strategy which uses derivative financial instruments to mitigate the risks associated with changes in foreign currency exchange rates. This strategy takes into consideration all of the Company’s consolidated exposures. The Company does not use derivative financial instruments for trading or speculative purposes.
In applying its strategy, the Company used foreign currency forward contracts to hedge certain forecasted expenses denominated in foreign currencies. The Company designated these contracts as cash flow hedges of forecasted expenses, to the extent eligible under the accounting rules, and evaluates hedge effectiveness prospectively and retrospectively. As such, the effective portion of the gain or loss on these contracts is reported as a component of accumulated other comprehensive loss and reclassified to earnings in the same line item as the associated forecasted transaction and in the same period during which the hedged transaction affects earnings. Any ineffective portion is immediately recorded in earnings.
The Company also uses, from time to time, foreign currency forward contracts to economically hedge recognized foreign currency exposures on the balance sheets of various subsidiaries, primarily those denominated in Canadian dollars. The Company does not designate these forward contracts as hedging instruments. Accordingly, the gain or loss associated with these contracts is immediately recorded in earnings.
Property, Plant and Equipment
Property, Plant and Equipment. Property, plant and equipment are stated at cost. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets for financial reporting purposes. Estimated useful lives for financial reporting purposes are as follows: equipment, two to six years; buildings and building improvements, up to 40 years; and leasehold improvements, measured by the shorter of the remaining terms of the leases or the estimated useful economic lives of the improvements.
Product Warranties
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 CPU and AMD APU A-Series products that are commonly referred to as “processors in a box” for PC workstation products. The Company has also offered extended limited warranties to certain customers of “tray” microprocessor products and/or workstation 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
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
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. Marketing, communications and advertising expenses for 2014, 2013 and 2012 were approximately $194 million, $210 million and $287 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
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.
Diluted net income per share is computed based on the weighted-average number of shares outstanding plus any potentially dilutive shares outstanding. Potentially dilutive shares include stock options, restricted stock, restricted stock units and shares issuable upon the conversion of convertible debt.
The following table sets forth the components of basic and diluted loss per share:
 
2014
 
2013
 
2012
 
(In millions, except per share amounts)
Numerator—Net loss:
 
 
 
 
 
Numerator for basic and diluted net loss per share
$
(403
)
 
$
(83
)
 
$
(1,183
)
Denominator—Weighted-average shares:
 
 
 
 
 
Denominator for basic and diluted net loss per share
768

 
754

 
741

Net loss per share:
 
 
 
 
 
Basic
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)
Diluted
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)

Potential shares from outstanding stock options, restricted stock and restricted stock units totaling approximately 48 million, 59 million and 45 million for 2014, 2013 and 2012, respectively, were not included in the net loss per share calculations as their inclusion would have been anti-dilutive.
Potential shares issuable under the Company’s 5.75% Convertible Senior Notes due 2012 (5.75% Notes) totaling 15 million for 2012 were not included in the net loss per share calculations as their inclusion would have been anti-dilutive.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss. Unrealized holding gains or losses on the Company’s available-for-sale securities, unrealized holding gains and losses on derivative financial instruments qualifying as cash flow hedges and changes in minimum pension liabilities are included in other comprehensive loss.
The table below summarizes the changes in accumulated other comprehensive loss by component for the years ended December 27, 2014 and December 28, 2013:
 
December 27,
2014
 
December 28,
2013
 
Unrealized gains (losses) on available-for-sale securities
 
Unrealized gains (losses) on cash flow hedges
 
Total
 
Unrealized gains (losses) on available-for-sale securities
Unrealized gains (losses) on cash flow hedges
 
Total
 
(In millions)
Beginning balance
$
1

 
$
(3
)
 
$
(2
)
 
$

$
(3
)
 
$
(3
)
Unrealized gains (losses) arising during the period, net of tax effects

 
(9
)
 
(9
)
 
(1
)
(6
)
 
(7
)
Reclassification adjustment for (gains) losses realized and included in net loss, net of tax effects

 
6

 
6

 
2

6

 
8

Total other comprehensive income (loss)

 
(3
)
 
(3
)
 
1


 
1

Ending balance
$
1

 
$
(6
)
 
$
(5
)
 
$
1

$
(3
)
 
$
(2
)
Stock-Based Compensation
Stock-Based Compensation. The Company estimates stock-based compensation cost for stock options at the grant date based on the option’s fair-value as calculated by the lattice-binomial option-pricing model. For restricted stock and restricted stock units, fair value is based on the closing price of the Company’s common stock on the grant date. The Company estimates the grant-date fair value of stock options, restricted stock and restricted stock units that involve a market condition using a Monte Carlo simulation model. The expense is recognized using the single option method which is ratable on a straight-line basis over the requisite service period.
The application of the lattice-binomial option-pricing model requires the use of extensive actual employee exercise behavior data and the use of a number of complex assumptions including expected volatility of the Company’s common stock, risk-free interest rate and expected dividends. Significant changes in any of these assumptions could materially affect the fair value of stock options granted in the future.
Forfeiture rates are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates in order to derive the Company’s best estimate of awards ultimately expected to vest.
Recently Issued Accounting Standards
Recently Issued Accounting Standards
Disclosure of Going Concern Uncertainties. In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 will be effective in the fourth quarter of 2016, with early adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2014-15 on its consolidated financial statements.
Share-Based Payments with Performance Targets. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target be treated as a performance condition if it affects vesting and could be achieved after the requisite service period is rendered. ASU 2014-12 will be effective in the first quarter of 2016, with early adoption permitted. The Company may use either of two methods: (i) prospective application to all awards granted or modified after the effective date or (ii) retrospective application to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently evaluating the impact of its pending adoption of ASU 2014-12 on its consolidated financial statements and has not yet determined which method it will apply.
Revenue Recognition. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), which creates a single source of revenue guidance under U.S. GAAP for all companies in all industries. The core principle of ASU 2014-09 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates. ASU 2014-09 also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. ASU 2014-09 will be effective for the Company in the first quarter of 2017 and early adoption is not permitted. The Company may adopt ASU 2014-09 either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined which approach it will apply.
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Significant Accounting Policies (Tables)
12 Months Ended
Dec. 27, 2014
Accounting Policies [Abstract]
Deferred Revenue and Related Product Costs
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Deferred revenue
$
130

 
$
253

Deferred cost of sales
(58
)
 
(108
)
Deferred income on shipments to distributors
$
72

 
$
145

Net Income (Loss) Per Share
 
2014
 
2013
 
2012
 
(In millions, except per share amounts)
Numerator—Net loss:
 
 
 
 
 
Numerator for basic and diluted net loss per share
$
(403
)
 
$
(83
)
 
$
(1,183
)
Denominator—Weighted-average shares:
 
 
 
 
 
Denominator for basic and diluted net loss per share
768

 
754

 
741

Net loss per share:
 
 
 
 
 
Basic
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)
Diluted
$
(0.53
)
 
$
(0.11
)
 
$
(1.60
)
Accumulated Other Comprehensive Loss
 
December 27,
2014
 
December 28,
2013
 
Unrealized gains (losses) on available-for-sale securities
 
Unrealized gains (losses) on cash flow hedges
 
Total
 
Unrealized gains (losses) on available-for-sale securities
Unrealized gains (losses) on cash flow hedges
 
Total
 
(In millions)
Beginning balance
$
1

 
$
(3
)
 
$
(2
)
 
$

$
(3
)
 
$
(3
)
Unrealized gains (losses) arising during the period, net of tax effects

 
(9
)
 
(9
)
 
(1
)
(6
)
 
(7
)
Reclassification adjustment for (gains) losses realized and included in net loss, net of tax effects

 
6

 
6

 
2

6

 
8

Total other comprehensive income (loss)

 
(3
)
 
(3
)
 
1


 
1

Ending balance
$
1

 
$
(6
)
 
$
(5
)
 
$
1

$
(3
)
 
$
(2
)
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Supplemental Balance Sheet Information (Tables)
12 Months Ended
Dec. 27, 2014
Balance Sheet Related Disclosures [Abstract]
Inventories
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Raw materials
$
40

 
$
30

Work in process
431

 
727

Finished goods
214

 
127

Total inventories, net
$
685

 
$
884

Property, Plant and Equipment
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Land and land improvements
$
4

 
$
3

Buildings and leasehold improvements
246

 
246

Equipment
1,416

 
1,466

Construction in progress
14

 
18

 
1,680

 
1,733

Accumulated depreciation and amortization
(1,378
)
 
(1,387
)
Total property, plant and equipment, net
$
302

 
$
346

Other Assets
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Software and technology licenses
$
219

 
$
280

Other
125

 
106

Total other assets
$
344

 
$
386

Accrued and Other Current Liabilities
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Accrued compensation and benefits
$
139

 
$
186

Marketing programs and advertising expenses
141

 
150

Software technology and licenses payable
39

 
27

Other accrued and current liabilities
239

 
167

Total accrued and other current liabilities
$
558

 
$
530

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Goodwill and Acquired Intangible Assets (Tables)
12 Months Ended
Dec. 27, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill
 
Computing and Graphics
 
Enterprise, Embedded and Semi-Custom
 
All Other
 
Total
 
(In millions)
Initial goodwill due to ATI acquisition
$
1,194

 
$
255

 
$
745

 
$
2,194

Initial goodwill due to SeaMicro acquisition
165

 
65

 

 
230

 
1,359

 
320

 
745

 
2,424

Accumulated impairment losses
(1,126
)
 

 
(745
)
 
(1,871
)
Balance as of December 29, 2012
233

 
320

 

 
553

Impairment charges

 

 

 

Balance as of December 28, 2013
233

 
320

 

 
553

Impairment charges
(233
)
 

 

 
(233
)
Balance as of December 27, 2014

 
320

 

 
320

Accumulated impairment losses
$
(1,359
)
 
$

 
$
(745
)
 
$
(2,104
)
Schedule of Acquired Intangible Assets by Major Class
 
 
December 27, 2014
 
December 28, 2013
 
 
Gross
 
Accumulated Amortization
 
Net
 
Weighted-average amortization period
 
Gross
 
Accumulated Amortization
 
Net
 
 
(In millions, except years)
Developed technology
 
$
258

 
$
(201
)
 
$
57

 
5.15 years
 
$
258

 
$
(189
)
 
$
69

In-process research and development
 
6

 

 
6

 
N/A
 
6

 

 
6

Customer relationships
 
168

 
(167
)
 
1

 
1.25 years
 
168

 
(166
)
 
2

Trademark and trade name
 
37

 
(36
)
 
1

 
1.25 years
 
37

 
(36
)
 
1

Total
 
$
469

 
$
(404
)
 
$
65

 
4.56 years
 
$
469

 
$
(391
)
 
$
78

 
 
2014
 
2013
 
2012
 
 
(In millions)
Developed technology
 
$
13

 
$
13

 
$
9

Customer relationships
 
1

 
1

 
1

Trademark and trade name
 

 
4

 
4

Total
 
$
14

 
$
18

 
$
14

Schedule of Acquired Intangible Assets, Future Amortization Expense
Year
(In millions)
2015
$
13

2016
11

2017
11

2018
11

2019
11

2020 and thereafter
2

Total intangible assets subject to amortization
59

In-process research and development
6

Total intangible assets, net
$
65

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Income Taxes (Tables)
12 Months Ended
Dec. 27, 2014
Income Tax Disclosure [Abstract]
Provision (Benefit) for Income Taxes
 
2014
 
2013
 
2012
 
(In millions)
Current:
 
 
 
 
 
U.S. Federal
$
(1
)
 
$
(2
)
 
$

U.S. State and Local

 

 

Foreign National and Local
6

 
10

 
6

Total
5

 
8

 
6

Deferred:
 
 
 
 
 
U.S. Federal

 
3

 
(37
)
Foreign National and Local

 
(2
)
 
(3
)
Total

 
1

 
(40
)
Provision (benefit) for income taxes
$
5

 
$
9

 
$
(34
)
Schedule of Income (Loss) before Income Tax
 
2014
 
2013
 
2012
 
(In millions)
U.S.
$
(621
)
 
$
(397
)
 
$
(1,242
)
Foreign
223

 
323

 
25

Total pre-tax loss
$
(398
)
 
$
(74
)
 
$
(1,217
)
Schedule of Deferred Tax Assets and Liabilities
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Deferred tax assets:
 
 
 
Net operating loss carryovers
$
1,978

 
$
1,701

Deferred distributor income
28

 
49

Inventory valuation
22

 
32

Accrued expenses not currently deductible
107

 
113

Acquired intangibles
248

 
343

Tax deductible goodwill
295

 
271

Federal and state tax credit carryovers
391

 
321

Foreign capitalized research and development costs
41

 
22

Foreign research and development ITC credits
282

 
305

Discount of convertible notes
11

 
65

Other
167

 
217

Total deferred tax assets
3,570

 
3,439

Less: valuation allowance
(3,495
)
 
(3,375
)
Total deferred tax assets, net of valuation allowance
75

 
64

Deferred tax liabilities:
 
 
 
Acquired intangibles
(37
)
 
(28
)
Other
(19
)
 
(17
)
Total deferred tax liabilities
(56
)
 
(45
)
Net deferred tax assets
$
19

 
$
19

Schedule of Deferred Tax Assets and Liabilities, Current and Noncurrent
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Current deferred tax assets
$
2

 
$
2

Non-current deferred tax assets
33

 
18

Current deferred tax liabilities
(16
)
 
(1
)
Net deferred tax assets
$
19

 
$
19

Summary of Tax Attribute Carryforwards
Carryforward
Federal
 
State /
Provincial
 
Expiration
 
(In millions)
 
 
U.S.-net operating loss carryovers
$
5,432

 
$
231

 
2015 to 2034
U.S.-credit carryovers
$
403

 
$
193

 
2018 to 2034
Canada-net operating loss carryovers
$
217

 
$
217

 
2025 to 2028
Canada-credit carryovers
$
357

 
$
31

 
2021 to 2034
Canada-R&D pools
$
154

 
$
154

 
no expiration
Barbados-net operating loss carryovers
$
198

 
N/A

 
2015 to 2017
Other foreign net operating loss carryovers
$
5

 
N/A

 
various
Schedule of Effective Income Tax Rate Reconciliation
 
2014
 
2013
 
2012
 
(In millions)
Statutory federal income tax benefit at 35% rate
$
(139
)
 
$
(26
)
 
$
(426
)
State taxes, net of federal benefit
1

 
1

 
1

Foreign (income) expense at other than U.S. rates
1

 
15

 
(13
)
U.S. valuation allowance generated
144

 
22

 
406

Credit monetization
(2
)
 
(3
)
 
(2
)
Provision (benefit) for income taxes
$
5

 
$
9

 
$
(34
)
Schedule of Unrecognized Tax Benefits Roll Forward
 
2014
 
2013
 
2012
 
(In millions)
Balance at beginning of year
$
52

 
$
56

 
$
69

Increases for tax positions taken in prior years
1

 
1

 
3

Decreases for tax positions taken in prior years

 
(2
)
 
(4
)
Increases for tax positions taken in the current year
2

 
4

 
3

Decreases for settlements with taxing authorities
(27
)
 
(7
)
 
(15
)
Balance at end of year
$
28

 
$
52

 
$
56

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Debt and Other Obligations (Tables)
12 Months Ended
Dec. 27, 2014
Debt Instrument, Redemption [Line Items]
Schedule of Debt and Other Obligations
 
December 27,
2014
 
December 28,
2013
 
(In millions)
6.00% Notes, net of discount
$
42

 
$
517

8.125% Notes, net of discount

 
470

6.75% Notes
600

 

6.75% Notes, interest rate swap
3

 

7.75% Notes
450

 
500

7.50% Notes
475

 
500

7.00% Notes
500

 

Secured Revolving Line of Credit
130

 
55

Capital lease obligations
12

 
16

Total debt
2,212

 
2,058

Less: current portion
177

 
60

Total debt, less current portion
$
2,035

 
$
1,998

Schedule of Information Related to Equity and Debt Components
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Carrying amount of the equity component
$
125

 
$
159

Principal amount of the 6.00% Notes
42

 
530

Unamortized discount

 
(13
)
Net carrying amount
$
42

 
$
517

Schedule of Information Related to Interest Rates and Expenses
 
2014
 
2013
 
2012
 
(In millions, except percentages)
Effective interest rate
8
%
 
8
%
 
8
%
Interest cost related to contractual interest coupon
$
9

 
$
45

 
$
44

Interest cost related to amortization of the discount
$
3

 
$
10

 
$
9

Schedule of Future Payments on Debt and Other Obligations
 
Long Term
Debt
(Principal
only)
 
Short Term Debt (Principal only)
 
Capital
Leases
 
(In millions)
2015
$

 
$
172

 
$
5

2016

 

 
6

2017

 

 
1

2018

 

 

2019
600

 

 

2020 and thereafter
1,425

 

 

Total
2,025

 
172

 
12

Less: imputed interest

 

 

Total
$
2,025

 
$
172

 
$
12

7.75% Senior Notes Due 2020
Debt Instrument, Redemption [Line Items]
Debt Instrument Redemption
Period
Price as
Percentage of
Principal Amount
Beginning on August 1, 2015 through July 31, 2016
103.875
%
Beginning on August 1, 2016 through July 31, 2017
102.583
%
Beginning on August 1, 2017 through July 31, 2018
101.292
%
On August 1, 2018 and thereafter
100.000
%
7.00% Senior Notes due 2024
Debt Instrument, Redemption [Line Items]
Debt Instrument Redemption
Period
Price as
Percentage of
Principal Amount
Beginning on July 1, 2019 through June 30, 2020
103.500
%
Beginning on July 1, 2020 through June 30, 2021
102.333
%
Beginning on July 1, 2021 through June 30, 2022
101.167
%
On July 1, 2022 and thereafter
100.000
%
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Other Income (Expense), Net (Tables)
12 Months Ended
Dec. 27, 2014
Income Statement Related Disclosures [Abstract]
Other Income (Expense), Net
 
2014
 
2013
 
2012
 
(In millions)
Impairment charge on marketable securities
$

 
$

 
$
(4
)
Net loss on debt redemptions
(61
)
 
(1
)
 

Other
(8
)
 
(4
)
 
10

Other income (expense), net
$
(69
)
 
$
(5
)
 
$
6

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Segment Reporting (Tables)
12 Months Ended
Dec. 27, 2014
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment
 
2014
 
2013
 
2012
 
(In millions)
Net revenue:
 
 
 
 
 
Computing and Graphics

$
3,132

 
$
3,720

 
$
4,724

Enterprise, Embedded and Semi-Custom

2,374

 
1,577

 
698

All Other

 
2

 

Total net revenue
$
5,506

 
$
5,299

 
$
5,422

Operating income (loss):
 
 
 
 
 
Computing and Graphics

$
(76
)
 
$
(101
)
 
$
129

Enterprise, Embedded and Semi-Custom

399

 
295

 
18

All Other
(478
)
 
(91
)
 
(1,203
)
Total operating income (loss)
$
(155
)
 
$
103

 
$
(1,056
)
Interest income
3

 
5

 
8

Interest expense
(177
)
 
(177
)
 
(175
)
Other income (expense), net
(69
)
 
(5
)
 
6

Loss before income taxes
$
(398
)
 
$
(74
)
 
$
(1,217
)
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area
 
2014
 
2013
 
2012
 
(In millions)
United States
$
1,030

 
$
801

 
$
407

Europe
325

 
460

 
469

China
2,324

 
2,519

 
3,131

Singapore
371

 
610

 
856

Japan
1,324

 
710

 
305

Other countries
132

 
199

 
254

Total sales to external customers
$
5,506

 
$
5,299

 
$
5,422

Schedule of Long-lived Assets in Individual Foreign Countries by Geographic Area
 
December 27,
2014
 
December 28,
2013
 
(In millions)
United States
$
149

 
$
153

Malaysia
57

 
66

China
45

 
46

Singapore
17

 
18

Other countries
34

 
63

Total long-lived assets
$
302

 
$
346

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Stock-Based Incentive Compensation Plans (Tables)
12 Months Ended
Dec. 27, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Payment Award, Performance-based Awards, Valuation Assumptions
 
2014
 
2013
Expected volatility
46.88
%
 
57.46
%
Risk-free interest rate
0.22
%
 
0.20
%
Expected dividends
%
 
%
Expected life
1.32 years

 
1.44 years

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
 
2014
 
2013
 
2012
 
(In millions)
Cost of sales
$
3

 
$
5

 
$
8

Research and development
44

 
48

 
52

Marketing, general, and administrative
34

 
38

 
37

Total stock-based compensation expense, net of tax of $0
$
81

 
$
91

 
$
97

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
 
2014
 
2013
 
2012
Expected volatility
53.36
%
 
59.03
%
 
56.24
%
Risk-free interest rate
1.15
%
 
0.79
%
 
0.52
%
Expected dividends
%
 
%
 
%
Expected life (in years)
3.86

 
3.83

 
3.79

Schedule of Share-based Compensation, Stock Options, Activity
  
2014
 
2013
 
2012
  
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
Number
of Shares
 
Weighted-
Average
Exercise
Price
 
(In millions, except share price)
Stock options:
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
35

 
$
5.08

 
38

 
$
5.51

 
34

 
$
7.36

Granted
8

 
$
3.73

 
6

 
$
3.63

 
17

 
$
3.41

Canceled
(4
)
 
$
7.64

 
(6
)
 
$
7.73

 
(8
)
 
$
11.26

Exercised
(3
)
 
$
1.47

 
(3
)
 
$
1.56

 
(5
)
 
$
2.71

Outstanding at end of year
36

 
$
4.78

 
35

 
$
5.08

 
38

 
$
5.51

Exercisable at end of year
23

 
$
5.28

 
22

 
$
5.62

 
22

 
$
6.14

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units, Activity
  
2014
 
2013
 
2012
 
(Shares in millions)
Unvested shares at beginning of period
5

 
2

 

Granted
5

 
3

 
2

Forfeited
(1
)
 

 

Vested

 

 

Unvested shares at end of period
9

 
5

 
2

  
2014
 
2013
 
2012
  
Number
of Shares
 
Weighted-
Average
Fair Value
 
Number
of Shares
 
Weighted-
Average
Fair Value
 
Number
of Shares
 
Weighted-
Average
Fair Value
 
(In millions except share price)
Unvested balance at beginning of period
40

 
$
4.52

 
25

 
$
6.41

 
24

 
$
7.07

Granted
23

 
$
3.89

 
28

 
$
3.81

 
17

 
$
5.43

Forfeited
(5
)
 
$
4.48

 
(3
)
 
$
5.76

 
(5
)
 
$
6.84

Vested
(15
)
 
$
4.90

 
(10
)
 
$
6.93

 
(11
)
 
$
6.05

Unvested balance at end of period
43

 
$
4.05

 
40

 
$
4.52

 
25

 
$
6.41

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Commitments and Guarantees (Tables)
12 Months Ended
Dec. 27, 2014
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases
Year
Operating
leases
 
(In millions)
2015
$
50

2016
46

2017
43

2018
41

2019
27

2019 and thereafter
133

 Total non-cancelable operating lease commitments
$
340

Schedule of Future Unconditional Purchase Obligations
Year
Unconditional purchase obligations
 
(In millions)
2015
$
542

2016
85

2017
102

2018
26

2019

2020 and thereafter

 Total unconditional purchase commitments
$
755

Product Warranty Disclosure
 
December 27,
2014
 
December 28,
2013
 
(In millions)
Beginning balance
$
17

 
$
16

New warranties issued during the period
32

 
27

Settlements during the period
(39
)
 
(25
)
Changes in liability for pre-existing warranties during the period, including expirations
9

 
(1
)
Ending balance
$
19

 
$
17

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Restructuring (Tables)
12 Months Ended
Dec. 27, 2014
Restructuring Cost and Reserve [Line Items]
Schedule of Restructuring Activities and Related Liabilities
 
Severance
and related
benefits
 
Other exit
related
costs
 
Total
 
(In millions)
Balance at December 29, 2012
$
41

 
$
17

 
$
58

Charges (reversals), net
(5
)
 
11

 
6

Cash payments
(33
)
 
(21
)
 
(54
)
Balance at December 28, 2013
3

 
7

 
10

Charges (reversals), net
42

 
16

 
58

Cash payments
(19
)
 
(4
)
 
(23
)
Non-cash charges

 
(6
)
 
(6
)
Balance at December 27, 2014
$
26

 
$
13

 
$
39

Summary of Each Major Type of Restructuring Cost
 
2014
 
2013
 
2012
 
(In millions)
Severance and benefits charges (reversals), net
$
42

 
$
(5
)
 
$
95

Contract or program termination charges
6

 

 

Asset impairments
6

 

 
4

Facility consolidation and closure charges
4

 
11

 
1

Total
$
58

 
$
6

 
$
100

Executive Officer Separation
In the fourth quarter of 2014, the Company recorded other special charges of $13 million. The amount primarily includes $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.
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Supplementary Financial Information (Tables)
12 Months Ended
Dec. 27, 2014
Quarterly Financial Data [Abstract]
Supplementary Financial Information
 
(In millions, except per share amounts)
  
2014
 
2013
  
Dec. 27
 
Sep. 27
 
Jun. 28
 
Mar. 29
 
Dec. 28
 
Sep. 28
 
Jun. 29
 
Mar. 30
Net revenue
$
1,239

  
$
1,429

 
$
1,441

 
$
1,397

 
$
1,589

  
$
1,461

 
$
1,161

 
$
1,088

Cost of sales (1)
879

  
935

 
943

 
910

 
1,036

  
940

 
702

 
643

Gross margin
360

  
494

 
498

 
487

 
553

  
521

 
459

 
445

Research and development
238

  
278

 
277

 
279

 
293

  
288

 
308

 
312

Marketing, general and administrative
144

  
150

 
154

 
156

 
169

  
155

 
171

 
179

Amortization of acquired intangible assets
4

  
3

 
4

 
3

 
4

  
5

 
4

 
5

Restructuring and other special charges (gains), net (2)
71

  

 

 

 

 
(22
)
 
5

 
47

Goodwill impairment charge(3)
233

 

 

 

 

 

 

 

Legal settlements (4)

 

 

 

 
(48
)
  

 

 

Operating income (loss)
(330
)
  
63

 
63

 
49

 
135

  
95

 
(29
)
 
(98
)
Interest income
1

  
1

 

 
1

 
1

  
1

 
2

 
1

Interest expense
(41
)
 
(43
)
 
(46
)
 
(47
)
 
(44
)
 
(47
)
 
(42
)
 
(44
)
Other income (expense), net
3

 
(2
)
 
(49
)
 
(21
)
 
(2
)
 
2

 
(2
)
 
(3
)
Income (loss) before income taxes
(367
)
 
19

 
(32
)
 
(18
)
 
90

 
51

 
(71
)
 
(144
)
Provision (benefit) for income taxes
(3
)
 
2

 
4

 
2

 
1

 
3

 
3

 
2

Net income (loss)
$
(364
)
 
$
17

 
$
(36
)
 
$
(20
)
 
$
89

 
$
48

 
$
(74
)
 
$
(146
)
Net income (loss) per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
(0.47
)
 
$
0.02

 
$
(0.05
)
 
$
(0.03
)
 
$
0.12

 
$
0.06

 
$
(0.10
)
 
$
(0.19
)
Diluted
$
(0.47
)
 
$
0.02

 
$
(0.05
)
 
$
(0.03
)
 
$
0.12

 
$
0.06

 
$
(0.10
)
 
$
(0.19
)
Shares used in per share calculation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
776

  
770

 
764

 
761

 
759

  
757

 
752

 
749

Diluted
776

  
785

 
764

 
761

 
766

  
764

 
752

 
749

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Valuation and Qualifying Accounts (Tables)
12 Months Ended
Dec. 27, 2014
Valuation and Qualifying Accounts [Abstract]
Valuation and Qualifying Accounts
 
 
Balance
Beginning
of Period
 
Additions
Charged
(Reductions
Credited)
To Operations
 
Deductions(1)
 
Balance
End of
Period
Allowance for doubtful accounts:
 
 
 
 
 
 
 
 
Years ended:
 
 
 
 
 
 
 
 
December 29, 2012
 
$
2

 
$

 
$

 
$
2

December 28, 2013
 
$
2

 
$
(2
)
 
$

 
$

December 27, 2014
 
$

 
$

 
$

 
$

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Significant Accounting Policies (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Marketing, communications and advertising expenses $ 194 $ 210 $ 287
Equipment | Maximum
Property, plant and equipment, useful life 6 years
Equipment | Minimum
Property, plant and equipment, useful life 2 years
Building and Building Improvements | Maximum
Property, plant and equipment, useful life 40 years
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Significant Accounting Policies (Details) (Deferred Revenue and Related Product Costs) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Deferred Revenue And Related Product Costs [Line Items]
Deferred revenue $ 130 $ 253
Deferred cost of sales (58) (108)
Deferred income on shipments to distributors $ 72 $ 145
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Significant Accounting Policies (Details) (Components of Basic and Diluted Income (loss)) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Numerator—Net income (loss):
Net loss $ (364) $ 17 $ (36) $ (20) $ 89 $ 48 $ (74) $ (146) $ (403) $ (83) $ (1,183)
Denominator—Weighted average shares:
Basic and diluted 768,000,000 754,000,000 741,000,000
Basic
Basic net loss per share $ (0.47) $ 0.02 $ (0.05) $ (0.03) $ 0.12 $ 0.06 $ (0.1) $ (0.19) $ (0.53) $ (0.11) $ (1.6)
Diluted
Diluted net loss per share $ (0.47) $ 0.02 $ (0.05) $ (0.03) $ 0.12 $ 0.06 $ (0.1) $ (0.19) $ (0.53) $ (0.11) $ (1.6)
WCH Warrant [Member]
Diluted
Warrant, exercise date Mar 7, 2014
Warrant, exercised 34,906,166
Warrant, common shares issued from cashless exercise 35,000,000
Warrant, outstanding 0 0
Stock Options, Restricted Stock and Restricted Stock Units
Diluted
Antidilutive securities excluded from computation of earnings per share 48,000,000 59,000,000 45,000,000
5.75% Convertible Senior Notes
Diluted
Antidilutive securities excluded from computation of earnings per share 15,000,000
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Significant Accounting Policies (Details) (Accumulated Other Comprehensive Income) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Unrealized gains (losses) on available-for-sale securities:
Beginning balance $ 1 $ 0
Unrealized gains (losses) arising during the period, net of tax effects 0 (1) 1
Reclassification adjustment for losses realized and included in net loss, net of tax effects 0 2 0
Total other comprehensive income (loss) 0 1 1
Ending balance 1 1 0
Unrealized gains (losses) on cash flow hedges:
Beginning balance (3) (3)
Unrealized gains (losses) arising during the period, net of tax effects (9) (6) 1
Reclassification adjustment for losses realized and included in net loss, net of tax effects 6 6 0
Total other comprehensive income (loss) (3) 0 1
Ending balance (6) (3) (3)
Total:
Beginning balance (2) (3)
Unrealized gains (losses) arising during the period, net of tax effects (9) (7)
Reclassification adjustment for losses realized and included in net loss, net of tax effects 6 8
Total other comprehensive income (loss) (3) 1 2
Ending balance $ (5) $ (2) $ (3)
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GLOBALFOUNDRIES (Details) (Narrative) (USD $)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Dec. 31, 2011
First Amendment to the WSA
Globalfoundries [Line Items]
Date of amendment to the WSA Apr 2, 2011
Second Amendment to the WSA
Globalfoundries [Line Items]
Date of amendment to the WSA Mar 4, 2012
Cash consideration for limited waiver of exclusivity to related party $ 425,000,000
Fair value of stock consideration for limited waiver of exclusivity to related party 278,000,000
Consideration for limited waiver of exclusivity to related party 703,000,000
Third Amendment to the WSA
Globalfoundries [Line Items]
Date of amendment to the WSA Dec 6, 2012
Cash consideration for limited waiver of exclusivity to related party 320,000,000
Cash consideration for limited waiver of exclusivity to related party, paid 200,000,000 40,000,000 80,000,000
Lower of cost or market charge 273,000,000
Fourth Amendment to the WSA
Globalfoundries [Line Items]
Date of amendment to the WSA Mar 30, 2014
Globalfoundries
Globalfoundries [Line Items]
Date of consolidation of GF Mar 2, 2009
Date of deconsolidation of GF Dec 27, 2009
Dilution gain in investee 492,000,000
Investment in GLOBALFOUNDRIES 278,000,000
Impairment related to the GLOBALFOUNDRIES investment 209,000,000
Termination date of the WSA Mar 2, 2024
Purchases from GF related to wafer manufacturing and research and development activities $ 1,000,000,000 $ 1,000,000,000 $ 1,200,000,000
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Sale and Leaseback Transactions (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Sep. 28, 2013
Sale Leaseback Transaction [Line Items]
Net (gain) loss on disposal of property, plant and equipment $ 0 $ (31) $ (1)
Property in Austin Texas
Sale Leaseback Transaction [Line Items]
Net proceeds from sale leaseback transaction 10
Net (gain) loss on disposal of property, plant and equipment 5
Sale Leaseback Transactions
Sale Leaseback Transaction [Line Items]
Net (gain) loss on disposal of property, plant and equipment (24)
Sale Leaseback Transactions | Property in Austin Texas
Sale Leaseback Transaction [Line Items]
Net proceeds from sale leaseback transaction 164
Net (gain) loss on disposal of property, plant and equipment (52)
Lease terms of property sold and leased back The operating lease expires in March 2025 and provides for one 10-year optional renewal.
Sale Leaseback Transactions | Property in Markham Canada
Sale Leaseback Transaction [Line Items]
Net proceeds from sale leaseback transaction 13
Net (gain) loss on disposal of property, plant and equipment 6
Sale Leaseback Transactions | Property in Singapore
Sale Leaseback Transaction [Line Items]
Net proceeds from sale leaseback transaction 46
Net (gain) loss on disposal of property, plant and equipment 17
Deferred gain on sale leaseback transaction $ 14
Lease terms of property sold and leased back The initial operating lease term expires in September 2023 and provides for options to extend the lease for 4 years, at the end of the initial operating lease term, and for an additional 3.5 years thereafter.
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Supplemental Balance Sheet Information (Details) (Inventories) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Raw materials $ 40 $ 30
Work in process 431 727
Finished goods 214 127
Inventories, net $ 685 $ 884
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Supplemental Balance Sheet Information (Details) (Property, Plant And Equipment) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Land and land improvements $ 4 $ 3
Buildings and leasehold improvements 246 246
Equipment 1,416 1,466
Construction in progress 14 18
Property, Plant and Equipment, Gross 1,680 1,733
Accumulated depreciation and amortization (1,378) (1,387)
Property, plant and equipment, net 302 346
Depreciation $ 115 $ 139 $ 179
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Supplemental Balance Sheet Information (Details) (Other Assets) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Software technology and licenses $ 219 $ 280
Other 125 106
Other assets $ 344 $ 386
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Supplemental Balance Sheet Information (Details) (Accrued and Other Current Liabilities) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Accrued compensation and benefits $ 139 $ 186
Marketing programs and advertising expenses 141 150
Software technology and licenses payable 39 27
Other accrued and current liabilities 239 167
Accrued and other current liabilities $ 558 $ 530
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Goodwill and Acquired Intangible Assets (Details) (Schedule of Goodwill) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Goodwill [Line Items]
Initial goodwill $ 2,424 $ 2,424
Accumulated impairment loss (2,104) (1,871) (2,104) (1,871)
Goodwill 320 553 320 553
Goodwill impairment charge 233 0 0 0 0 0 0 0 233 0 0
Computing and Graphics
Goodwill [Line Items]
Initial goodwill 1,359 1,359
Accumulated impairment loss (1,359) (1,126) (1,359) (1,126)
Goodwill 0 233 0 233
Goodwill impairment charge 233 0
Enterprise, Embedded and Semi-Custom
Goodwill [Line Items]
Initial goodwill 320 320
Accumulated impairment loss 0 0 0 0
Goodwill 320 320 320 320
Goodwill impairment charge 0 0
All Other
Goodwill [Line Items]
Initial goodwill 745 745
Accumulated impairment loss (745) (745) (745) (745)
Goodwill 0 0 0 0
Goodwill impairment charge 0 0
SeaMicro Acquisition
Goodwill [Line Items]
Initial goodwill 230 230
SeaMicro Acquisition | Computing and Graphics
Goodwill [Line Items]
Initial goodwill 165 165
SeaMicro Acquisition | Enterprise, Embedded and Semi-Custom
Goodwill [Line Items]
Initial goodwill 65 65
SeaMicro Acquisition | All Other
Goodwill [Line Items]
Initial goodwill 0 0
ATI Acquisition
Goodwill [Line Items]
Initial goodwill 2,194 2,194
ATI Acquisition | Computing and Graphics
Goodwill [Line Items]
Initial goodwill 1,194 1,194
ATI Acquisition | Enterprise, Embedded and Semi-Custom
Goodwill [Line Items]
Initial goodwill 255 255
ATI Acquisition | All Other
Goodwill [Line Items]
Initial goodwill $ 745 $ 745
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Goodwill and Acquired Intangible Assets (Details) (Acquisition-Related Intangible Assets) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross $ 469 $ 469 $ 469 $ 469
Acquired intangible assets, accumulated amortization (404) (391) (404) (391)
Acquired intangible assets, net 65 78 65 78
Weighted-average amortization period 4 years 6 months 23 days
Amortization of acquired intangible assets 4 3 4 3 4 5 4 5 14 18 14
Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross 258 258 258 258
Acquired intangible assets, accumulated amortization (201) (189) (201) (189)
Acquired intangible assets, net 57 69 57 69
Weighted-average amortization period 5 years 1 month 23 days
Amortization of acquired intangible assets 13 13 9
In Process Research and Development
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross 6 6 6 6
Acquired intangible assets, accumulated amortization 0 0 0 0
Acquired intangible assets, net 6 6 6 6
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross 168 168 168 168
Acquired intangible assets, accumulated amortization (167) (166) (167) (166)
Acquired intangible assets, net 1 2 1 2
Weighted-average amortization period 1 year 3 months 0 days
Amortization of acquired intangible assets 1 1 1
Trademark and Trade Name
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross 37 37 37 37
Acquired intangible assets, accumulated amortization (36) (36) (36) (36)
Acquired intangible assets, net 1 1 1 1
Weighted-average amortization period 1 year 3 months 0 days
Amortization of acquired intangible assets $ 0 $ 4 $ 4
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Goodwill and Acquired Intangible Assets (Details) (Estimated Future Amortization Expense) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Estimated Amortization of Acquired Intangible Assets [Line Items]
2015 $ 13
2016 11
2017 11
2018 11
2019 11
2020 and thereafter 2
Total intangible assets subject to amortization 59
In-process research and development 6
Acquired intangible assets, net $ 65 $ 78
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Financial Instruments (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Proceeds from sale of available-for-sale securities $ 0 $ 28
Marketable securities reclassified from LT to ST 45
Realized loss from proceeds from sales of available-for-sale securities 2
Noncurrent marketable securities, at fair value 0 90
Mutual Funds
Restricted investments 16 14
Money Market Funds
Available-for-sale securities pledged as collateral 10 18
Noncurrent marketable securities, at fair value $ 0 $ 2
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Financial Instruments (Details) (Schedule of Available-For-Sale Securities and Fair Value Measurements) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value $ 805 $ 869
Current marketable securities, at fair value 235 228
Noncurrent marketable securities, at fair value 0 90
Cash, cash equivalents and marketable securities, at fair value 1,040 1,187
Fair value, inputs, level 1
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value 4 19
Noncurrent marketable securities, at fair value 0 2
Cash, cash equivalents and marketable securities, at fair value 4 21
Fair value, inputs, level 2
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value 410 421
Current marketable securities, at fair value 235 228
Noncurrent marketable securities, at fair value 0 88
Cash, cash equivalents and marketable securities, at fair value 645 737
Contracts Designated as Cash Flow Hedging Instruments
Schedule of Available-for-sale Securities [Line Items]
Derivative, at fair value (6) (3)
Contracts not Designated as Hedging Instruments
Schedule of Available-for-sale Securities [Line Items]
Derivative, at fair value (1) (1)
Contracts Designated as Fair Value Hedging Instruments
Schedule of Available-for-sale Securities [Line Items]
Derivative, at fair value 3 0
Cash
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value 391 429
Cash, cash equivalents and marketable securities, at fair value 391 429
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value 4 19
Noncurrent marketable securities, at fair value 0 2
Cash, cash equivalents and marketable securities, at fair value 4 21
Available-for-sale securities pledged as collateral 10 18
Money market funds | Fair value, inputs, level 1
Schedule of Available-for-sale Securities [Line Items]
Other assets, at fair value 16 14
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents, at fair value 410 421
Current marketable securities, at fair value 208 178
Cash, cash equivalents and marketable securities, at fair value 618 599
Time deposits
Schedule of Available-for-sale Securities [Line Items]
Current marketable securities, at fair value 50
Cash, cash equivalents and marketable securities, at fair value 50
Corporate bond
Schedule of Available-for-sale Securities [Line Items]
Current marketable securities, at fair value 27 0
Noncurrent marketable securities, at fair value 0 88
Cash, cash equivalents and marketable securities, at fair value 27 88
Mutual funds | Fair value, inputs, level 1
Schedule of Available-for-sale Securities [Line Items]
Other assets, at fair value $ 10 $ 18
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Financial Instruments (Details) (Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments not Recorded at Fair Value) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term debt (excluding capital leases), at carrying amount $ 172 $ 55
Short-term debt (excluding capital leases), at estimated fair value 173 55
Long-term debt (excluding capital leases), at carrying amount 2,025 1,986
Long-term debt (excluding capital leases), at estimated fair value $ 1,858 $ 2,132
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Financial Instruments (Details) (Gain (Loss) from Hedging Transactions) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Research and development $ 238 $ 278 $ 277 $ 279 $ 293 $ 288 $ 308 $ 312 $ 1,072 $ 1,201 $ 1,354
Marketing, general and administrative 144 150 154 156 169 155 171 179 604 674 823
Other income (expense), net 3 (2) (49) (21) (2) 2 (2) (3) (69) (5) 6
Foreign Currency Forward Contracts | Contracts Designated as Cash Flow Hedging Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive income (loss) (3) (3)
Research and development 3 2
Marketing, general and administrative 3 1
Foreign Currency Forward Contracts | Contracts not Designated as Hedging Instruments
Derivative Instruments, Gain (Loss) [Line Items]
Other income (expense), net $ (3) $ (2)
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Financial Instruments (Details) (Summary of Derivative Instruments) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Contracts Designated as Cash Flow Hedging Instruments
Derivative [Line Items]
Derivative contracts, net $ (6) $ (3)
Contracts not Designated as Hedging Instruments
Derivative [Line Items]
Derivative contracts, net (1) (1)
Contracts Designated as Fair Value Hedging Instruments
Derivative [Line Items]
Derivative, notional amount 250
Derivative contracts, net 3 0
Foreign Currency Forward Contracts
Derivative [Line Items]
Derivative, notional amount 298 124
Derivative contracts, net (7)
Foreign Currency Forward Contracts | Contracts Designated as Cash Flow Hedging Instruments
Derivative [Line Items]
Derivative contracts, net (6) (3)
Foreign Currency Forward Contracts | Contracts not Designated as Hedging Instruments
Derivative [Line Items]
Derivative contracts, net (1) (1)
Interest Rate Swap Contracts | Contracts Designated as Fair Value Hedging Instruments
Derivative [Line Items]
Derivative contracts, net $ 3 $ 0
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Concentrations of Credit and Operation Risk (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Concentration Risk [Line Items]
Number of concentrated customers accounted in consolidated accounts receivable 3 3
Foreign currency contracts, liabilities, at fair value $ 7
Top Customer One
Concentration Risk [Line Items]
Percentage of accounts receivable 28.00% 21.00%
Top Customer Two
Concentration Risk [Line Items]
Percentage of accounts receivable 17.00% 18.00%
Top Customer Three
Concentration Risk [Line Items]
Percentage of accounts receivable 15.00% 17.00%
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Income Taxes (Details) (Narrative) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Increase (decrease) in valuation allowance $ 120 $ (26) $ 423
Deferred tax assets related to excess stock option deduction 127 191
Deferred tax assets related to deductible discount for 6.00% Convertible Senior Notes due 2015 10 10
Cumulative undistributed earnings of foreign subsidiaries 349
Cumulative undistributed earnings, additional income taxes 122
Income tax holiday, aggregate dollar amount 2 1 11
Income tax holiday, income tax benefits per share $ 0.01 $ 0.01 $ 0.02
Unrecognized tax benefits that would impact effective tax rate 3 3 2
Unrecognized tax benefits, income tax penalties and interest accrued 0 0 0
Estimated increase (decrease) in unrecognized tax benefits within 12 months $ (7)
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Income Taxes (Details) (Schedule of Provision (Benefit) for Income Taxes) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Current:
U.S. Federal $ (1) $ (2) $ 0
U.S. State and Local 0 0 0
Foreign National and Local 6 10 6
Total 5 8 6
Deferred:
U.S. Federal 0 3 (37)
Foreign National and Local 0 (2) (3)
Total 0 1 (40)
Provision (benefit) for income taxes $ (3) $ 2 $ 4 $ 2 $ 1 $ 3 $ 3 $ 2 $ 5 $ 9 $ (34)
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Income Taxes (Details) (Schedule of Income (Loss) before Income Tax) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Income (Loss) before Taxes, Domestic and Foreign [Line Items]
U.S. $ (621) $ (397) $ (1,242)
Foreign 223 323 25
Income (loss) from continuing operations before income taxes $ (367) $ 19 $ (32) $ (18) $ 90 $ 51 $ (71) $ (144) $ (398) $ (74) $ (1,217)
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Income Taxes (Details) (Schedule of Deferred Tax Assets and Liabilities) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Deferred tax assets:
Net operating loss carryovers $ 1,978 $ 1,701
Deferred distributor income 28 49
Inventory valuation 22 32
Accrued expenses not currently deductible 107 113
Acquired intangibles 248 343
Tax deductible goodwill 295 271
Federal and state tax credit carryovers 391 321
Foreign capitalized research and development costs 41 22
Foreign research and development ITC credits 282 305
Discount of convertible notes 11 65
Other 167 217
Total deferred tax assets 3,570 3,439
Valuation allowance (3,495) (3,375)
Total deferred tax assets, net of valuation allowance 75 64
Deferred tax liabilities:
Acquired intangibles (37) (28)
Other (19) (17)
Total deferred tax liabilities (56) (45)
Deferred tax assets, net
Net deferred tax assets $ 19 $ 19
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Income Taxes (Details) (Schedule of Deferred Tax Assets and Liabilities, Current and Noncurrent) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Deferred Tax Assets and Liabilities, Current and Noncurrent [Line Items]
Current deferred tax assets $ 2 $ 2
Non-current deferred tax assets 33 18
Current deferred tax liabilities (16) (1)
Net deferred tax assets $ 19 $ 19
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Income Taxes (Details) (Summary of Tax Attribute Carryforwards) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
US-net operating loss carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount $ 5,432
Operating loss carryforwards, limitations on use Utilization of $17 million of the Company’s U.S. federal net operating loss carryforwards are subject to annual limitations
US-net operating loss carryovers | State/Provincial
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount 231
US-net operating loss carryovers | From
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Jan 1, 2015
US-net operating loss carryovers | To
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Dec 31, 2034
US-credit carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 403
US-credit carryovers | State/Provincial
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 193
US-credit carryovers | From
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, expiration date Jan 1, 2018
US-credit carryovers | To
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, expiration date Dec 31, 2034
Canada-net operating loss carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount 217
Canada-net operating loss carryovers | State/Provincial
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount 217
Canada-net operating loss carryovers | From
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Jan 1, 2025
Canada-net operating loss carryovers | To
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Dec 31, 2028
Canada-credit carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 357
Canada-credit carryovers | State/Provincial
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 31
Canada-credit carryovers | From
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, expiration date Jan 1, 2021
Canada-credit carryovers | To
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, expiration date Dec 31, 2034
Canada-R&D pools | Federal
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 154
Canada-R&D pools | State/Provincial
Tax Attribute Carryforwards [Line Items]
Tax credit carryforward, amount 154
Barbados-net operating loss carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount 198
Barbados-net operating loss carryovers | From
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Jan 1, 2015
Barbados-net operating loss carryovers | To
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, expiration dates Dec 31, 2017
Other foreign net operating loss carryovers | Federal
Tax Attribute Carryforwards [Line Items]
Operating loss carryforwards, amount $ 5
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Income Taxes (Details) (Schedule of Effective Income Tax Rate Reconciliation) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Schedule of Effective Income Tax Rate Reconciliation [Line Items]
Statutory federal income tax provision (benefit) at 35% rate $ (139) $ (26) $ (426)
State taxes, net of federal benefit 1 1 1
Foreign income at other than U.S. rates 1 15 (13)
US valuation allowance utilized 144 22 406
Credit monetization (2) (3) (2)
Provision (benefit) for income taxes $ (3) $ 2 $ 4 $ 2 $ 1 $ 3 $ 3 $ 2 $ 5 $ 9 $ (34)
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Income Taxes (Details) (Schedule of Gross Unrecognized Tax Benefits) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Schedule of Gross Unrecognized Tax Benefits [Line Items]
Unrecognized tax benefits, beginning $ 52 $ 56 $ 69
Increases for tax positions taken in prior years 1 1 3
Decreases for tax positions taken in prior years 0 (2) (4)
Increases for tax positions taken in the current year 2 4 3
Decreases for settlements with taxing authorities (27) (7) (15)
Unrecognized tax benefits, ending $ 28 $ 52 $ 56
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Debt and Other Obligations (Details) (Narrative) (USD $)
12 Months Ended 9 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Dec. 31, 2011
Dec. 27, 2008
Sep. 27, 2014
Mar. 28, 2009
Debt Instrument [Line Items]
Gain (loss) on debt redemptions $ (61,000,000) $ (1,000,000) $ 0
Long-term debt, gross 2,025,000,000
Letters of credit, outstanding balance 6,000,000
Secured revolving line of credit, outstanding balance 130,000,000 55,000,000
Capital lease obligations 12,000,000 16,000,000
Capital leased assets, gross 23,000,000 23,000,000
Capital leased assets, accumulated depreciation (18,000,000) (16,000,000)
Secured Revolving Line of Credit
Debt Instrument [Line Items]
Secured revolving line of credit, maximum borrowing capacity 500,000,000
Letters of credit, maximum borrowing capacity 75,000,000
Secured revolving line of credit, borrowing base description Borrowings under the Secured Revolving Line of Credit are limited to up to 85% of eligible account receivable minus certain reserves.
Secured revolving line of credit, interest rate description per annum equal to (a) London Interbank Offered Rate (LIBOR) plus an applicable margin ranging from 2.00% to 2.75%, or (b) (i) the greater of (x) the Agent’s prime rate, (y) the federal funds rate as published by the Federal Reserve Bank of New York plus 0.50%, and (z) LIBOR for a one-month period plus 1.00%, plus (ii) an applicable margin ranging from 1.00% to 1.75%.
Secured revolving line of credit, outstanding balance 130,000,000
Secured revolving line of credit, interest rate at period end 4.25%
Secured revolving line of credit, remaining borrowing capacity 364,000,000
6.00% Convertible Senior Notes Due 2015
Debt Instrument [Line Items]
Principal amount, at time of issuance 2,200,000,000
Issuance date Apr 27, 2007
Maturity date May 1, 2015
Extinguishment of Debt, Amount 50,000,000 1,600,000,000
Repayments of debt 53,000,000 1,400,000,000
Gain (loss) on debt redemptions (10,000,000)
Repayments of debt, convertible, allocation to equity component 3,000,000
Carrying amount of equity component 125,000,000 159,000,000 259,000,000
Long-term debt, gross 42,000,000 530,000,000
Debt discount 0 (13,000,000)
Long-term debt, net of discount 42,000,000 517,000,000
Convertible debt, conversion ratio, number of shares 35.6125
Convertible debt, conversion ratio, denomination value 1,000
Convertible debt, conversion price per share $ 28.08
Convertible debt, terms of conversion feature This initial conversion price represents a premium of 100% relative to the last reported sale price of the Company’s common stock on April 23, 2007 (the trading date preceding the date of pricing of the 6.00% Notes) of $14.04 per share.
6.00% Convertible Senior Notes Due 2015 | Repurchase in Open Market
Debt Instrument [Line Items]
Extinguishment of Debt, Amount 64,000,000
Repayments of Debt, including Accrued Interest 69,000,000
Interest Paid 1,000,000
6.00% Convertible Senior Notes Due 2015 | Repurchase Pursuant To Tender Offer
Debt Instrument [Line Items]
Extinguishment of Debt, Amount 423,000,000
Repayments of Debt, including Accrued Interest 460,000,000
Interest Paid 10,000,000
8.125% Senior Notes Due 2017
Debt Instrument [Line Items]
Principal amount, at time of issuance 500,000,000
Issuance date Nov 30, 2009
Extinguishment of Debt, Amount 500,000,000
Repayments of Debt, including Accrued Interest 531,000,000
Gain (loss) on debt redemptions (54,000,000)
Long-term debt, gross 0
Long-term debt, net of discount 0 470,000,000
Interest Paid 8,000,000
6.75% Senior Notes due 2019
Debt Instrument [Line Items]
Principal amount, at time of issuance 600,000,000
Issuance date Feb 26, 2014
Maturity date Mar 1, 2019
Debt Instrument, Redemption Price, Percentage 101.00%
Long-term debt, net of discount 600,000,000
Long-term debt, redemption terms At any time before March 1, 2019, the Company may redeem some or all of the 6.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as set forth in the 6.75% Indenture).
7.75% Senior Notes Due 2020
Debt Instrument [Line Items]
Principal amount, at time of issuance 500,000,000
Issuance date Aug 4, 2010
Maturity date Aug 1, 2020
Extinguishment of Debt, Amount 50,000,000
Repayments of Debt, including Accrued Interest 49,000,000
Gain (loss) on debt redemptions 2,000,000
Long-term debt, net of discount 450,000,000 500,000,000
Long-term debt, redemption terms Prior to August 1, 2015, the Company may redeem some or all of the 7.75% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as defined in the 7.75% Indenture). From August 1, 2015, the Company may redeem the 7.75% Notes at specified redemption prices, plus accrued and unpaid interest.
Percentage of repurchase price over to principal amount 101.00%
Interest Paid 1,000,000
7.50% Senior Notes due 2022
Debt Instrument [Line Items]
Principal amount, at time of issuance 500,000,000
Issuance date Aug 15, 2012
Maturity date Aug 15, 2022
Extinguishment of Debt, Amount 25,000,000
Repayments of Debt, including Accrued Interest 24,000,000
Gain (loss) on debt redemptions 1,000,000
Long-term debt, net of discount 475,000,000 500,000,000
Long-term debt, redemption terms At any time (which may be more than once) before August 15, 2015, the Company can redeem up to 35% of the aggregate principal amount of the 7.50% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price not greater than 107.5% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to August 15, 2022, the Company may redeem some or all of the 7.50% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as defined in the 7.50% Indenture).
Percentage of repurchase price over to principal amount 101.00%
7.00% Senior Notes due 2024
Debt Instrument [Line Items]
Principal amount, at time of issuance 500,000,000
Issuance date Jun 16, 2014
Maturity date Jul 1, 2024
Debt Instrument, Redemption Price, Percentage 101.00%
Long-term debt, net of discount $ 500,000,000
Long-term debt, redemption terms At any time before July 1, 2017, the Company may redeem up to 35% of the aggregate principal amount of the 7.00% Notes within 90 days of the closing of an equity offering with the net proceeds thereof at a redemption price equal to 107.000% of the principal amount thereof, together with accrued and unpaid interest to but excluding the date of redemption. Prior to July 1, 2019, the Company may redeem some or all of the 7.00% Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a “make whole” premium (as set forth in the 7.00% Indenture).
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Debt and Other Obligations (Details) (Summary of Debt and Other Obligations) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Debt Instrument [Line Items]
Secured revolving line of credit, outstanding balance $ 130 $ 55
Capital lease obligations 12 16
Long-term debt and capital lease obligation including current portion 2,212 2,058
Current portion of long-term debt and capital lease obligations 177 60
Long-term debt and capital lease obligations, less current portion 2,035 1,998
6.00% Convertible Senior Notes Due 2015
Debt Instrument [Line Items]
Long-term debt, net of discount 42 517
8.125% Senior Notes Due 2017
Debt Instrument [Line Items]
Long-term debt, net of discount 0 470
7.75% Senior Notes Due 2020
Debt Instrument [Line Items]
Long-term debt, net of discount 450 500
7.50% Senior Notes due 2022
Debt Instrument [Line Items]
Long-term debt, net of discount 475 500
Secured Revolving Line of Credit
Debt Instrument [Line Items]
Secured revolving line of credit, outstanding balance $ 130
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Debt and Other Obligations (Details) (Information related to Interest Rate and Expense) (6.00% Convertible Senior Notes Due 2015, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
6.00% Convertible Senior Notes Due 2015
Debt Instrument [Line Items]
Effective interest rate 8.00% 8.00% 8.00%
Interest cost related to contractual interest coupon $ 9 $ 45 $ 44
Interest cost related to amortization of the discount $ 3 $ 10 $ 9
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Debt and Other Obligations (Details) (Debt Instrument Redemption)
12 Months Ended
Dec. 27, 2014
7.75% Senior Notes Due 2020 | Beginning on August 1, 2015 through July 31, 2016
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 103.88%
7.75% Senior Notes Due 2020 | Beginning on August 1, 2016 through July 31, 2017
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 102.58%
7.75% Senior Notes Due 2020 | Beginning on August 1, 2017 through July 31, 2018
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 101.29%
7.75% Senior Notes Due 2020 | On August 1, 2018 and thereafter
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 100.00%
7.00% Senior Notes due 2024
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 101.00%
7.00% Senior Notes due 2024 | Beginning on July 1, 2019 through June 30, 2020
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 103.50%
7.00% Senior Notes due 2024 | Beginning on July 1, 2020 through June 30, 2021
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 102.33%
7.00% Senior Notes due 2024 | Beginning on July 1, 2021 through June 30, 2022
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 101.17%
7.00% Senior Notes due 2024 | On July 1, 2022 and thereafter
Debt Instrument, Redemption [Line Items]
Debt Instrument, Redemption Price, Percentage 100.00%
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Debt and Other Obligations (Details) (Future Payments on Debt and Other Obligations) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Long-term Debt, Future Payments
Long-term debt (principal only), 2014 $ 0
Long-term debt (principal only), 2015 0
Long-term debt (principal only), 2016 0
Long-term debt (principal only), 2017 0
Long-term debt (principal only), 2018 600
Long-term debt (principal only), 2019 and thereafter 1,425
Long-term debt, gross 2,025
Line of Credit Facility, Future Payments
Line of Credit Facility, Repayments, 2014 172
Line of Credit Facility, Gross 172
Capital Lease Obligations, Future Payments
Capital leases, 2014 5
Capital leases, 2015 6
Capital leases, 2016 1
Capital leases, 2017 0
Capital leases, 2018 0
Capital leases, 2019 and thereafter 0
Capital Leases, total 12
Capital lease obligations $ 12 $ 16
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Other Income (Expense), Net (Details) (Other Income (Expense), Net) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Other Income (Expense), Net [Line Items]
Impairment charge on marketable securities $ 0 $ 0 $ (4)
Net loss on debt redemptions (61) (1) 0
Other (8) (4) 10
Other income (expense), net $ 3 $ (2) $ (49) $ (21) $ (2) $ 2 $ (2) $ (3) $ (69) $ (5) $ 6
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Segment Reporting (Details) (Summary of Operations by Segment) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Segment Reporting Information [Line Items]
Net revenue $ 1,239 $ 1,429 $ 1,441 $ 1,397 $ 1,589 $ 1,461 $ 1,161 $ 1,088 $ 5,506 $ 5,299 $ 5,422
Operating income (loss) (330) 63 63 49 135 95 (29) (98) (155) 103 (1,056)
Interest income 1 1 0 1 1 1 2 1 3 5 8
Interest expense (41) (43) (46) (47) (44) (47) (42) (44) (177) (177) (175)
Other income (expense), net 3 (2) (49) (21) (2) 2 (2) (3) (69) (5) 6
Income (loss) from continuing operations before income taxes (367) 19 (32) (18) 90 51 (71) (144) (398) (74) (1,217)
Computing and Graphics
Segment Reporting Information [Line Items]
Net revenue 3,132 3,720 4,724
Operating income (loss) (76) (101) 129
Enterprise, Embedded and Semi-Custom
Segment Reporting Information [Line Items]
Net revenue 2,374 1,577 698
Operating income (loss) 399 295 18
All Other
Segment Reporting Information [Line Items]
Net revenue 0 2 0
Operating income (loss) $ (478) $ (91) $ (1,203)
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Segment Reporting (Details) (Sales by Country and by Customer) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Segment Reporting Information [Line Items]
Net revenue $ 1,239 $ 1,429 $ 1,441 $ 1,397 $ 1,589 $ 1,461 $ 1,161 $ 1,088 $ 5,506 $ 5,299 $ 5,422
Top Customer One
Segment Reporting Information [Line Items]
Customer accounted for more than 10% of revenue 23.00% 11.00%   
Top Customer Two
Segment Reporting Information [Line Items]
Customer accounted for more than 10% of revenue 13.00% 10.00%
Top Customer Three
Segment Reporting Information [Line Items]
Customer accounted for more than 10% of revenue 13.00% 17.00% 22.00%
United States
Segment Reporting Information [Line Items]
Net revenue 1,030 801 407
Europe
Segment Reporting Information [Line Items]
Net revenue 325 460 469
China
Segment Reporting Information [Line Items]
Net revenue 2,324 2,519 3,131
Singapore
Segment Reporting Information [Line Items]
Net revenue 371 610 856
Japan
Segment Reporting Information [Line Items]
Net revenue 1,324 710 305
Other Countries
Segment Reporting Information [Line Items]
Net revenue $ 132 $ 199 $ 254
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Segment Reporting (Details) (Long-lived Assets by Geographic Area) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Dec. 28, 2013
Segment Reporting Information [Line Items]
Property, plant and equipment, net $ 302 $ 346
United States
Segment Reporting Information [Line Items]
Property, plant and equipment, net 149 153
Malaysia
Segment Reporting Information [Line Items]
Property, plant and equipment, net 57 66
China
Segment Reporting Information [Line Items]
Property, plant and equipment, net 45 46
Singapore
Segment Reporting Information [Line Items]
Property, plant and equipment, net 17 18
Other Countries
Segment Reporting Information [Line Items]
Property, plant and equipment, net $ 34 $ 63
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Stock-Based Incentive Compensation Plans (Details) (Narrative) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Dec. 31, 2011
Number of shares available for future grants 12,300,000
Number of shares reserved for future issuance 79,000,000
Stock Options
Stock options, shares outstanding, weighted average remaining contractual life 3 years 5 months 10 days
Stock options, shares outstanding, aggregate intrinsic value $ 4
Stock options, shares exercisable, aggregate intrinsic value 4
Stock options, shares exercisable, weighted average remaining contractual life 2 years 5 months 12 days
Stock options, shares granted 8,000,000 6,000,000 17,000,000
Stock options, shares granted, weighted average estimated grant date fair value per share $ 1.46 $ 1.52 $ 2.12
Stock options, shares exercised, total intrinsic value 7 5 18
Stock options, total unrecognized compensation expense, net of estimated forfeitures 16
Weighted average remaining contractual term 2 years 1 month 0 days
Stock Options | Unvested, Issued upon SeaMicro Acquisition
Stock options, shares granted 4,792,000
Stock options, shares granted, weighted average estimated grant date fair value per share $ 6.6
Stock Options | Vested, Issued upon SeaMicro Acquisition
Stock options, shares granted 1,652,000
Restricted Stock and Restricted Stock Units
Restricted stock units, shares purchased, weighted average price per share $ 0
Restricted stock units, shares nonvested 43,000,000 40,000,000 25,000,000 24,000,000
Restricted stock units, shares granted 23,000,000 28,000,000 17,000,000
Restricted stock units, shares granted, weighted average grant date fair value $ 3.89 $ 3.81 $ 5.43
Restricted stock units, shares vested, total fair value 60 36 60
Restricted stock units, share-based compensation expense 65 68 77
Restricted stock units, total unrecognized compensation expense, net of estimated forfeitures 98
Weighted average remaining contractual term 1 year 9 months 0 days
Restricted Stock and Restricted Stock Units | Unvested, Issued upon SeaMicro Acquisition
Restricted stock units, shares granted 322,000
Restricted stock units, shares granted, weighted average grant date fair value $ 4.03
Performance-based Restricted Stock Units | Financial Performance and Market-based
Restricted stock units, shares granted 4,108,000 2,450,000
Restricted stock units, shares granted, weighted average grant date fair value $ 3.8 $ 4.07
Performance-based Restricted Stock Units | Market-based
Aggregate estimated grant-date fair value of outstanding options units $ 5.2
Restricted stock units, shares nonvested 1,313,000
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Stock-Based Incentive Compensation Plans (Details) (Weighted Average Valuation Assumptions for Performance-based Awards) (Performance-based Restricted Stock Units, Financial Performance and Market-based)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Performance-based Restricted Stock Units | Financial Performance and Market-based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility 46.88% 57.46%
Risk-free interest rate 0.22% 0.20%
Expected dividends 0.00% 0.00%
Expected life 1 year 3 months 25 days 1 year 5 months 10 days
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Stock-Based Incentive Compensation Plans (Details) (Share-based Compensation, Allocation of Recognized Period Costs) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense $ 81 $ 91 $ 97
Cost of Sales
Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense 3 5 8
Research and Development Expense
Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense 44 48 52
Selling, General and Administrative Expenses
Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense $ 34 $ 38 $ 37
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Stock-Based Incentive Compensation Plans (Details) (Weighted Average Valuation Assumptions for Stock Options) (Stock Options)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Stock Options
Stock Options, Valuation Assumptions [Line Items]
Expected volatility 53.36% 59.03% 56.24%
Risk-free interest rate 1.15% 0.79% 0.52%
Expected dividends 0.00% 0.00% 0.00%
Expected life 3 years 10 months 10 days 3 years 10 months 0 days 3 years 9 months 15 days
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Stock-Based Incentive Compensation Plans (Details) (Stock Option Activities) (Stock Options, USD $)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Stock Options
Number of Options [Roll Forward]
Stock options, shares outstanding at beginning of year 35,000,000 38,000,000 34,000,000
Stock options, shares granted 8,000,000 6,000,000 17,000,000
Stock options, shares cancelled (4,000,000) (6,000,000) (8,000,000)
Stock options, shares exercised (3,000,000) (3,000,000) (5,000,000)
Stock options, shares outstanding at end of year 36,000,000 35,000,000 38,000,000
Stock options, shares exercisable at end of year 23,000,000 22,000,000 22,000,000
Weighted Average Exercise Price [Roll Forward]
Stock options, shares outstanding at beginning of year, weighted average exercise price $ 5.08 $ 5.51 $ 7.36
Stock options, shares granted, weighted average exercise price $ 3.73 $ 3.63 $ 3.41
Stock options, shares cancelled, weighted average exercise price $ 7.64 $ 7.73 $ 11.26
Stock options, shares exercised, weighted average exercise price $ 1.47 $ 1.56 $ 2.71
Stock options, shares outstanding at end of year, weighted average exercise price $ 4.78 $ 5.08 $ 5.51
Stock options, shares exercisable at end of year, weighted average exercise price $ 5.28 $ 5.62 $ 6.14
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Stock-Based Incentive Compensation Plans (Details) (Restricted Stock Units Activities) (USD $)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Restricted Stock and Restricted Stock Units
Number of Restricted Stock and Restricted Stock Units [Roll Forward]
Restricted stock units, shares nonvested at beginning of period 40,000,000 25,000,000 24,000,000
Restricted stock units, shares granted 23,000,000 28,000,000 17,000,000
Restricted stock units, shares forfeited (5,000,000) (3,000,000) (5,000,000)
Restricted stock units, shares vested (15,000,000) (10,000,000) (11,000,000)
Restricted stock units, shares nonvested at end of period 43,000,000 40,000,000 25,000,000
Weighted Average Grant Date Fair Value [Roll Forward]
Restricted stock units, shares nonvested at beginning of period, weighted average grant date fair value $ 4.52 $ 6.41 $ 7.07
Restricted stock units, shares granted, weighted average grant date fair value $ 3.89 $ 3.81 $ 5.43
Restricted stock units, shares forfeited, weighted average grant date fair value $ 4.48 $ 5.76 $ 6.84
Restricted stock units, shares vested, weighted average grant date fair value $ 4.9 $ 6.93 $ 6.05
Restricted stock units, shares nonvested at end of period, weighted average grant date fair value $ 4.05 $ 4.52 $ 6.41
Financial Performance and Market-based
Number of Restricted Stock and Restricted Stock Units [Roll Forward]
Restricted stock units, shares nonvested at beginning of period 5,000,000 2,000,000 0
Restricted stock units, shares granted 5,000,000 3,000,000 2,000,000
Restricted stock units, shares forfeited (1,000,000) 0 0
Restricted stock units, shares vested 0 0 0
Restricted stock units, shares nonvested at end of period 9,000,000 5,000,000 2,000,000
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Other Employee Benefit Plans (Details) (Narrative) (USD $)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Defined Contribution Plan Disclosure [Line Items]
Amount of the Company's contributions to the 401(k) plan $ 18,000,000 $ 19,000,000 $ 22,000,000
Maximum allowed percentage of employee's pre-tax salary contributed to the 401(k) plan 100.00%
Employer matching contribution, percent of match 6.00%
Amount of annual maximum allowed employer matching contributions per employee $ 11,700 $ 11,475 $ 11,250
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Commitments and Guarantees (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Long-term Purchase Commitment [Line Items]
Rent expense $ 59 $ 64 $ 49
Total non-cancelable operating lease commitments 340
Total unconditional purchase commitments 755
Globalfoundries
Long-term Purchase Commitment [Line Items]
Inventory purchase obligations for 2014 80
Wafers and Substrates
Long-term Purchase Commitment [Line Items]
Total unconditional purchase commitments 688
Software and Technology License
Long-term Purchase Commitment [Line Items]
Total unconditional purchase commitments $ 67
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Commitments and Guarantees (Details) (Non-Cancelable Long-Term Operating Lease Obligations) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Future Non-cancelable Operating Lease Commitments [Abstract]
2015 $ 50
2016 46
2017 43
2018 41
2019 27
2020 and thereafter 133
Total non-cancelable operating lease commitments $ 340
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Commitments and Guarantees (Details) (Unconditional Purchase Obligations) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Unconditional Purchase Commitments [Line Items]
2015 $ 542
2016 85
2017 102
2018 26
2019 0
2020 and thereafter 0
Total unconditional purchase commitments $ 755
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Commitments and Guarantees (Details) (Schedule of Changes in Product Warranty Liability) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Changes in Product Warranty Liability [Roll Forward]
Beginning balance $ 17 $ 16
New warranties issued during the period 32 27
Settlements during the period (39) (25)
Changes in liability for pre-existing warranties during the period, including expirations 9 (1)
Ending balance $ 19 $ 17
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Contingencies (Details) (USD $)
In Millions, unless otherwise specified
Dec. 27, 2014
Environmental Exist Cost [Line Items]
Estimated enviromental liability $ 5
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Restructuring (Details) (Narrative) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Dec. 26, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversals), net $ 58 $ 6
Cash payments 23 54
Severance and benefits charges (reversals), net 42 (5) 95
Contract or program termination charges 6 0 0
Asset impairment charges 6 0 4
Facility consolidations and closure charges (reversals), net 4 11 1
2011 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Severance and benefits charges (reversals), net 8
2012 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversals), net 90
Severance and benefits charges (reversals), net 2 (5)
Asset impairment charges 4
Facility consolidations and closure charges (reversals), net 3 11
Reduction of the Company's global workforce 14.00%
2014 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversals), net 57
Severance and benefits charges (reversals), net 44
Contract or program termination charges 6
Asset impairment charges 6
Facility consolidations and closure charges (reversals), net 1
Reduction of the Company's global workforce 6.00%
2014 Restructuring Plan | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversals), net $ 13
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Restructuring (Schedule of Restructuring Activities and Related Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring reserve balance, beginning of period $ 10 $ 58
Restructuring charges (reversals), net 58 6
Cash payments (23) (54)
Non-cash charges (reversals), net (6)
Restructuring reserve balance, end of period 39 10
Severance and Related Benefits
Restructuring Cost and Reserve [Line Items]
Restructuring reserve balance, beginning of period 3 41
Restructuring charges (reversals), net 42 (5)
Cash payments (19) (33)
Non-cash charges (reversals), net 0
Restructuring reserve balance, end of period 26 3
Other Exit Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring reserve balance, beginning of period 7 17
Restructuring charges (reversals), net 16 11
Cash payments (4) (21)
Non-cash charges (reversals), net (6)
Restructuring reserve balance, end of period $ 13 $ 7
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Restructuring (Summary of Each Major Type of Restructuring Cost) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Restructuring Cost and Reserve [Line Items]
Severance and benefits charges (reversals), net $ 42 $ (5) $ 95
Contract or program termination charges 6 0 0
Asset impairment charges 6 0 4
Facility consolidations and closure charges (reversals), net 4 11 1
Restructuring and other special charges, net $ 58 $ 6 $ 100
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Supplementary Financial Information (Details) (Supplementary Financial Information) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Net revenue $ 1,239 $ 1,429 $ 1,441 $ 1,397 $ 1,589 $ 1,461 $ 1,161 $ 1,088 $ 5,506 $ 5,299 $ 5,422
Cost of sales 879 935 943 910 1,036 940 702 643 3,667 3,321 4,187
Gross margin 360 494 498 487 553 521 459 445 1,839 1,978 1,235
Research and development 238 278 277 279 293 288 308 312 1,072 1,201 1,354
Marketing, general and administrative 144 150 154 156 169 155 171 179 604 674 823
Amortization of acquired intangible assets 4 3 4 3 4 5 4 5 14 18 14
Restructuring and other special charges, net 71 0 0 0 0 (22) 5 47 71 30 100
Goodwill impairment charge 233 0 0 0 0 0 0 0 233 0 0
Legal settlements, net 0 0 0 0 (48) 0 0 0 0 (48) 0
Operating income (loss) (330) 63 63 49 135 95 (29) (98) (155) 103 (1,056)
Interest income 1 1 0 1 1 1 2 1 3 5 8
Interest expense (41) (43) (46) (47) (44) (47) (42) (44) (177) (177) (175)
Other income (expense), net 3 (2) (49) (21) (2) 2 (2) (3) (69) (5) 6
Income (loss) from continuing operations before income taxes (367) 19 (32) (18) 90 51 (71) (144) (398) (74) (1,217)
Provision (benefit) for income taxes (3) 2 4 2 1 3 3 2 5 9 (34)
Net income (loss) $ (364) $ 17 $ (36) $ (20) $ 89 $ 48 $ (74) $ (146) $ (403) $ (83) $ (1,183)
Basic net income (loss) per share $ (0.47) $ 0.02 $ (0.05) $ (0.03) $ 0.12 $ 0.06 $ (0.1) $ (0.19) $ (0.53) $ (0.11) $ (1.6)
Diluted net income (loss) per share $ (0.47) $ 0.02 $ (0.05) $ (0.03) $ 0.12 $ 0.06 $ (0.1) $ (0.19) $ (0.53) $ (0.11) $ (1.6)
Shares used in per share calculation
Basic 776 770 764 761 759 757 752 749 768 754 741
Diluted 776 785 764 761 766 764 752 749 768 754 741
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Valuation and Qualifying Accounts (Details) (Valuation and Qualifying Accounts) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation allowances and reserves, balance $ 0 $ 2 $ 2
Valuation allowances and reserves, charged to cost and expense 0 (2) 0
Valuation allowances and reserves, deductions 0 0 0
Valuation allowances and reserves, balance $ 0 $ 0 $ 2
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