Advanced Micro Devices, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Financial Instruments

Financial Instruments

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Financial Instruments Recorded at Fair Value on a Recurring Basis


	December 31, 2022						December 25, 2021
(In millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents
Money market funds	$	3,017	$	—	$	3,017	$	4	$	—	$	4
Commercial paper	—		224		224		—		45		45


Time deposits and certificates of deposits	—		159		159		—		—		—
Short-term investments
Commercial paper	—		441		441		—		880		880
Time deposits and certificates of deposits	—		—		—		—		193		193
Asset-backed and mortgage-backed securities	—		39		39		—		—		—
U.S. Treasury and agency securities	466		—		466		—		—		—
Foreign government and agency securities	—		74		74		—		—		—
Other non-current assets
Time deposits and certificates of deposits	—		9		9		—		—		—
Equity investments	8		—		8		66		—		66
Deferred compensation plan investments	90		—		90		72		—		72
Total assets measured at fair value	$	3,581	$	945	$	4,526	$	142	$	1,118	$	1,260

The Company did not have any financial instruments measured at fair value on a recurring basis within Level 3 fair value measurements as of December 31, 2022 or December 25, 2021.

Deferred compensation plan investments are primarily mutual fund investments held in a Rabbi trust established to maintain the Company’s executive deferred compensation plan.

The following is a summary of cash equivalents and short-term investments:


	December 31, 2022
	Cost/ Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)
Asset-backed and mortgage-backed securities	$	42	$	—	$	(3)	$	39
Commercial paper	669		—		(4)		665
Money market funds	3,017		—		—		3,017
Time deposits and certificates of deposits	159		—				159
U.S. Treasury and agency securities	471		—		(5)		466
Foreign government and agency securities	74		—		—		74
	$	4,432	$	—	$	(12)	$	4,420

As of December 31, 2022, the Company did not have material available-for-sale debt securities which had been in a continuous unrealized loss position of more than twelve months.

The contractual maturities of investments classified as available-for-sale are as follows:


	December 31, 2022				December 25, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In millions)				(In millions)
Due within 1 year	$	1,224	$	1,218	$	1,118	$	1,118
Due in 1 year through 5 years	159		156		—		—
Due in 5 years and later	41		38		—		—
	$	1,424	$	1,412	$	1,118	$	1,118

Financial Instruments Not Recorded at Fair Value

The carrying amounts and estimated fair values of the Company’s long-term debt are as follows:


	December 31, 2022				December 25, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In millions)

Current portion of long-term debt, net	$	—	$	—	$	312	$	326
Long-term debt, net of current portion	2,467		2,281		1		15

The estimated fair value of the Company’s long-term debt is based on Level 2 inputs of quoted prices for the Company’s debt and comparable instruments in inactive markets.

The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing terms.

Financial Instruments Measured at Fair Value on a Non-Recurring Basis

As of December 31, 2022, the Company had non-marketable securities in privately-held companies of $137 million. The balance of non-marketable securities in privately-held companies as of December 25, 2021 was not material.

Hedging Transactions and Derivative Financial Instruments

Foreign Currency Forward Contracts Designated as Accounting Hedges

The Company enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate risk related to future forecasted transactions denominated in currencies other than the U.S. Dollar. These contracts generally mature within 24 months and are designated as accounting hedges. As of December 31, 2022 and December 25, 2021, the notional value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges was $1.9 billion and $894 million, respectively. The fair value of these contracts, recorded as a liability, was $27 million as of December 31, 2022. The fair value of these contracts as of December 25, 2021 was not material.

Foreign Currency Forward Contracts Not Designated as Accounting Hedges

The Company also enters into foreign currency forward contracts to reduce the short-term effects of foreign currency fluctuations on certain receivables or payables denominated in currencies other than the U.S. Dollar. These forward contracts generally mature within 3 months and are not designated as accounting hedges. As of December 31, 2022 and December 25, 2021, the notional value of these outstanding contracts was $485 million and $291 million, respectively. The fair value of these contracts was not material as of December 31, 2022 and December 25, 2021.

The cash flows associated with derivative instruments as cash flow hedging instruments are classified in the same category in the Consolidated Statement of Cash Flows as the cash flows of the related items.

Summary of Investment Holdings, Schedule of Investments

The following is a summary of cash equivalents and short-term investments:


	December 31, 2022
	Cost/ Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)
Asset-backed and mortgage-backed securities	$	42	$	—	$	(3)	$	39
Commercial paper	669		—		(4)		665
Money market funds	3,017		—		—		3,017
Time deposits and certificates of deposits	159		—				159
U.S. Treasury and agency securities	471		—		(5)		466
Foreign government and agency securities	74		—		—		74
	$	4,432	$	—	$	(12)	$	4,420