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. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Financial Instruments Recorded at Fair Value on a Recurring Basis


	December 30, 2023						December 31, 2022
(In millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents
Money market funds	$	969	$	—	$	969	$	3,017	$	—	$	3,017
Corporate debt securities	—		753		753		—		224		224
U.S. government and agency securities	1,252		—		1,252		—		—		—
Non-U.S. government and agency securities	—		135		135		—		—		—
Time deposits and certificates of deposits	—		205		205		—		158		158
Short-term investments
Corporate debt securities	—		506		506		—		441		441
Time deposits and certificates of deposits	—		9		9		—		—		—
Asset-backed and mortgage-backed securities	—		34		34		—		39		39
U.S. government and agency securities	1,209		28		1,237		466		—		466
Non-U.S. government and agency securities	—		54		54		—		74		74
Other non-current assets
Time deposits and certificates of deposits	—		1		1		—		9		9
Equity investments	—		—		—		8		—		8
Deferred compensation plan investments	133		—		133		90		—		90
Total assets measured at fair value	$	3,563	$	1,725	$	5,288	$	3,581	$	945	$	4,526

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 30, 2023 or December 31, 2022.

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 30, 2023								December 31, 2022
	Cost/ Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Cost/ Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)								(in millions)
Asset-backed and mortgage-backed securities	$	35	$	—	$	(2)	$	33	$	42	$	—	$	(3)	$	39
Corporate debt securities	1,259		—		—		1,259		669		—		(4)		665
Money market funds	969		—		—		969		3,017		—		—		3,017
Time deposits and certificates of deposits	214		—		—		214		159		—		—		159
U.S. government and agency securities	2,487		3		—		2,490		471		—		(5)		466
Non-U.S. government and agency securities	189		—		—		189		74		—		—		74
	$	5,153	$	3	$	(2)	$	5,154	$	4,432	$	—	$	(12)	$	4,420

As of December 30, 2023 and 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 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In millions)				(In millions)
Due within 1 year	$	3,792	$	3,792	$	1,224	$	1,218
Due in 1 year through 5 years	361		364		159		156
Due in 5 years and later	32		30		41		38
	$	4,185	$	4,186	$	1,424	$	1,412

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

As of December 30, 2023 and December 31, 2022, the Company had non-marketable securities in privately-held companies of $155 million and $137 million, respectively.

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 30, 2023				December 31, 2022
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In millions)				(In millions)

Current portion of long-term debt, net	$	751	$	741	$	—	$	—
Long-term debt, net of current portion	$	1,717	$	1,630	$	2,467	$	2,281

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.

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 30, 2023 and December 31, 2022, the notional value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges was $2.4 billion and $1.9 billion, respectively. The fair value of these contracts was recorded as an asset of $6 million as of December 30, 2023 and as a liability of $27 million as of December 31, 2022.

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 30, 2023 and December 31, 2022, the notional value of these outstanding contracts was $568 million and $485 million, respectively. The fair value of these contracts was not material as of December 30, 2023 and December 31, 2022.

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.