Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 29, 2013 |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation |
|
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The Company operates on a 52- to 53-week fiscal year ending on the last Sunday in December. The additional week in a 53-week fiscal year is added to the second quarter to realign the Company’s fiscal quarters more closely to calendar quarters. Fiscal 2013, fiscal 2012 and fiscal 2011 are comprised of 52-week, 53-week and 52-week periods, respectively |
Property, Plant and Equipment, Policy [Policy Text Block] | ' |
Principles of Consolidation |
|
The consolidated financial statements include all the accounts of the Company and those of its wholly owned subsidiaries, and all intercompany accounts and transactions have been eliminated. |
|
On August 8, 2011, the Company entered into a design services and purchase option agreement with a private semiconductor company, which was determined to be a variable interest entity (VIE) of which the Company was the primary beneficiary because the Company had the power to direct the activities of the entity through the arrangements. Consequently, the results of operations and financial condition of the VIE has been included in the consolidated financial statements of the Company effective August 8, 2011. The non-controlling interests attributed to the VIE are presented as separate components of the Company’s Consolidated Statements of Operations and Consolidated Balance Sheet. The VIE’s financial statements are not significant to the Company’s consolidated financial statements for the periods presented. On April 1, 2012, the Company acquired substantially all assets and assumed certain liabilities of the VIE under an asset purchase agreement and the entity ceased to be a VIE as of the acquisition date. |
|
On August 1, 2013, the Company acquired the MCA business of FSL. The consolidated financial statements include the results of operations of the Company, the MCA business commencing as of the acquisition date and all of the Company’s other wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation |
|
The consolidated financial statements include all the accounts of the Company and those of its wholly owned subsidiaries, and all intercompany accounts and transactions have been eliminated. |
|
On August 8, 2011, the Company entered into a design services and purchase option agreement with a private semiconductor company, which was determined to be a variable interest entity (VIE) of which the Company was the primary beneficiary because the Company had the power to direct the activities of the entity through the arrangements. Consequently, the results of operations and financial condition of the VIE has been included in the consolidated financial statements of the Company effective August 8, 2011. The non-controlling interests attributed to the VIE are presented as separate components of the Company’s Consolidated Statements of Operations and Consolidated Balance Sheet. The VIE’s financial statements are not significant to the Company’s consolidated financial statements for the periods presented. On April 1, 2012, the Company acquired substantially all assets and assumed certain liabilities of the VIE under an asset purchase agreement and the entity ceased to be a VIE as of the acquisition date. |
|
On August 1, 2013, the Company acquired the MCA business of FSL. The consolidated financial statements include the results of operations of the Company, the MCA business commencing as of the acquisition date and all of the Company’s other wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates |
|
The preparation of the Company’s consolidated financial statements and disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies and the reported amounts of revenues and expenses during the reporting periods. Estimates are used to account for the fair value of assets acquired and liabilities assumed on acquisition, marketable securities, revenue adjustments, the allowance for doubtful accounts, inventory write-downs, valuation of acquired intangible assets, impairment of long-lived assets, legal contingencies, income taxes, stock-based compensation, the fair value of long-term debt, and product warranties. Actual results may differ from those estimates, and such differences may be material to the Company’s consolidated financial statements |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash Equivalents |
|
Cash equivalents consist of financial instruments that are readily convertible into cash and have remaining maturities of three months or less at the time of purchase |
Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block] | ' |
Allowance for Doubtful Accounts |
|
The Company maintains an allowance for doubtful accounts based on a variety of factors, including the length of time the receivable is past due, historical experience and the financial condition of customers |
Inventory, Policy [Policy Text Block] | ' |
Inventories |
|
Inventories are stated at cost adjusted to approximate the lower of actual cost (first-in, first-out method) or market. The Company writes down inventory based on its estimated forecasted demand and technological obsolescence. These factors are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction and require estimates that may include uncertain elements. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition |
|
The Company recognizes revenue from product sales to original equipment manufacturers (OEMs) when the earnings process is complete, as evidenced by an agreement with the customer, transfer of title, fixed or determinable pricing and when collectability is reasonably assured. The Company records an allowance for estimated customer returns based on historical experience. |
|
The Company sells directly to distributors under terms that provide for rights of return, stock rotation and price protection guarantees. Since the Company is unable to reliably estimate the returns under the stock rotation rights and price protection to its distributors, the Company defers the recognition of revenue and related product costs on these sales as deferred income until distributors submitted point of sales report to us. The Company also sells some of its products to certain distributors under sales arrangements that do not allow for rights of return or price protection on unsold products. The Company recognizes revenue on these sales when the earnings process is complete, as evidenced by an agreement with the customer, transfer of title, fixed or determinable pricing and when collectability is reasonably assured. The related costs of sales were recognized concurrent with revenue recognition. |
|
The Company recognizes revenue net of sales taxes, value-added taxes, and transaction taxes directly imposed by governmental authorities on the Company’s revenue producing transactions with its customers. The Company includes shipping costs related to products shipped to customers in cost of sales. |
|
The Company has previously licensed its patents to other companies and intends to do so in the future. The terms and conditions of license agreements are highly negotiated and can vary significantly. Generally, however, when a license agreement requires the payment of royalties to the Company, fixed payment amounts are recognized on the date they become due. For other agreements, revenue is recognized based on notification of the related sales from the licensees |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' |
Goodwill |
|
Goodwill represents the allocated enterprise value in connection with fresh start accounting and the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired in a business combination. In accordance with the accounting guidance, goodwill amounts are not amortized, but rather are tested for impairment at the reporting unit level at least annually, or more frequently if there are indicators of impairment present. The Company concluded impairment should be evaluated at the single entity-wide (i.e., consolidated Spansion, Inc.) level. Refer to Note 8 for more information |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | ' |
Intangible Assets |
|
Intangible assets other than IPR&D include developed technology, customer relationships, trade names and trademarks, which are amortized on a straight-line basis over periods based on their estimated lives. See Note 8 for further details. If an IPR&D project is completed, the carrying value of the related intangible asset is amortized over the remaining estimated life of the asset beginning in the period in which the project is completed and sales of related product commenced |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' |
Impairment of Long-Lived Assets including Acquisition-Related Intangible Assets |
|
The Company considers quarterly whether indicators of impairment of long-lived assets are present. These indicators may include, but are not limited to, significant decreases in the market value of an asset, significant changes in the extent or manner in which an asset is used or an adverse change in the Company’s overall business climate. If these or other indicators are present, the Company tests for recoverability of the asset group. If the Company determines that the asset group is not recoverable, the Company will recognize an impairment loss based on the excess of the carrying amount of the assets over its fair value. Fair value is determined by discounted future cash flows, appraisals or other methods |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' |
Foreign Currency Translation/Transactions |
|
The functional currency of the Company and its foreign subsidiaries, except for Nihon Spansion Limited (which was incorporated in Japan in May 2010) is the U.S. dollar. Adjustments resulting from re-measuring foreign currency denominated transactions and balances of these subsidiaries, other than Nihon Spansion Limited, into U.S. dollars are included in the Consolidated Statements of Operations. Adjustments resulting from translating the foreign currency financial statements of Nihon Spansion Limited, for which the functional currency is the Japanese yen, into the U.S. dollar reporting currency were included as a separate component of accumulated other comprehensive loss. Gains or losses resulting from transactions denominated in currencies other than the functional currencies of the Company and its subsidiaries are recorded in interest and other income (expense), net |
Research and Development Expense, Policy [Policy Text Block] | ' |
Research and Development Expenses |
|
The Company expenses research and development costs in the period in which such costs are incurred |
Advertising Costs, Policy [Policy Text Block] | ' |
Advertising Expenses |
|
Advertising costs are expensed as incurred and were immaterial for fiscal 2013, 2012 and 2011 |
Earnings Per Share, Policy [Policy Text Block] | ' |
Net Income (Loss) per Share |
|
Basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by using the weighted average number of common shares outstanding during the period, increased to include the number of additional shares of common stock that would have been outstanding if the shares of common stock underlying the Company’s outstanding dilutive stock options, RSUs and other similar equity instruments had been issued. The dilutive effect of outstanding options and RSUs is reflected in diluted net income (loss) per share by application of the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. |
|
On August 26, 2013, Spansion LLC issued $150.0 million of 2% Senior Exchangeable Notes due 2020 (the Notes) in a private placement. The Notes can be settled either by cash or shares of common stock of the Company, or a combination of both at the discretion of the Company. The potential dilution impact of the Notes is computed using the if-converted method. The if-converted method is used for convertible securities that have a potential for sharing in earnings as common stock. Thus, the interest expense less income tax effects applicable to the Notes are not recognized in net income(loss) to determine basic and diluted net income (loss) per share and the weighted–average number of shares is adjusted to reflect the assumed conversion as of the beginning of the year or actual date of issuance if later. |
|
The following table presents the computation of basic and diluted net income (loss) per share: |
|
| | Year Ended | |
| | | | | | | | | |
| | 29-Dec-13 | | | 30-Dec-12 | | | 25-Dec-11 | |
| | (in thousands except for per-share amounts) | |
| | | | | | | | | | | | |
Numerator: | | | | | | | | | | | | |
Net income (loss) | | $ | (78,268 | ) | | $ | 24,887 | | | $ | (55,886 | ) |
Denominator: | | | | | | | | | | | | |
Denominator for basic net income per share, weighted average shares | | | 58,599 | | | | 59,984 | | | | 61,338 | |
Effect of dilutive securities: | | | | | | | | | | | | |
Weighted average diluted options | | | - | | | | 1 | | | | - | |
Weighted average unvested RSU's, key executive RSU's | | | - | | | | 1,036 | | | | - | |
Denominator for diluted net income per share, weighted average shares | | | 58,599 | | | | 61,021 | | | | 61,338 | |
| | | | | | | | | | | | |
Net income (loss) per share: | | | | | | | | | | | | |
Basic net income (loss) per share | | $ | (1.34 | ) | | $ | 0.41 | | | $ | (0.91 | ) |
Diluted net income (loss)per share | | $ | (1.34 | ) | | $ | 0.41 | | | $ | (0.91 | ) |
Potentially dilutive shares excluded from the diluted income per share computation because their effect would have been anti-dilutive | | | | | | | | | | | | |
- RSUs and Options | | | 5,037 | | | | 7,530 | | | | 1,374 | |
- Conversion of Senior Exchangeable Notes | | | 3,714 | | | | - | | | | - | |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes |
|
In determining taxable income for financial statement reporting purposes, the Company makes estimates and judgments. These estimates and judgments are applied in the calculation of specific tax liabilities and in the determination of the recoverability of deferred tax assets, which arise from temporary differences between the recognition of assets and liabilities for tax and financial statement reporting purposes. |
|
The Company assesses the likelihood that it will be able to recover its deferred tax assets. Unless recovery of these deferred tax assets is considered more likely than not, the Company increases its provision for taxes by recording a charge to income tax expense, in the form of a valuation allowance against those deferred tax assets for which the Company does not believe it is more likely than not they will be realized. The Company considers past performance, future expected taxable income and prudent and feasible tax planning strategies in determining the need for a valuation allowance. |
|
In addition, the calculation of the Company’s tax liabilities involves the application of complex tax rules and the potential for future adjustments by the relevant tax jurisdiction. If the Company’s estimates of these taxes are greater or less than actual results, an additional tax benefit or charge will result. |
|
In determining the financial statement effects of an unrecognized tax position, the Company determines when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. In this determination, the Company assumes that the position will be examined by a taxing authority that has full knowledge of all relevant information, and will be resolved in the court of last resort. The more likely than not recognition threshold means that no amount of tax benefits may be recognized for a tax position without a greater than 50% likelihood that it will be sustained upon examination |
Compensation Related Costs, Policy [Policy Text Block] | ' |
Stock-Based Compensation |
|
Stock-based compensation is estimated at the grant date based on the fair value of the stock award and is recognized as expense using the straight-line amortization method over the requisite service period. |
|
The Company estimates the grant date fair value of all options using the Black-Scholes option pricing model, which requires the use of inputs like expected volatility, expected term, expected dividend yield, and expected risk-free rate of return. The Company’s expected volatility is based largely on the historical volatility of its traded stock and to a lesser extent on the volatilities of its competitors with similar characteristics, who are in the same industry sector (guideline companies) because of the lack of sufficient historical realized volatility data on the Company’s stock price. The Company has used the simplified calculation of expected term as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of stock options since emergence from the Chapter 11 bankruptcy. If the Company determines that other methods to estimate expected volatility or expected life were more reasonable, or if other methods for calculating these input assumptions were prescribed by authoritative guidance, the fair value calculated for stock-based awards could change significantly. |
|
For key executive restricted stock units, the expense recognized in interim periods is dependent on the probability of the annual performance measure being achieved. The Company utilizes forecast of future performance to assess this probability and this assessment requires considerable judgment. The expense is trued up at year end when actual annual performance is known. The fair value of the performance-based restricted stock awards (PSUs) is estimated using a Monte Carlo simulation to simulate a range of possible future stock prices for the Company and the other companies in its peer group. The simulation requires assumptions for expected volatilities and correlation coefficients of each entity, risk-free rate of return, and dividend yield. Expected volatilities are based on historical volatilities over a period equal to the length of the measurement period for the Company and the other companies in the peer group. Correlation coefficients are based on the same data used to calculate historical volatilities and are used to model how each entity’s stock price moves in relation each of the other companies included in the peer group. Dividends are assumed to be reinvested in the issuing entity over the measurement period, equating to a zero percent dividend yield for the Company and the other companies in the peer group. The vesting of these PSUs is based on the total shareholder return (TSR) of the Company, relative to its peer group. The peer group is determined by the Company’s Compensation Committee on an annual basis and TSR is measured at the end of each of two 18-month performance periods. |
|
In addition, the Company is required to develop an estimate of the number of share-based awards that will be forfeited due to employee turnover. The guidance on stock compensation requires forfeitures to be 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. The Company estimates forfeitures based on historical experience related to its own stock-based awards granted. The Company anticipates that these estimates will be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates |
Fair Value Measurement, Policy [Policy Text Block] | ' |
Fair Value |
|
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In measuring fair value, the Company uses a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s best estimate of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: |
|
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. |
|
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the asset/liability’s anticipated life. |
|
Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
|
The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. When observable prices are not available, the Company either uses implied pricing from comparable companies or valuation models based on net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those it believes market participants would use in pricing the asset or liability at the measurement date. Please see Note 15 for further details on fair value measurement |
Liability Reserve Estimate, Policy [Policy Text Block] | ' |
Estimates relating to Litigation Reserve |
|
The Company’s litigation reserve policy is to record an estimate for litigation expenses required to defend it over the course of a reasonable period of time. Currently, this is estimated at twelve months in accordance with the accounting guidance. Judgment is necessary to estimate these costs and an accrual is made when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
New Accounting Pronouncements |
|
In July 2013, the Financial Accounting Standards Board (FASB) issued an accounting standard update permitting the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to US Treasury interest rates and the London Interbank Offered Rate (LIBOR). This guidance is effective prospectively for qualifying new or redesignated hedging relationships, entered into on or after July 17, 2013. The adoption of this guidance did not affect the Company’s consolidated financial position, results of operations, or cash flows. |
|
In July 2013, the FASB issued an accounting standard update that resolves the diversity in practice regarding the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The unrecognized tax benefit should be presented as a reduction to a deferred tax asset. This accounting standard update is effective for the first annual period beginning after December 15, 2013. The Company does not expect adoption of this guidance to affect its consolidated financial position, results of operations, or cash flows. |
|
In February 2013, the FASB issued an accounting standard update to provide enhanced disclosures related to reclassifications out of accumulated other comprehensive income (AOCI). An entity will be required to disclose the effect of significant reclassifications out of AOCI on the respective line items in net income if an amount in AOCI is reclassified in its entirety. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of this guidance beginning in the first quarter of fiscal 2013 did not have an impact on the Company’s consolidated financial position, results of operations or cash flows. |
|
In December 2011, the FASB issued an accounting standard update requiring enhanced disclosure related to certain financial instruments and derivative instruments that are offset in the balance sheet or subject to enforceable master netting arrangement or similar arrangement. In January 2013, the FASB clarified the scope of this guidance as being applicable to derivatives, repurchase agreements and securities borrowing and lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirement becomes effective for the Company beginning the first quarter of fiscal year ending December 28, 2014. The adoption of this guidance is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows |