What changed in Advanced Micro Devices's 10-K for the fiscal year ended December 27, 2025

Evolving U.S. government policy toward semiconductor exports, particularly in the context of national security and foreign policy priorities could adversely affect our business. In October 2023, the Bureau of Industry and Security (BIS) of the United States Department of Commerce issued requirements for the export of certain advanced computing items to a party headquartered in, or with an ultimate parent headquartered in, any of Country Groups D1, D4 or D5, including China (a D5 Country). These controls prevent us from shipping certain AMD Instinct™ integrated circuits and certain AMD Versal™ FPGAs to China, or to customers outside of the United States who are headquartered in-or whose ultimate parent is headquartered in-a D5 Country, without a license. BIS may not timely update performance-based licensing thresholds in the 2023 export requirements and/or may issue new licensing requirements and regulatory controls in the future. Accordingly, there is a risk that new products which exceed current licensing thresholds, or even those below current licensing thresholds, may not succeed because BIS could determine they are subject to licensing requirements. U.S. export restrictions on semiconductors and semiconductor technology to China and Chinese customers negatively impact our ability to sell to customers in China and make it easier for our China-based competitors to develop and sell their own solutions and reduce the need for our products. In April 2025, the U.S. government implemented a new license requirement for the export of certain semiconductor products to a D5 Country, and to companies headquartered in, or with an ultimate parent located in such D5 Country. This restriction impacts our AMD Instinct™ MI308 products. [added] As a result of the restriction, we incurred approximately $800 million in inventory and related charges in the second quarter of 2025. We applied for and were granted some licenses by the U.S. government that allow us to ship our MI308 products to certain China-based customers. During the fourth quarter of fiscal year 2025, we began shipping products and reversed approximately $360 million of the charges recorded earlier in the year. Sales of our MI308 products into China depend on customer demand, China's import control rules and our ability to obtain licenses. In August 2025, U.S. government officials expressed an expectation that the U.S. government will receive 15% of the revenue generated from licensed MI308 sales to China. However, to date, the U.S. government has not published a regulation establishing such requirement. Any request for a percentage of the revenue by the U.S. government could subject us to litigation, increase our costs and harm our competitive position and benefit competitors that are not subject to such arrangements.

[added] • We may be required to satisfy financial obligations under guarantees and other commercial commitments.

[added] The implementation or increase of any tariffs, trade protection measures or restrictions, or retaliatory actions from foreign governments could result in lost sales and adversely impact our reputation and business. The U.S. government has instituted or proposed changes in trade policies that include higher tariffs on imports into the U.S. and other government regulations affecting trade between the United States and other countries where we conduct our business. Such changes to U.S. trade policy have the potential to adversely impact the U.S. economy or sectors thereof and could significantly impact our business, in particular the import of products used in our business that are manufactured outside the U.S. Any retaliatory actions by affected countries and foreign governments could result in tariffs, trade protection measures or other restrictions imposed on our current and future products. Our customers' costs of doing business may increase or their sales may be negatively affected. As such, customer demand for our products may decline, which could adversely impact our ability to generate revenue and result in inventory impairment changes. For instance, tariffs on hardware required for data centers could raise costs for our customers, potentially causing them to delay or cancel AI infrastructure investments. Further, to the extent that the United States, China or other countries seek to promote products that are produced domestically or reduce their dependence on products from another country, they may implement regulations or policies that may negatively affect our business.

[added] In January 2025, BIS issued a final rule, commonly referred to as the "AI Diffusion Rule," that would have imposed new restrictions on the export, reexport and in-country transfer of certain advanced semiconductor devices and technology. In May 2025, BIS announced its intention to rescind the AI Diffusion Rule, publish a regulation formalizing the rescission, and issue replacement rules in the future. The replacement rules may limit our ability to engage in certain business transactions, require new export licenses, delay shipments, or necessitate changes in our compliance processes and product designs to ensure regulatory compliance. Additionally, BIS's announced plans introduce uncertainty as we evaluate whether specific products, technologies, or software fall within the scope of any new restrictions, and whether BIS will grant licenses in a timely matter or at all. Compliance with the planned or existing rules could result in increased costs, disruption of key customer and supplier relationships, loss of competitive positioning in international markets or reputational harm.

[added] In October 2025, we entered into a product purchase agreement with OpenAI OpCo, LLC, (OpenAI) to deploy 6 gigawatts of AMD GPUs, with the deployment of the first gigawatt of capacity powered by our AMD Instinct MI450 series products. Concurrent with the agreement, we issued to OpenAI a warrant to purchase up to an aggregate of 160 million shares of AMD's common stock at an exercise price of $0.01 per share. The warrant shares will vest in tranches based on certain AMD Instinct GPU purchase milestones by OpenAI, or its affiliates, or indirectly through third parties, and achievement of specified AMD stock price targets and stock performance. Each vested tranche is further subject to the fulfillment of certain other technical and commercial conditions prior to exercise. Subject to certain conditions, the warrant is exercisable through October 5, 2030. None of the warrant shares met the vesting or exercise conditions and the warrant had no impact to our financial statements for the year ended December 27, 2025.

[added] During the second quarter of fiscal year 2025, the Company recorded approximately $800 million of inventory and related charges on AMD Instinct MI308 Data Center GPU products due to new U.S. export restrictions on certain semiconductors to China. We applied for and were granted some licenses by the U.S. government that allow us to ship MI308 products to certain China-based customers. During the fourth quarter of fiscal year 2025, we began shipping products and reversed approximately $360 million of the inventory and related charges recorded earlier in the year. U.S. government officials have expressed an expectation that the U.S. government will receive 15% of the revenue generated from licensed MI308 sales to China; however, to date, the U.S. government has not published a regulation establishing such requirement.

[added] In October 2025, upon completion of the sale of the ZT Manufacturing Business to Sanmina Corporation (Sanmina), we received a total of $1.4 billion in cash, net of cash divested, and 1.2 million shares of Sanmina common stock valued at $154 million. We are eligible to receive additional cash consideration of up to $450 million to the extent certain conditions are met following the close of the sale through 2028 (Sanmina Earn-out).

[added] In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. For fiscal year 2025, the primary impact of the OBBBA to our tax provision was the accelerated expensing of domestic R&D activities which decreased our income eligible for FDII, reduced our deferred tax assets, and reduced our current income tax liability. Other OBBBA changes did not have a material impact on the financial statements.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

No corresponding language in the FY2025 10-K.

We typically sell our products pursuant to individual purchase orders. We generally do not have long-term supply arrangements with our customers or minimum purchase requirements except that orders generally must be for standard pack quantities. Generally, our customers may cancel orders for standard products more than 30 days prior to shipment without incurring significant fees. We base our inventory levels in part on customers' estimates of demand for their products, which may not accurately predict the quantity or type of our products that our customers will want in the future or ultimately end up purchasing. Our ability to forecast demand is further complicated when our products are sold indirectly through downstream channel distributors and customers, as our forecasts for demand are then based on estimates provided by multiple parties throughout the downstream channel. To the extent we fail to forecast demand and product mix accurately or are unable to increase production or secure sufficient capacity and there is a mismatch between supply and demand for our products, it could limit our ability to meet customer demand and have a material adverse effect on our business. Many of our markets are characterized by short product lifecycles, which can lead to rapid obsolescence and price erosion. As product complexity has increased, manufacturing lead times have extended and longer production cycles, combined with short product cycles, increase the risk that customer demand for products may change between wafer order and finished good availability, which could result in significant mismatches between supply and demand. In addition, our customers may change their inventory practices on short notice for any reason. We may build inventories during periods of anticipated growth, and the cancellation or deferral of product orders or overproduction due to failure of anticipated orders to materialize could result in excess or obsolete inventory, which could result in write-downs of inventory and an adverse effect on gross margins. Our customers may also experience a shortage of, or delay in receiving certain components to build their products, which in turn may affect the demand for or the timing of our products.[added] In April 2025, the U.S. government implemented a new license requirement for the export of certain semiconductor products to China (including Hong Kong and Macau) and D5 countries, or to companies headquartered in or with an ultimate parent located in such countries. This restriction impacts our AMD Instinct™ MI308 products. As a result of the restriction, we incurred approximately $800 million in inventory and related charges in the second quarter of 2025. We applied for and were granted some licenses by the U.S. government that allow us to ship our MI308 products to certain China-based customers. Sales of our MI308 products into China depend on customer demand, China's import control rules and our ability to obtain licenses. As such, our revenues and results of operation could be negatively affected.

[added] Additional export restrictions imposed in the future may not only impact our ability to serve China but could also impact our ability to serve other markets. If any new export controls impact more of our products, we may be unable to sell our inventory of such products and we may further incur inventory and related charges since there is no assurance that the U.S. government will grant licenses at all or in a timely manner. Even if we are granted licenses, the licenses may be temporary or could impose onerous conditions for us or our customers. If we are not granted licenses, we may be unable to develop a competitive product for the China market that is not subject to licensing requirements. Limits on sales of our offerings in the China market due to export controls could impact our competitive position compared to domestic Chinese competitors and other companies or competitors not subject to the same restrictions. As such, we could lose market position and our business, operating results, and financial condition would be adversely impacted.

[added] Our competitors may use their market position and financial resources to market and price their products in a way to dissuade customers from purchasing from us. For example, Intel Corporation (Intel) uses its microprocessor market position to price its products [added] aggressively and target our customers and channel partners with special incentives. These aggressive activities have reduced and may reduce our unit sales and average selling prices for many of our products, adversely affecting our business. Similarly, Nvidia Corporation (Nvidia) leverages its market position in data center GPU, financial resources, and proprietary software ecosystem to promote its systems and influences customers who do business with us. [added] Our competitors' business practices, including allocation [added] strategies, pricing actions, product mix and introduction [added] schedules, licensing terms, marketing arrangements, product bundling [added] strategies, lack of software inoperability and business acquisitions can limit customers' ability to choose [added] alternative products, including [added] ours. This may limit our market share and decrease our margins and profitability, which [added] may have a material adverse effect on our business.

[added] As of December 27, 2025, our aggregate principal debt was $3.3 billion, with short-term and long-term debt obligations of $874 million and $2.3 billion, respectively.

Net cash used in investing activities [added] of continuing operations was $6.9 billion in [added] 2025, which primarily consisted of [added] $5.5 billion of cash used for purchases of short-term [added] investments, $1.8 billion of cash used in acquisitions, net of cash acquired [added] and $1.0 billion for purchases of property and equipment, partially offset by [added] $1.8 billion proceeds from maturities of short-term [added] investments. Net cash provided by investing activities of discontinued operations in 2025 was $1.3 billion, primarily from the sale of [added] the ZT Manufacturing Business.

[added] In March 2025, we completed the acquisition of ZT Systems for $3.2 billion in cash and 8.3 million shares of our common stock. We retained select intellectual property and employees associated with the design operations (ZT Design Business), and in October 2025, we sold the ZT data center infrastructure manufacturing business (ZT Manufacturing Business) to Sanmina Corporation (Sanmina) for $2.4 billion in cash, subject to certain purchase price adjustments, and 1.2 million shares of Sanmina common stock. We are eligible to receive additional contingent cash consideration of up to $450 million from Sanmina to the extent certain conditions are met. Sanmina will also be our preferred partner for manufacturing capabilities in building complex AI solutions. Following the close of the sale of the ZT Manufacturing Business to Sanmina, we retained certain intellectual property and former employees of ZT Systems (ZT Design Business) and settled the contingent consideration liability with the former ZT shareholders and warrant holders.

Gross [added] margin of 50% increased by 1% compared to [added] 49% in 2024, primarily due to [added] product mix, partially offset by [added] approximately $440 million of net inventory and related charges associated with the U.S. government export control on AMD Instinct™ MI308 Data Center GPU products.

We recorded an income tax [added] benefit of $103 million and an income tax [added] provision of $381 million in [added] 2025 and 2024, respectively, representing effective tax rates of [added] (2.5%) and 19%, respectively. The [added] decrease in income tax provision in [added] 2025 was primarily [added] driven by an $853 million benefit related to the release of uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses approved by the Internal Revenue Service (IRS) in April 2025, whereas the income tax provision in 2024 included $373 million tax effect from an intercompany integration transaction.

We believe our cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and commercial paper program will be sufficient to fund operations, including capital expenditures, purchase [added] and lease commitments, and [added] strategic activities over the next 12 months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all.

Interest expense of [added] $131 million in [added] 2025 increased by $39 million compared to [added] $92 million in [added] 2024, primarily due to [added] the issuance of $1.5 billion in aggregate principal amount of 4.212% Notes and 4.319% Notes in March 2025.

Gaming net revenue of [added] $3.9 billion in [added] 2025 increased by 51%, compared to net revenue of [added] $2.6 billion in [added] 2024. The increase was primarily driven by higher semi-custom revenue and strong demand of our Radeon™ gaming GPUs.

During [added] 2025, we launched multiple leadership products and made significant progress executing our AI strategy. [added] A priority in 2025 was accelerating growth in [added] the Data Center segment. [added] Demand for our [added] data center AI GPU products was [added] strong as large hyperscale [added] customers, OEMs and ODMs deployed our AMD Instinct [added] MI350X Series GPUs. We advanced our AMD AI GPU roadmap to deliver an annual cadence of leadership [added] for AMD Instinct solutions, beginning with the AMD Instinct MI350 Series GPUs in 2025. Beyond GPUs, we launched [added] the 5th Gen AMD [added] EPYC family of server processors in 2025, which deliver leadership performance and capabilities for a wide range of data center workloads, including AI. We also expanded the data center portfolio with new networking solutions, including the AMD Pensando™ "Pollara" 400 AI NICs and "Vulcano" AI NICs, which deliver high-speed connectivity across GPU clusters providing high-performance, AI-ready, flexible solutions for scale-out networking. In addition, we previewed our Helios AI rack-scale platform solution that incorporates all of our data center products (CPUs, GPUs and Networking) to address the growing AI compute requirements.

[added] In March and October 2025, we paid a total of $2.0 billion in [added] cash, net of cash acquired, and issued 9.1 million shares of [added] our common stock in the [added] acquisition of ZT Systems.

Certain state and foreign valuation allowances are maintained due to a lack of sufficient sources of future taxable income.

Gross margin [added] of 50% increased by 1% compared to [added] 49% in 2024, primarily due to product mix partially offset by approximately $440 million of net inventory and related charges associated with the U.S. government export control on AMD Instinct™ MI308 Data Center GPU products.

[added] Across Client and Gaming, we continued to strengthen our leadership with expanding enterprise adoption and a growing portfolio of AMD Ryzen processors. For gamers, creators and developers, we brought to market AMD Radeon 9000 Series GPUs and Radeon AI PRO 9700 GPUs based on the AMD RDNA 4 graphics architecture to market along new high-performance Ryzen Threadripper™ 9000 Series processors. Our x86 Embedded portfolio continued to expand in 2025 with the introduction of three new AMD EPYC embedded processor series: AMD EPYC Embedded 9005 Series, EPYC Embedded 4005 Series and EPYC Embedded 2005 Series.

Goodwill. Goodwill is the excess of the aggregate of the consideration transferred over the identifiable assets acquired and liabilities assumed in connection with business combinations. Our reporting units are at the operating segment level. Our goodwill is contained within [added] three reporting units: Data Center, [added] Client and Gaming, and Embedded.[added] We perform our 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 a more frequent basis. The analysis may include both qualitative and quantitative factors to assess the likelihood of an impairment, which occurs when the carrying value of a reporting unit exceeds its fair value. Significant judgment is required in estimating the fair value of our reporting units to determine if the fair values of those units exceed their carrying values. We may obtain the assistance of third-party valuation specialists to help in determining the fair value of our reporting units. Changes in operating plans or adverse changes in the business or in the macroeconomic environment in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of our reporting units' goodwill. Based on our annual qualitative impairment test, we concluded that it is not more likely than not that the carrying value of each reporting unit exceeded its fair value.

Other income (expense), net [added] of $577 million in [added] 2025 increased by $396 million compared to $181 million in 2024, primarily due to [added] higher unrealized gains from long-term investments compared to the prior year.

[added] Client and Gaming operating income was [added] $2.9 billion in 2025, compared to operating income of [added] $1.2 billion in 2024. The increase in operating income was primarily driven by [added] higher revenue, partially offset by higher cost of sales and operating expenses.

As of December [added] 27, 2025, we did not have any off-balance sheet [added] arrangements that have had, or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.

Net cash provided by operating activities [added] of continuing operations was $6.5 billion in [added] 2025, primarily due to our net income of [added] $4.3 billion in 2025, adjusted for non-cash adjustments of [added] $4.6 billion and net cash outflows of [added] $2.4 billion from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a [added] $2.2 billion increase in [added] inventory primarily to support the continued ramp of Data Center products in advanced process technology nodes. Net cash provided by operating activities of the ZT Manufacturing Business, classified as discontinued operations, was $1.2 billion.

To execute our AI strategy, we brought [added] in multiple AI teams across AMD to drive development of a comprehensive software ecosystem spanning our full product portfolio. We [added] delivered key optimizations and [added] expanded framework and library support in the latest [added] version of AMD ROCm™ [added] software, improving performance for generative AI [added] workloads and simplifying the developer experience across training and inference.

Net cash used in financing activities [added] of continuing operations was $431 million in 2025, which primarily consisted of [added] $1.3 billion of common stock repurchases under the Repurchase Program and [added] $607 million of stock repurchases for tax withholding on employee equity [added] plans, partially offset by $1.5 billion of net cash received from issuance of debt, net of repayments, and $285 million of proceeds from the issuance of common stock under our employee equity [added] plans. There was no net cash provided by financing activities of discontinued operations for the year ended December 27, 2025.

Embedded net revenue of [added] $3.5 billion in [added] 2025 decreased by [added] 3%, compared to net revenue of [added] $3.6 billion in [added] 2024. Net revenue decreased as certain end market demand remained mixed.

As of December [added] 27, 2025, our cash, cash equivalents and short-term investments were [added] $10.6 billion compared to [added] $5.1 billion as of December [added] 28, 2024.

Data Center operating income was [added] $3.6 billion in [added] 2025, compared to operating income of [added] $3.5 billion in [added] 2024. The increase in operating income was primarily due to higher revenue, partially offset by higher [added] cost of sales, approximately $440 million of net inventory and related charges associated with the U.S. government export control on AMD Instinct™ MI308 Data Center GPU products and higher operating expenses.

[added] In 2025, we returned a total of [added] $1.3 billion to shareholders through the repurchase of [added] 12.4 million shares of common stock under our stock repurchase program. As of December [added] 27, 2025, $9.4 billion remained available for future stock repurchases under this program. The stock repurchase program does not obligate us to acquire any common stock, has no termination date and may be suspended or discontinued at any time.

As of December [added] 27, 2025, we had unconditional commitments of approximately [added] $12.2 billion, of which [added] $8.5 billion are in fiscal year [added] 2026. Our contractual obligations and purchase commitments relate primarily to our obligations to purchase wafers and substrates from third parties and future payments related to [added] multi-year cloud service provider arrangements, and certain software and technology licenses. We work continually with our suppliers on the timing of payments and deliveries of purchase commitments, taking into account business conditions. [added] We also have commitments for leases that have commenced for approximately $940 million and leases that have not yet commenced for $1.3 billion. See Note [added] 12 - Commitments and [added] Contingencies for contractual obligations and purchase commitments and Note 10 - Leases for lease obligations.

Cash, cash equivalents and short-term investments as of December [added] 27, 2025 were $10.6 billion, compared to [added] $5.1 billion at the end of [added] 2024. Our aggregate principal amount of total debt as of December [added] 27, 2025 was $3.3 billion, compared to [added] $1.8 billion as of December [added] 28, 2024.

Amortization of acquisition-related intangibles of [added] $2.3 billion for [added] 2025 decreased by [added] $140 million, or [added] 6%, compared to [added] $2.4 billion in [added] 2024, primarily due to [added] a lower balance of amortizable acquisition-related intangibles compared to the prior year.

In [added] 2025, we delivered strong annual revenue growth with net revenue increasing [added] 34% to $34.6 billion, compared to [added] $25.8 billion in [added] 2024. This growth was driven by the performance of our Data Center and Client [added] and Gaming segments. Data Center net revenue of [added] $16.6 billion increased by [added] 32% compared to [added] $12.6 billion in [added] 2024, primarily driven by [added] strong demand for our 5th generation AMD EPYC™ processors and AMD [added] Instinct™ MI350 Series GPUs. Client and Gaming segment net revenue of [added] $14.6 billion in [added] 2025 increased by [added] 51% compared to [added] $9.6 billion in [added] 2024, primarily driven by strong demand for our AMD Ryzen™ [added] processors, semi-custom game consoles SoCs and Radeon™ gaming GPUs. The increase in annual net revenue was partially offset by a decrease in net revenue in our [added] Embedded segment. Embedded net revenue of [added] $3.5 billion decreased by [added] 3% compared to net revenue of $3.6 billion [added] in 2024, as certain end market demand remained mixed.

Other income (expense), net is primarily comprised of interest income from short-term investments, changes in valuation of [added] long-term investments and foreign currency transaction gains and losses.

We also have a commercial paper program to issue unsecured commercial paper notes up to a maximum principal amount outstanding, at any time, of $3.0 billion, with a maturity of up to 397 days from the date of issue. We [added] had no commercial paper [added] outstanding as of December 27, 2025.

The OECD is continuing discussions surrounding fundamental changes in allocation of profits among tax jurisdictions in which companies do business, as well as the implementation of a global minimum tax (namely the "Pillar One" and "Pillar Two" proposals). The Council of the European Union has adopted the global corporate 15% minimum tax as provided for in Pillar Two and has directed EU member states to implement legislation enacting Pillar Two. Many countries, including non-EU member states, have implemented laws based on Pillar Two proposals, with effective dates that started in 2024. Although many countries have already introduced Pillar Two legislation applicable to us effective in 2024, certain jurisdictions in which we operate have not adopted corresponding legislation to date. For [added] 2024 and 2025, the impact to us associated with Pillar Two was immaterial.

Our discussion and analysis of our financial condition and results of operations are based upon our [added] Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our Consolidated Financial Statements. We evaluate our estimates on an on-going basis, including those related to our revenue, inventories, [added] business combinations, goodwill, long-lived and intangible assets, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management's expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.

Inventory Valuation. We value inventory at standard cost, adjusted to approximate the lower of actual cost or estimated net realizable value using assumptions about future demand and market conditions. Material assumptions we use to estimate necessary inventory carrying value adjustments can be unique to each product and are based on specific facts and circumstances. In determining excess or obsolescence reserves for products, we consider assumptions such as changes in business and economic conditions, other-than-temporary decreases in demand for our products, and changes in technology or customer requirements. In determining the lower of cost or net realizable value reserves, we consider assumptions such as recent historical sales activity and selling prices, as well as estimates of future selling prices. If in any period we anticipate a change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs may be required and would be reflected in cost of sales, resulting in a negative impact to our gross margin in that period. If in any period we are able to sell inventories that had been written down to a level below the ultimate realized selling price in a previous period, related revenue would be recorded with a lower or no offsetting charge to cost of sales resulting in a net benefit to our gross margin in that period.

Revenue Allowances. Revenue contracts with our customers include variable amounts which we evaluate under ASC 606-10-32-8 through 14 in order to determine the net amount of consideration to which we are entitled and which we recognize as revenue. We determine the net amount of consideration to which we are entitled by estimating the most likely amount of consideration we expect to receive from the customer after adjustments to the contract price for rights of return and rebates to our original equipment [added] manufacturer (OEM) and original design manufacturer (ODM) customers and rights of return, rebates and price protection on unsold merchandise to our distributor customers.