AMD 2003 Annual Report Download - page 44

Table of Contents
Principal contractual cash obligations that are not recorded on our consolidated balance sheets at December 28, 2003 were:
Total 2004 2005 2006 2007 2008
2009 and
beyond
(In Thousands)
Operating leases $ 466,846 $ 74,288 $ 61,096 $ 47,969 $ 40,340 $ 39,967 $ 203,186
Unconditional purchase commitments 630,136 480,109 98,301 27,239 19,154 2,710 2,623
Total Principal Contractual Cash
Obligations $ 1,096,982 $ 554,397 $ 159,397 $ 75,208 $ 59,494 $ 42,677 $ 205,809
Operating Leases and Unconditional Purchase Commitments
We lease certain of our facilities, including our executive offices in Sunnyvale, California, under lease agreements that expire at various dates through
2018. We lease certain of our manufacturing and office equipment for terms ranging from one to five years. Total future lease obligations as of December 28,
2003, were approximately $467 million, of which $126 million was recorded as a liability for certain facilities that were included in our 2002 Restructuring Plan.
We enter into purchase commitments for manufacturing supplies and services. Total purchase commitments as of December 28, 2003, were approximately
$630 million for periods through 2009. In November 2003, we announced our intention to construct and facilitize a 300-millimeter wafer fabrication facility, Fab
36. Fab 36 will be owned by a newly created partnership named AMD Fab 36 Limited Liability Company & Co. KG, or AMD Fab 36, and will be located in
Dresden, Germany, adjacent to Fab 30. In November 2003, AMD Fab 36 entered into an agreement with a German entity, M+W Zander, pertaining to the design
and construction of the manufacturing facility. As of December 28, 2003, AMD Fab 36 is required to make payments to M+W Zander through May 2005 in an
aggregate amount of approximately $440 million. The amounts payable under the construction agreement are denominated in euro. We used the exchange rate of
0.804 euro to one U.S. dollar as of December 28, 2003 to translate the amounts into U.S. dollars. As of December 28, 2003, our purchase commitments also
included $80 million representing future payments to IBM under our joint development agreement. As IBM’s services are being performed ratably over the life
of the agreement, we expense the payments as incurred. Purchase commitments also included approximately $71 million for software maintenance agreements
that require periodic payments through 2007. As a result, we have not recorded any liabilities relating to these agreements. The remaining $39 million primarily
consists of purchase agreements for raw materials and office supplies.
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004