AMD 2009 Annual Report Download - page 132

consumer price index. Total future lease obligations as of December 26, 2009, were approximately $215 million,
of which $32 million was recorded as a liability for certain facilities that were included in the 2002 Restructuring
Plan and the restructuring plans that were initiated in the second and fourth quarters of 2008 (the 2008
Restructuring Plans). (See Note 18). Of the total future non-cancelable lease obligations as of December 26,
2009, GF is responsible for $9 million.
Total non-cancelable purchase commitments as of December 26, 2009 were $1.9 billion for periods through
2020. These purchase commitments include approximately $700 million related to GF’s contractual obligations
for the purchase of energy and gas for its wafer fabrication facilities in Dresden, Germany, and $828 million
representing payments by GF to IBM for the period from September 26, 2009 through 2015 pursuant to its joint
development agreement. As IBM’s services are performed ratably over the life of the agreement, the payments
are expensed as incurred. The IBM agreement and the related payment obligations as well as the commitments to
purchase energy and gas were transferred to GF upon the Closing on March 2, 2009. The remaining purchase
commitments include non-cancelable contractual obligations, including GF contractual obligations, to purchase
raw materials, natural resources and office supplies.
Off-Balance Sheet Arrangements
Guarantees of Indebtedness Not Recorded on the Company’s Consolidated Balance Sheet
AMTC and BAC Guarantees
The Advanced Mask Technology Center GmbH & Co. KG (AMTC) and Maskhouse Building
Administration GmbH & Co. KG (BAC) are joint ventures initially formed for the purpose of constructing and
operating an advanced photomask facility in Dresden, Germany. AMTC provides advanced photomasks for use
in manufacturing the Company’s microprocessors. As of December 26, 2009, the joint venture limited partners
were AMD and Toppan Printing Co., Ltd. Qimonda AG, who had been one of the limited partners in these joint
ventures, was expelled in March 2009 because of its commencement of insolvency proceedings in January 2009.
In December 2002, BAC obtained a euro denominated term loan to finance the construction of the
photomask facility pursuant to which the equivalent of $29 million was outstanding as of December 26, 2009.
Also in December 2002, each of Toppan Photomasks Germany GmbH, and AMTC, as lessees, entered into a
lease agreement with BAC, as lessor. The term of the lease agreement is 10 years from initial occupancy. Each
joint venture partner guaranteed a specific percentage of AMTC’s portion of the rental payments. The rental
payments to BAC are in turn used by BAC to repay amounts outstanding under the BAC term loan. There is no
separate guarantee outstanding for the BAC term loan. With respect to the lease agreement, AMTC may exercise
a “step-in” right in which it would take over Toppan Germany’s remaining rental payments in connection with
the lease agreement between Toppan Photomask Germany and BAC. As of December 26, 2009, the Company’s
guarantee of AMTC’s portion of the rental obligation was approximately $10 million. The Company’s maximum
liability in the event AMTC exercises its “step-in” right and Toppan defaults under the guarantee would be
approximately $47 million. These estimates are based upon forecasted rents to be charged by BAC in the future
and are subject to change based upon the actual usage of the facility by the tenants and foreign currency
exchange rates.
In December 2007, AMTC entered into a euro denominated revolving credit facility, pursuant to which the
equivalent of $50 million was outstanding as of December 26, 2009. The term of the revolving credit facility is
3 years. Upon request by AMTC and subject to certain conditions, the term of the revolving credit facility may be
extended for up to 2 additional years. In June 2009, the AMTC revolving credit facility and related documents
were amended to reflect Qimonda’s expulsion from the joint ventures. Pursuant to the amended guarantee
agreement, each of AMD and Toppan guarantee 50% of AMTC’s outstanding loan balance under the revolving
credit facility. As of December 26, 2009, the Company’s potential obligation under this guarantee was the
equivalent of $25 million plus the Company’s portion of accrued interest and expenses. Under the terms of the
guarantee, if the Company’s group consolidated cash (which is defined as cash, cash equivalents and marketable
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