AMD 2009 Annual Report Download - page 134

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The restructuring charges recorded in conjunction with the plan initiated during the second quarter of 2008
primarily represented severance and costs related to the continuation of certain employee benefits and costs to
terminate a contract. This plan was completed during the third quarter of 2009.
The restructuring charges recorded in conjunction with the plan initiated during the fourth quarter of 2008
primarily represented severance and costs related to the continuation of certain employee benefits, contract or
program termination costs, asset impairments and exit costs for facility consolidations and closures. The
remaining liability for this plan is related to lease obligations that will be paid through 2012. The Company
anticipates cash payments related to this liability to be $19 million in 2010, $2 million in 2011 and $2 million in
2012. The Company expects this plan to be substantially completed in the first half of 2010.
Restructuring charges for 2008 Restructuring Plans have been aggregated and are included in the caption
“Restructuring charges” in the Company’s consolidated statement of operations, with the exception of $1 million
in 2008, which is classified as discontinued operations.
The following table provides a summary of each major type of cost associated with the 2008 Restructuring
Plans through December 26, 2009:
December 26,
2009
December 27,
2008 Total
(In millions)
Severance and benefits ......................... $25 $53 $ 78
Contract or program terminations ................ 12 13 25
Asset impairments ............................ 8 18 26
Facility consolidations and closures .............. 15 6 21
Total ....................................... $60 $90 $150
The following table provides a roll forward of the liability associated with the 2008 Restructuring Plans:
Severance and
related benefits
Other exit-
related costs
(in millions)
Balance December 27, 2008 ........................... $18 $ 9
Net charges .................................... 25 27
Cash payments .................................. (37) (19)
Balance December 26, 2009 ........................... $ 6 $17
In December 2002, the Company initiated a restructuring plan (the 2002 Restructuring Plan) to align the
cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory.
The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at the Sunnyvale, California site
and at sales offices worldwide. With respect to its Sunnyvale, California site, the Company entered into a
sublease agreement for a portion of these facilities with Spansion Inc. On March 1, 2009, Spansion Inc. filed a
voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. On March 31, 2009,
Spansion Inc. filed a motion in that proceeding in which it indicated that it does not intend to perform its
obligations under its sublease agreement with the Company. As a result of this and the Company’s ongoing
assessment of the restructuring accrual, the Company recorded an additional charge of approximately $5 million
in the first quarter of 2009, which is included in the caption “Restructuring charges” in its consolidated statement
of operations. These amounts will be paid through 2011.
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