AMD 2009 Annual Report Download - page 67

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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 primarily related to lease obligations that will be paid through 2012. We
anticipate cash payments related to this liability to be $19 million in 2010, $2 million in 2011 and $2 million in
2012. We expect this plan to be substantially completed in the first half of 2010.
Restructuring charges for the 2008 Restructuring Plans have been aggregated and are included in the caption
“Restructuring charges” in our 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, we 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 our Sunnyvale, California site, we 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 us. As a result of this and our ongoing assessment of the restructuring accrual, we recorded an
additional charge of approximately $5 million in the first quarter of 2009, which is included in the caption
“Restructuring charges” in our consolidated statement of operations. These amounts will be paid through 2011.
The following table provides a roll forward of the liability associated with the 2002 Restructuring Plan:
Lease Obligations
(In millions)
Balance December 27, 2008 ..................................... $32
Charges ................................................. 5
Cash payments ........................................... (17)
Balance December 26, 2009 ..................................... $20
59