AMD 2011 Annual Report Download - page 71

Purchase Obligations
Our purchase obligations primarily include our obligations to purchase wafers and substrates from third
parties. Total non-cancelable purchase obligations, other than those to GF under the WSA, as of December 31,
2011 were $374 million.
We currently estimate that we will pay GF approximately $1.5 billion in 2012 for wafer purchases. These 2012
estimated costs are based in part on our current expectations regarding GF’s manufacturing yields and wafer
volumes, and the successful conclusion of our negotiations with GF and ATIC related to a second amendment to the
WSA, including the pricing methodology. Costs are also impacted by variations in yields and several other factors
including our current expectations regarding demand for our products. In addition, we estimate that additional
purchase obligations in connection with research and development related to GF wafer production will be
approximately $71 million in 2012. We are not currently able to meaningfully quantify or estimate our purchase
obligations to GF beyond 2012, but we expect that our future purchases from GF will continue to be material.
Receivable Financing Arrangement
In 2011, we received proceeds of approximately $170 million from the sale of accounts receivable under the
receivable financing arrangement with the IBM Parties. The IBM Parties collected approximately $396 million
from our distributor customers participating in the financing arrangement. We terminated our financing
arrangement with the IBM Parties in February 2011 and did not make any adjustments to GAAP net cash
provided by operating activities related to this financing arrangement in the third or fourth quarters of 2011
because there were no outstanding invoices, and we do not intend to do so in future periods.
Guarantees of Indebtedness Not Recorded on our Consolidated Balance Sheet
Fab 36 Guarantee
In connection with the consummation of the GF manufacturing joint venture transaction on March 2, 2009,
the terms of the 700 million euro Term Loan Facility Agreement among AMD Fab 36 Limited Liability
Company & Co. KG, as borrower, and a consortium of banks led by Dresdner Bank AG, as lenders (the Fab 36
Term Loan), and other related agreements (collectively, the Fab 36 Loan Agreements) were amended to allow for
the transfer of our former 300-millimeter wafer fabrication facility and its affiliated companies to GF. In
addition, we also amended the terms of the related guarantee agreement such that we and GF were joint
guarantors of the borrower’s obligations to the lenders under the Fab 36 Loan Agreements. On March 31, 2011,
GF fully repaid the amounts outstanding under the Fab 36 Term Loan. We were not required to make any
payments under the related guarantee agreement.
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. In 2010, our limited partnership interests in
AMTC and BAC were transferred to an affiliate of GF.
AMD, GF and Toppan Photomasks Germany GmbH guaranteed AMTC’s rental obligations relating to a
portion of the BAC facility. Our portion of the guarantee was made on a joint and several basis with GF. GF
separately agreed to indemnify us under certain circumstances if we were called upon to make any payments
under the guarantee granted by us.
The BAC term loan was fully repaid in December 2011, and as a result the AMTC rental contract guarantee
terminated. We were not required to make any payments under the guarantee.
In addition, AMD and GF were joint and several guarantors of 50% of AMTC’s obligations under a
revolving credit facility. In December 2011, we were released from the guarantee. We were not required to make
any payments under the guarantee.
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