AMD 2013 Annual Report Download - page 110

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The Company leases certain of its facilities and in some jurisdictions the Company leases the land on which
these facilities are built, under non-cancelable lease agreements that expire at various dates through 2025. The
Company also leases certain manufacturing and office equipment for terms ranging from 1 to 5 years. Rent
expense was approximately $64 million, $49 million and $48 million in 2013, 2012 and 2011.
In December 1998, the Company arranged for the sale of its marketing, general and administrative facility
in Sunnyvale, California and leased it back for a period of 20 years. The Company recorded a deferred gain of
$37 million on the sale and is amortizing it over the life of the lease. The lease expires in December 2018. At the
beginning of the fourth lease year and every three years thereafter, the rent is adjusted by 200% of the cumulative
increase in the consumer price index over the prior three-year period, up to a maximum of 6.9%.
In September 2013, the Company sold a light industrial building in Singapore and leased back a portion of
the original space. The Company recorded a deferred gain of $14 million on the sale and is amortizing over the
initial lease term. The initial lease term expires in September 2023 and provides for options to extend the lease
for 4 years, at the end of the initial lease term, and for an additional 3.5 years thereafter.
Certain other operating leases contain provisions for escalating lease payments subject to changes in the
consumer price index. Total future lease obligations as of December 28, 2013, were approximately $388 million.
Purchase and Other Contractual Obligations
The Company’s purchase obligations primarily include the Company’s obligations to purchase wafers and
substrates from third parties. As of December 28, 2013, total non-cancelable purchase obligations, excluding the
Company’s wafer purchase commitments to GF under the WSA, were $456 million.
The Company also had other contractual obligations, included in “Other long-term liabilities” on its
consolidated balance sheet, which consists of $131 million of payments due under certain software and
technology licenses that will be paid through 2017.
Future unconditional purchase obligations as of December 28, 2013 were as follows:
Year
Unconditional
purchase
obligations
(In millions)
2014 .......................................................... $438
2015 .......................................................... 80
2016 .......................................................... 39
2017 .......................................................... 30
2018 .......................................................... —
2019 and thereafter .............................................. —
Total unconditional purchase commitments ........................... $587
Obligations to GF
Obligations to GF represents all of the Company’s contractual obligations to GF, including approximately
$250 million for inventory purchases during the first quarter of 2014 and other payables under the WSA as
described below.
Pursuant to the third amendment to the WSA, GF agreed to waive a portion of the Company’s wafer
purchase commitments for the fourth quarter of 2012. In consideration for this waiver, the Company agreed to
pay GF a fee of $320 million. The cash impact of this $320 million fee was paid over several quarters, with $80
million paid on December 28, 2012, $40 million paid on April 1, 2013 and $200 million paid on December 31,
2013.
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