AMD 2002 Annual Report Download - page 74

Table of Contents
For each of the next five years and beyond, noncancelable long-term operating lease obligations, including facilities vacated in connection with
restructuring activities, and unconditional commitments to purchase manufacturing supplies and services are primarily as follows:
Operating leases
Unconditional Purchase
commitments
(Thousands)
2003 $ 54,162 $ 50,351
2004 48,580 49,960
2005 43,550 49,670
2006 38,265 2,726
2007 20,787 2,568
Beyond 2007 171,386 5,136
$ 376,730 $ 160,411
The operating lease of the Company’s corporate marketing, general and administrative facility in Sunnyvale expired in December 1998, at which time the
Company arranged for the sale of the facility to a third party and leased it back under a new operating lease. The Company deferred the gain ($37 million) on the
sale and is amortizing it over a period of 20 years, 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 will be adjusted by 200 percent of the cumulative increase in the consumer price index over the prior three-year period up to a
maximum of 6.9 percent. Certain other operating leases contain provisions for escalating lease payments subject to changes in the customer price index. Total
future lease obligations as of December 29, 2002, were approximately $377 million, of which $137 million was recorded as a liability for certain facilities that
were included in our 2002 Restructuring Plan. (See Note 14.)
In 2002, the Company also entered into long-term research and development agreements. As of December 29, 2002, the Company had recorded a liability
and capitalized $90 million in connection with the agreements. This amount is being amortized ratably over the estimated useful lives of the agreements through
December 2007.
The Company entered into various guarantees as summarized by the following table:
Maximum
amounts
guaranteed
Amounts of guarantee expiration per period
2003 2004 2005 2006 2007
2008 and
beyond
(Thousands)
Dresden intercompany guarantee $ 294,000 $ — $ — $ — $ 294,000 $ — $ —
BAC payment guarantee 26,044 26,044 — — — — —
AMTC payment guarantee 33,336 — — — — 33,336
AMTC rental guarantee 131,000 — — — — — 131,000
FASL guarantee (Note 13) 208,000 — — — — — 208,000
Fujitsu guarantee (Note 13) 125,000 125,000 — — — — —
Total guarantee $ 817,380 $ 151,044 $ — $ — $ 294,000 $ 33,336 $ 339,000
Dresden Loan Agreements and Dresden Guarantee
AMD Saxony (formerly known as AMD Saxony Manufacturing GmbH), an indirect wholly-owned German subsidiary of AMD, continues to facilitize Fab
30, which began production in the third quarter of 2000. AMD, the Federal Republic of Germany, the State of Saxony, and a consortium of banks are providing
financing for the project.
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003