AMD 2002 Annual Report Download - page 80

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$138.9 million primarily to vacate and consolidate the Company’s facilities and $55.5 million resulting from the abandonment of partially completed ERP and
other information technology implementation activities.
The Company began activities pursuant to the 2002 Plan during the fourth quarter of 2002, and expects to substantially complete the activities associated
with the 2002 Plan by the end of June 2003. As of December 29, 2002, 929 employees were terminated pursuant to the 2002 Plan resulting in cash payments of
$14 million in severance and employee benefit costs.
The following table summarizes activities under the 2002 Plan through December 29, 2002:
Severance and
employee
benefits Asset impairment Exit costs
Other
restructuring
charges Total
(Thousands)
2002 provision $ 68,770 $ 118,590 $ 138,900 $ 4,315 $ 330,575
Q4 2002 non-cash charges — (118,590) — — (118,590)
Q4 2002 cash charges (14,350) — (795) — (15,145)
Accruals at December 29, 2002 $ 54,420 $ — $ 138,105 $ 4,315 $ 196,840
2001 Restructuring Plan
In 2001, the Company announced a restructuring plan (the 2001 Plan) due to the continued slowdown in the semiconductor industry, and a resulting
decline in revenues. In connection with the plan, the Company closed Fabs 14 and 15 in Austin, Texas. These facilities supported certain of the Company’s older
products and its Foundry Service operations, which have been discontinued as part of the plan. The Company also reorganized related manufacturing facilities
and reduced activities primarily in Penang, Malaysia along with associated administrative support.
Pursuant to the 2001 Plan, the Company recorded restructuring costs and other special charges of $89.3 million, consisting of $34.1 million of anticipated
severance and fringe benefit costs, $13.0 million and $3.2 million of anticipated exit costs to close facilities in Austin and Asia, mostly in Penang, and $28.7
million and $10.3 million of non-cash asset impairment charges in Austin and Asia, primarily Penang. The asset impairment charges related primarily to
buildings and production equipment and have been incurred as a result of the Company’s decision to implement the plan. The Company substantially completed
execution of its restructuring plan by the end of 2002. As of December 29, 2002, 2,209 employees had been terminated pursuant to the 2001 Plan resulting in
cash payments of approximately $35.8 million for severance and employee benefit costs, of which $1.7 million was included in current year results of operations.
720 of these positions were associated with closing Fabs 14 and 15. The balance of the reductions resulted from reorganizing activities, primarily in Penang,
Malaysia, along with associated administrative support. In addition, the planned facilities closures had been completed as of December 29, 2002 and related
decommissioning costs will be incurred over the next six months.
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003