AMD 2003 Annual Report Download - page 93

Table of Contents
NOTE 11: Other Employee Benefit Plans
Profit Sharing Program. The Company has a profit sharing program to which the Board of Directors may authorize quarterly contributions. All
employees who have worked with the Company for three months or more are eligible to participate in this program. There was no profit sharing expense in 2002.
Profit sharing expense was approximately $4 million in 2003 and $25 million in 2001.
Retirement Savings Plan. The Company has a retirement savings plan, commonly known as a 401(k) plan, that allows participating employees in the
United States to contribute from one to 15 percent of their pre-tax salary subject to Internal Revenue Service limits. The Company matches employee
contributions at a rate of 50 cents on each dollar of the first six percent of participants’ contributions, to a maximum of three percent of eligible compensation.
The contributions to the 401(k) plan were approximately $10 million in 2003, $14 million in 2002 and $11 million in 2001.
NOTE 12: Commitments and Guarantees
The Company leases certain of its facilities under agreements that expire at various dates through 2018. The Company also leases certain of its
manufacturing and office equipment for terms ranging from one to five years. Rent expense was approximately $53 million, $65 million and $62 million in 2003,
2002 and 2001, respectively.
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 construct the 300-millimeter wafer fabrication facility and purchase manufacturing supplies and
services are as follows:
Operating
leases
Unconditional
purchase
commitments
(Thousands)
2004 $ 74,288 $ 480,109
2005 61,096 98,301
2006 47,969 27,239
2007 40,340 19,154
2008 39,967 2,710
Beyond 2008 203,186 2,623
$ 466,846 $ 630,136
The previous operating lease for the Company’s corporate marketing, general and administrative facility in Sunnyvale, California 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
consumer price index. Total future lease obligations as of December 28, 2003, were approximately $467 million, of which $126 million was recorded as a
liability for certain facilities that were included in our 2002 Restructuring Plan. (See Note 14.)
The Company entered into purchase commitments for manufacturing supplies and services. Total purchase commitments as of December 28, 2003, were
approximately $630 million for periods through 2009. In November 2003, the Company announced its intention to construct and facilitize a 300-millimeter wafer
fabrication facility, Fab 36. Fab 36 will be owned by a newly created partnership named AMD Fab 36 Limited Liability Company & Co. KG, or AMD Fab 36,
and will be located in Dresden, Germany, adjacent to Fab 30. In November 2003, AMD Fab 36 entered into an agreement with a German entity, M+W Zander,
pertaining to the
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004