AMD 2004 Annual Report Download - page 33

Table of Contents
The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at our Sunnyvale, California site and at sales offices worldwide. We
vacated and are attempting to sublease certain facilities currently occupied under long-term operating leases through 2011. We also terminated the
implementation of certain partially completed enterprise resource planning (ERP) software and other information technology implementation activities, resulting
in the abandonment of certain software, hardware and capitalized development costs.
Pursuant to the 2002 Restructuring Plan, we recorded restructuring costs and other special charges of $330.6 million in the fourth quarter of 2002,
consisting primarily of $68.8 million of anticipated severance and fringe benefit costs, an asset impairment charge of $32.5 million relating to a license that has
no future use because of its association with discontinued microprocessor development activities, asset impairment charges of $30.6 million resulting from the
abandonment of equipment previously used in microprocessor process development and manufacturing activities, anticipated exit costs of $138.9 million almost
wholly related to vacating and consolidating our facilities and a charge of $55.5 million resulting from the abandonment of partially completed ERP software and
other information technology implementation activities.
During 2003, management approved the sale of additional equipment primarily used in the SDC that was identified as no longer useful in our operations.
As a result, we recorded approximately $11 million of asset impairment charges in the first quarter of 2003, including $3.3 million of charges for decommission
costs necessary to complete the sale of the equipment.
During 2003, we also revised our estimates of the number of positions to be eliminated pursuant to the 2002 Restructuring Plan from 2,000 to 1,800 in
response to the additional resources required due to the Spansion transaction. As a result, we reversed $8.9 million of the estimated severance and fringe benefit
accrual. As of December 26, 2004, 1,786 employees had been terminated pursuant to the 2002 Restructuring Plan resulting in cumulative cash payments of $60
million in severance and employee benefit costs.
During 2004, we adjusted the restructuring accrual related to the 2002 Restructuring Plan, which resulted in an additional $5.2 million restructuring charge
for the period. The adjustment was primarily related to a change in our estimate of potential sublease opportunities associated with abandoned facilities located in
Sunnyvale, California.
With the exception of exit costs consisting primarily of remaining lease payments on abandoned facilities net of estimated sublease income that are
payable through 2011, we have completed the activities associated with the 2002 Restructuring Plan. With the formation of Spansion and other business changes,
we no longer track the overall cost savings from the 2002 Restructuring Plan because we do not believe this information would be useful.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005