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Table of Contents
Approximately $81 million of Fab 30/Fab 36 deferred grants and subsidies as of December 25, 2005 is associated with Fab 30, which will continue to be
amortized ratably through December 2007 because the Company is required to maintain certain employee headcount levels through December 2007. The
remaining deferred grants and subsidies balance are associated with Fab 36 (see Note 8).
NOTE 15: Restructuring and Other Special Charges
2002 Restructuring Plan
In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to industry
conditions resulting from weak customer demand and industry-wide excess inventory.
With the exception of the exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are
payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan.
The following table summarizes activities under the 2002 Plan through December 25, 2005:
Severance
and
employee
benefits
Asset
impairment
Facility exit
and
equipment
Decommission
costs
Other
restructuring
charges Total
(In thousands)
Accruals at December 29, 2002 $ 54,420 $ — $ 138,105 $ 4,315 $ 196,840
2003 Provision — 7,791 3,314 — 11,105
Cash payments (38,816) — (20,796) (4,300) (63,912)
Non-cash charges — (7,791) — — (7,791)
Non-cash adjustments (8,864) — — (15) (8,879)
Accruals at December 28, 2003 $ 6,740 $ — $ 120,623 $ — $ 127,363
Cash payments (6,789) — (20,150) — (26,939)
Non-cash adjustments 49 — 5,203 — 5,252
Accruals at December 26, 2004 $ — $ — $ 105,676 $ — $ 105,676
Cash payments — — (20,773) — (20,773)
Accruals at December 25, 2005 $ — $ — $ 84,903 $ — $ 84,903
As of December 25, 2005 and December 26, 2004, $66 million and $87 million of the total restructuring accruals of $85 million and $106 million were
included in other long-term liabilities on the consolidated balance sheets. (See Note 14.)
NOTE 16: Contingencies
Environmental Matters
Superfund Clean-Up Orders. The Company is named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale, California that are
on the National Priorities List. Since 1981, the Company has discovered hazardous material releases to the groundwater from former underground tanks and
proceeded to investigate and conduct remediation at these three sites. The chemicals released into the groundwater were commonly used in the semiconductor
industry in the United States in the wafer fabrication process prior to 1979.
In 1991, the Company received Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board relating to the three
sites. The Company has entered into settlement agreements with other responsible parties on two of the orders during the term of such agreements. Under these
agreements
118
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006