AMD 2005 Annual Report Download - page 51

Table of Contents
Unconditional Purchase Commitments
Total non-cancelable purchase commitments as of December 25, 2005, were $1.4 billion for periods through 2020. These purchase commitments include
$559 million related to contractual obligations of Fab 30 and Fab 36 to purchase silicon-on-insulator wafers and purchases of energy and gas and up to $226
million representing future payments to IBM pursuant to our joint development agreement. As IBM’s services are being performed ratably over the life of the
agreement, we expense the payments as incurred. In August 2005, we amended this agreement, and among other things, extended its termination date through
December 2011. However, capital purchases by IBM necessary for the continued development of process development projects past December 31, 2008 are
conditioned upon the approval of IBM’s board of directors. If such approval is not received by September 30, 2007, either party has the right to terminate the
agreement effective December 31, 2008 without liability. Accordingly, the table above only reflects our obligations through December 31, 2008. If such approval
is received from IBM, the additional obligations from January 2009 through 2011 would be between $276 million and $306 million. In addition, unconditional
purchase commitments also include $107 million for software maintenance agreements that require periodic payments through 2009. The remaining
commitments primarily consist of non-cancelable contractual obligations to purchase raw materials, natural resources and office supplies. Purchase orders for
goods and services that are cancelable without significant penalties are not included in the amount set forth in the table above.
Other Long-Term Liabilities
One component of Other Long-Term Liabilities that requires us to make cash payments is a net restructuring accrual of $66 million relating to the net
future operating lease payments on certain facilities that were included in our 2002 Restructuring Plan. We will make these payments through 2011. We included
these amounts in the operating lease total in the table above. The other components of Other Long-Term Liabilities do not require us to make cash payments and
primarily consist of $342 million of deferred grants and subsidies related to the Fab 30 and Fab 36 projects and a $20 million deferred gain as a result of the sale
and leaseback of our corporate marketing, general and administrative facility in Sunnyvale, California in 1998.
Guarantees
Guarantees of Indebtedness Recorded on Our Consolidated Balance Sheet
The following table summarizes the principal guarantees issued as of December 25, 2005 related to underlying liabilities that are already recorded on our
consolidated balance sheet as of December 25, 2005 and their expected expiration dates by year. No incremental liabilities are recorded on our consolidated
balance sheet for these guarantees. For more information on these guarantees, see “Contractual Cash Obligations and Guarantees,” above.
Amounts
Guaranteed
Fiscal
2006
Fiscal
2007
Fiscal
2008
Fiscal
2009
Fiscal
2010
Fiscal
2011 and
Beyond
(In thousands)
Repurchase Obligations to Fab 36 partners (1),(2) $ 151,924 $ 37,981 $ 37,981 $ 37,981 $ 37,981 $ — $ —
(1) Amounts represent the principal amount of the underlying obligations guaranteed and are exclusive of obligations for interest, fees and expenses.
(2) This amount represents the silent partnership contributions that we are required to repurchase from the unaffiliated limited partners of AMD Fab 36 KG.
See “Fab 36 Term Loan and Guarantee and Fab 36 Partnership Agreements,” above.
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Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006