AMD 2006 Annual Report Download - page 142

Table of Contents
NOTE 13: Other Employee Benefit Plans
Profit Sharing Program. The Company has a profit sharing program to which the Company may authorize quarterly contributions. All employees, other
than officers, who have worked with the Company for three months or more are eligible to participate in this program. Profit sharing expense was approximately
$50 million in 2006, $22 million in 2005 and $14 million in 2004.
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 up to 100 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 Company’s
contributions to the 401(k) plan were approximately $10 million in 2006, $13 million in 2005 and $12 million in 2004.
NOTE 14: Commitments and Guarantees
The Company leases certain of its facilities, as well as the underlying land in certain jurisdictions, under agreements accounted for as operating leases that
expire at various dates through 2021. The Company also leases certain of its manufacturing and office equipment under agreements accounted for as operating
leases for terms ranging from one to five years. Rent expense was approximately $42 million, $69 million and $63 million in 2006, 2005 and 2004.
For each of the next five years and beyond, noncancelable long-term operating lease obligations, including those for facilities vacated in connection with
restructuring activities, and unconditional purchase commitments are as follows:
Operating
leases
Purchase
commitments
(In millions)
2007 $ 69 $ 1,240
2008 64 624
2009 54 364
2010 49 105
2011 26 102
Beyond 2011 119 600
$ 381 $ 3,035
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 31, 2006, were approximately $381 million, of which $67 million was recorded as a liability
for certain facilities that were included in our 2002 Restructuring Plan. (See Note 16).
The Company, in the normal course of business, enters into purchase commitments to purchase raw materials, energy and gas, other manufacturing and
office supplies and services. Total non-cancelable purchase commitments as of December 31, 2006, were $3.0 billion for periods through 2020. These purchase
commitments include $1 billion 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 $169 million representing payments to
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007