AMD 2006 Annual Report Download - page 147

Table of Contents
NOTE 17: 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 other parties have assumed most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders. The
Company remains responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not
fulfill their obligations under the settlement agreements.
To address anticipated future remediation costs under the orders, the Company has computed and recorded an estimated environmental liability of
approximately $4.2 million in accordance with applicable accounting rules and has not recorded any potential insurance recoveries in determining the estimated
costs of the cleanup. The progress of future remediation efforts cannot be predicted with certainty, and these costs may change. The Company believes that the
potential future liability, if any, in excess of amounts already accrued will not have a material adverse effect on the Company’s financial condition or results of
operations.
Other Matters
The Company is a defendant or plaintiff in various other actions that arose in the normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the Company’s financial condition or results of operations.
In re ATI Technologies, Inc. Securities Litigation.
In August and September 2005, five class action lawsuits were filed in the United States District Court for the Eastern District of Pennsylvania against ATI
and certain of its directors and officers on behalf of shareholders who purchased ATI common shares between October 7, 2004 and on or about June 23, 2005.
The claims allege that ATI and certain of its directors and officers violated United States securities laws by failing to disclose material facts and making
statements that contained misrepresentations about its business and future outlook. It is alleged that as a result of the failure to disclose material facts and the
alleged misrepresentations, ATI’s common stock traded at artificially inflated prices until the stock price dropped on the news of ATI’s third quarter results in
June 2005. The claims further allege that while in possession of material undisclosed information, certain of ATI’s directors and officers sold a portion of their
common shares at inflated prices. On May 23, 2006, the Court dismissed one of the five actions because the plaintiff failed to serve the summons and complaint.
The four remaining lawsuits were consolidated into a single action, and on September 8, 2006, the plaintiffs filed a consolidated amended complaint. ATI filed
its Motion to Dismiss the Consolidated Amended Complaint on December 4, 2006. On January 25, 2007, class plaintiffs filed their opposition to ATI’s motion to
dismiss.
U.S. Consumer Class Action Lawsuits
In February and March 2006, two consumer class actions were filed in the United States District Court for the Northern District of California against ATI
and three of its subsidiaries. The complaints allege that ATI had misrepresented its graphics cards as being “HDCP ready” when they were not, and on that basis
alleged violations of state consumer protection statutes, breach of express and implied warranty, negligent
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007