AMD 2007 Annual Report Download - page 146

Table of Contents
Dresden deferred grants and subsidies were approximately $512 million and $558 million at December 29, 2007 and December 31, 2006, respectively. Of
this amount, approximately $111 million and $194 million were included in the caption, “Other Current Liabilities,” on the consolidated balance sheets at
December 29, 2007 and December 31, 2006. Approximately $38 million of Dresden deferred grants and subsidies as of December 29, 2007 are associated with
Fab 38. Fab 38 is the new name given to Fab 30, upon its conversion to a 300-millimeter facility. These grants and subsidies will be amortized over the lifetime
of the Fab 38 equipment. The remaining deferred grants and subsidies balance as of December 29, 2007 are associated with Fab 36 (see Note 9).
NOTE 16: Restructuring and Other Special Charges
2002 Restructuring Plan
In December 2002, the Company began implementing the 2002 Restructuring Plan to further align its cost structure to industry conditions resulting from
weak customer demand and industry-wide excess inventory.
The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at its Sunnyvale, California site and at sales offices worldwide. The
Company vacated and is attempting to sublease certain facilities that the Company currently occupies under long-term operating leases through 2011. As of
December 29, 2007 and December 31, 2006, the Company had approximately $50 million and $67 million of related vacated lease accruals recorded which will
continue to be paid through 2011. As of December 29, 2007 and December 31, 2006, $31 million and $48 million of the total restructuring accruals of $50
million and $67 million were included in other long-term liabilities on the consolidated balance sheets (see Note 15).
NOTE 17: Contingencies
Environmental Matters
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 other parties
have agreed to assume 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 $3.5 million, and the Company 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 liability, if any, in excess
of amounts already accrued, will not have a material adverse effect on its 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 its financial condition or results of operations.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008