AMD 2007 Annual Report Download - page 264

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
Liabilities Guaranteed by Fujitsu
As of
Dec. 31, 2006
As of
Dec. 25, 2005
(in thousands)
Spansion Japan term loan guarantee(1) $ — $ 72,274
Spansion capital lease guarantees — 18,184
Spansion operating lease guarantees 223 722
Total debt guaranteed by Fujitsu $ 223 $ 91,180
(1) AMD agreed to reimburse Fujitsu 60 percent of any amount paid by Fujitsu under its guarantee of this loan.
The amounts above represent the principal amounts of the underlying obligations guaranteed by AMD and Fujitsu and are exclusive of obligations for
interest, fees and expenses.
11. Commitments
Certain equipment and facilities are leased under various operating leases expiring at various dates through the year 2011. Certain of these leases contain
renewal options. Rental expense was $28.9 million, $35.7 million and $30.6 million for the years ended December 31, 2006, December 25, 2005 and
December 26, 2004, respectively.
Future minimum lease payments under operating leases and unconditional commitments to purchase manufacturing supplies and services as of
December 31, 2006 are as follows:
Operating Leases
Unconditional Purchase
Commitments
(in thousands)
Fiscal 2007 $ 35,807 $ 56,365
Fiscal 2008 26,881 21,487
Fiscal 2009 14,729 5,367
Fiscal 2010 1,234 3,546
Fiscal 2011 413 3,496
$ 79,064 $ 90,261
AMD and Fujitsu have guaranteed approximately $4 million and $200,000, respectively, of the Company’s operating lease obligations as of December 31,
2006.
In June 2002, AMD and Fujitsu entered into a non-exclusive, perpetual license to manufacture and distribute a third-party company’s patented technology.
AMD and Fujitsu agreed to pay this third-party company a running royalty based on AMD’s and Fujitsu’s annual cumulative net sales on the sale of products
containing this technology. The royalty is triggered only if annual cumulative sales targets are met. The license to manufacture and distribute these products was
assigned to the Company as of September 1, 2003. Royalty related to the sale of products containing this license was not significant in fiscal 2006 and fiscal
2005. The Company did not meet the minimum requirements to trigger royalty payments in fiscal 2004.
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008