AMD 2008 Annual Report Download - page 143

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Future Payments on Debt and Capital Lease Obligations
As of December 27, 2008, the Company’s debt and capital lease payment obligations for each of the next
five years and beyond, are:
Long-Term
Debt
(Principal
only)
Capital
Leases Total
(In millions)
2009 ........................................... $ 274 $ 40 $ 314
2010 ........................................... 290 41 331
2011 ........................................... 169 40 209
2012 ........................................... 1,890 41 1,931
2013 ........................................... 41 41
Beyond 2013 ..................................... 2,140 195 2,335
Total ........................................... 4,763 398 5,161
Less: amount representing interest .................... — 173 173
Total ........................................... $4,763 $225 $4,988
Receivable financing arrangement Classified as Other Short-Term Obligations
On March 26, 2008, the Company entered into a Sale of Receivables – Supplier Agreement with IBM Credit
LLC (IBM Credit), and one of its wholly-owned subsidiaries, AMD International Sales & Service, Ltd.
(AMDISS), entered into the same sales agreement with IBM United Kingdom Financial Services Ltd. (IBM UK),
pursuant to which the Company and AMDISS agreed to sell to each of IBM Credit and IBM UK certain
receivables. Pursuant to the sales agreements, the IBM parties agreed to purchase from the AMD parties invoices
of specified AMD customers up to credit limits set by the IBM parties for any applicable AMD customer. As of
December 27, 2008, only selected distributor customers have participated in this program. Because the Company
does not recognize revenue until its distributors sell its products to their customers, the Company classified funds
received from the IBM parties as debt according to the requirement of EITF Issue No. 88-18, Sales of Future
Revenues. The debt is reduced as the IBM parties receive payments from the distributors. As of December 27,
2008, $86 million was outstanding under these agreements. This amount appears as “Other short-term
obligations” on the Company’s consolidated balance sheet and is not considered a cash commitment.
NOTE 9: Interest Expense, Other Income (Expense), Net and Gain on sale of 200 millimeter equipment
Interest Expense
2008 2007 2006
(In millions)
Total interest charges .................................... $375 $390 $136
Less: interest capitalized .................................. (9) (23) (10)
Interest expense ......................................... $366 $367 $126
The Company has capitalized interest primarily in connection with the construction of its Fab 36 wafer
fabrication facility and equipment facilitization activities in Dresden, Germany and in connection with the
construction of its corporate campus in Austin, Texas. The Company discontinued capitalizing interest for Fab 36
in the first quarter of 2008 when it was in full production, and the Company discontinued capitalizing interest for
the Austin office facility in the fourth quarter of 2007, when the construction was completed.
133