AMD 2009 Annual Report Download - page 79

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Included in the non-current unrecognized tax benefits is a potential cash payment of approximately $13 million
that could be payable by us upon settlement with a taxing authority. We have not included this amount in the
contractual obligations table above as we cannot make a reasonably reliable estimate regarding the timing of any
settlement with the respective taxing authority, if any.
Capital Lease Obligations
As of December 26, 2009, we had aggregate outstanding capital lease obligations of $256 million. Included
in this amount is $225 million of GF’s obligations under certain energy supply contracts for its wafer fabrication
facilities in Dresden, Germany. Certain fixed payments due under these energy supply arrangements are
accounted for as capital leases.The capital lease obligations under the energy supply arrangements are payable in
monthly installments through 2020.
Operating Leases
We lease certain of our facilities, including our executive offices in Sunnyvale, California, and in some
jurisdictions we lease the land on which these facilities are built, under non-cancelable lease agreements that
expire at various dates through 2018. Certain manufacturing and office equipment is leased for terms ranging
from 1 to 5 years. Total future non-cancelable lease obligations as of December 26, 2009 were $215 million, of
which $32 million is accrued as a liability for certain facilities that were included in our 2002 and 2008
restructuring plans. These payments will be made through 2012. Of the total future non-cancelable lease
obligations as of December 26, 2009, GF is responsible for $9 million.
Purchase Obligations
Total non-cancelable purchase obligations as of December 26, 2009 were $1.9 billion for periods through
2020. These purchase obligations include approximately $700 million related to GF’s contractual obligations for
the purchase of energy and gas for its wafer fabrication facilities in Dresden, Germany, and $828 million
representing payments by GF to IBM for the period from December 26, 2009 through 2015 pursuant to its joint
development agreement. As IBM’s services are being performed ratably over the life of the agreement, the
payments are expensed as incurred. The IBM agreement and the related payment obligations as well as the
obligations to purchase energy and gas were transferred to GF upon the Closing on March 2, 2009. The
remaining purchase obligations include non-cancelable contractual obligations, including GF contractual
obligations, to purchase raw materials, natural resources and office supplies. Due to the deconsolidation of GF in
2010, our purchase obligations will increase significantly because of our commitments under the Wafer Supply
Agreement to purchase wafers from GF.
Receivable financing arrangement
In March 2008, we and one of our subsidiaries, AMD International Sales & Service, Ltd. (AMDISS),
entered into Sale of Receivables—Supplier Agreements with IBM Credit LLC (IBM Credit) and IBM United
Kingdom Financial Services Ltd. (IBM UK), pursuant to which AMD and AMDISS agreed to sell to each of
IBM Credit and IBM UK certain receivables. In November 2009, AMD (China), Co. Ltd entered into a similar
financing arrangement with IBM Factoring (CHINA) Co., Ltd. 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. As of December 26, 2009, only selected distributor customers have participated in this program.
Because we do not recognize revenue until our distributors sell our products to our customers, we classify funds
received from the IBM parties as debt. The debt is reduced as the IBM parties receive payments from our
customers. In 2009, we received proceeds of approximately $605 million from the sale of accounts receivable
under these financing arrangements, and the IBM parties collected approximately $535 million from the
distributors participating in the arrangements. $156 million and $86 million were outstanding under these
agreements as of December 26, 2009 and December 27, 2008, respectively. These amounts appear as “Other
short-term obligations” on our consolidated balance sheets and are not considered cash commitments. In
December 2009, we expanded our relationship with IBM to include selected distributor receivables of our
Canadian subsidiary, ATI Technologies.
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