AMD 2010 Annual Report Download - page 117

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The gross amount of assets recorded under capital leases totaled approximately $23 million and $249
million as of December 25, 2010 and December 26, 2009, and are included in the related property, plant and
equipment category. Amortization of assets recorded under capital leases is included in depreciation expense.
Accumulated amortization of these leased assets was approximately $9 million and $69 million as of
December 25, 2010 and December 26, 2009 respectively.
Future Payments on Long Term Debt and Capital Lease Obligations
As of December 25, 2010, the Company’s long term debt and capital lease payment obligations for each of
the next five years and beyond, are:
Long Term
Debt
(Principal
only)
Capital
Leases
(In millions)
2011 .................................................... $ — $ 5
2012 .................................................... 485 6
2013 .................................................... — 6
2014 .................................................... — 6
2015 .................................................... 780 6
Beyond 2016 ............................................. 1,000 7
Total .................................................... 2,265 36
Less: amount representing interest ............................ — 6
Total .................................................... $2,265 $30
Other Short-Term Obligations—Receivable Financing Arrangement
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. In November 2009, AMD (China), Co. Ltd entered into a similar sales agreement with IBM
Factoring (China) Co., Ltd., (IBM GF), pursuant to which AMD (China) agreed to sell to IBM GF 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. As of December 25, 2010, 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. The debt is reduced as the IBM parties receive payments from the distributors. In 2010, the Company
received proceeds of approximately $988 million from the transfer of accounts receivable under these financing
arrangements, and the IBM parties collected approximately $915 million from the distributors participating in
these arrangements. $229 million and $156 million were outstanding under these agreements as of December 25,
2010 and December 26, 2009, respectively. These amounts appear as “Other short-term obligations” on the
Company’s consolidated balance sheets and are not considered cash commitments. In December 2009, the
Company expanded its relationship with IBM to include selected distributor receivables of its Canadian
subsidiary, ATI Technologies. On February 11, 2011, the Company terminated these supplier agreements.
NOTE 11: Legal Settlements
Samsung Settlement
On December 22, 2010, the Company entered into a Patent License and Settlement Agreement with
Samsung to end all outstanding legal disputes related to pending patent litigation between the Company and
109