AMD 2011 Annual Report Download - page 117

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NOTE 16: Commitments and Guarantees
As of December 31, 2011, total non-cancelable long-term operating lease obligations, including those for
facilities vacated in connection with restructuring activities, were as follows for each of the next five years and
beyond:
Operating
leases
(In millions)
2012 ........................................................... $ 36
2013 ........................................................... 32
2014 ........................................................... 29
2015 ........................................................... 24
2016 ........................................................... 17
2017 and beyond .................................................. 37
$175
The Company leases certain of its facilities and in some jurisdictions the Company leases the land on which
these facilities are built, under non-cancelable lease agreements that expire at various dates through 2022. The
Company also leases certain manufacturing and office equipment for terms ranging from 1 to 5 years. Rent
expense was approximately $48 million, $44 million and $55 million in 2011, 2010, and 2009.
In December 1998, the Company arranged for the sale of its marketing, general and administrative facility
in Sunnyvale, California and leased it back for a period of 20 years. The Company recorded a deferred gain of
$37 million on the sale and is amortizing it over the life of the lease. The lease expires in December 2018. At the
beginning of the fourth lease year and every three years thereafter, the rent is adjusted by 200% of the cumulative
increase in the consumer price index over the prior three-year period, up to a maximum of 6.9%. Certain other
operating leases contain provisions for escalating lease payments subject to changes in the consumer price index.
Total future lease obligations as of December 31, 2011, were approximately $175 million.
The Company’s purchase obligations primarily include the Company’s obligations to purchase wafers and
substrates from third parties. Total non-cancelable purchase obligations, other than those to GF under the WSA,
as of December 31, 2011 were $374 million. For the obligations to GF under the WSA, see discussion in Note 3.
Guarantees of Indebtedness Not Recorded on the Company’s Consolidated Balance Sheet
AMTC and BAC Guarantees
The Advanced Mask Technology Center GmbH & Co. KG (AMTC) and Maskhouse Building
Administration GmbH & Co. KG (BAC) are joint ventures initially formed for the purpose of constructing and
operating an advanced photomask facility in Dresden, Germany. In 2010, the Company’s limited partnership
interests in AMTC and BAC were effectively transferred to an affiliate of GF.
AMD, GF and Toppan Photomasks Germany GmbH, guaranteed AMTC’s rental obligations relating to a
portion of the BAC facility. The Company’s portion of the guarantee was made on a joint and several basis with
GF. GF separately agreed to indemnify the Company under certain circumstances if it were called upon to make
any payments under the guarantee granted by the Company.
The BAC term loan was fully repaid in December 2011, and as a result the AMTC rental contract guarantee
terminated. The Company was not required to make any payments under the guarantee.
In addition, the Company and GF were joint and several guarantors of 50% of AMTC’s obligations under a
revolving credit facility. In December 2011, the Company was released from the guarantee. The Company was
not required to make any payments under the guarantee.
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