AMD 2012 Annual Report Download - page 115

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NOTE 15: Commitments and Guarantees
Operating Leases
As of December 29, 2012, the Company’s future non-cancelable operating lease commitments, including
those for facilities vacated in connection with restructuring activities, were as follows:
Year
Operating
leases
(In millions)
2013 ........................................................... $ 37
2014 ........................................................... 34
2015 ........................................................... 28
2016 ........................................................... 21
2017 ........................................................... 18
2018 and thereafter ................................................ 22
Total non-cancelable operating lease commitments ...................... $160
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 $49 million, $48 million and $44 million in 2012, 2011 and 2010.
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 29, 2012, were approximately $160 million.
Purchase Obligations
The Company’s purchase obligations primarily include the Company’s obligations to purchase wafers and
substrates from third parties. As of December 29, 2012, total non-cancelable purchase obligations, excluding the
Company’s wafer purchase commitments to GF under the WSA, were $299 million for 2013.
Obligations to GF
The Company’s obligations to GF for wafer purchases are approximately $1.15 billion for 2013 and $250
million for the first quarter of 2014.
Warranties and Indemnities
The Company generally warrants that its products sold to its customers will conform to the Company’s
approved specifications and be free from defects in material and workmanship under normal use and service for
one year. Subject to certain exceptions, the Company also offers a three-year limited warranty to end users for
only those CPU and AMD A-Series APU products that are commonly referred to as “processors in a box” and
has also offered extended limited warranties to certain customers of “tray” microprocessor products and/or
workstation graphics products who have written agreements with the Company and target their computer systems
at the commercial and/or embedded markets.
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