AMD 2015 Annual Report Download - page 109

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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 2028.
The Company also leases certain manufacturing and office equipment for terms ranging from one to five years.
Rent expense for 2015, 2014 and 2013 was $47 million, $59 million and $64 million, respectively.
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%.
In September 2013, the Company sold a light industrial building in Singapore and leased back a portion of
the original space. The Company recorded a deferred gain of $14 million on the sale and is amortizing over the
initial lease term. The initial operating lease term expires in September 2023 and provides for options to extend
the lease for 4 years at the end of the initial lease term, and for an additional 3.5 years thereafter.
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 26, 2015 were $306 million.
Purchase and Other Contractual Obligations
The Company’s purchase obligations primarily include the Company’s obligations to purchase wafers and
substrates from third parties. As of December 26, 2015, total non-cancelable purchase obligations, excluding the
Company’s wafer purchase commitments to GF under the WSA, were $319 million.
The Company also had other contractual obligations, included in “Other long-term liabilities” on its
consolidated balance sheet, which consists of $40 million of payments due under certain software and technology
licenses that will be paid through 2018.
Future unconditional purchase obligations as of December 26, 2015 were as follows:
Year
Unconditional
purchase
obligations
(In millions)
2016 .......................................................... $254
2017 .......................................................... 42
2018 .......................................................... 37
2019 .......................................................... 26
2020 .......................................................... —
2021 and thereafter .............................................. —
Total unconditional purchase commitments ........................... $359
Obligations to GF
Obligations to GF represent all of the Company’s expected cash payments to GF based on wafer receipts
and research and development activities. As of December 26, 2015, purchase obligations for fiscal 2016 were
approximately $248 million, of which amount wafers and research and development activities of approximately
$185 million were received by December 31, 2015.
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
103