AMD » Topics » December 2002 Restructuring Plan

This excerpt taken from the AMD 8-K filed Apr 2, 2009.

December 2002 Restructuring Plan

In December 2002, the Company initiated a restructuring plan (the “December 2002 Restructuring Plan”) to align its cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory. The December 2002 Restructuring Plan included the consolidation of facilities, primarily at the Company’s Sunnyvale, California site, and at sales offices worldwide. With respect to its Sunnyvale, California site, the Company entered into a sublease agreement for a portion of these facilities with Spansion Inc. On March 1, 2009, Spansion filed a voluntary petition for reorganization under chapter 11 of the U.S. Bankruptcy Code. On March 31, 2009, Spansion filed a motion in that proceeding in which it indicated that it does not intend to perform its obligations under its sublease agreement with the Company. As a result of this and the Company’s ongoing assessment of the restructuring accrual, the Company expects to record an additional charge of $5 million in the first quarter of fiscal 2009 related to its December 2002 Restructuring Plan.


This excerpt taken from the AMD DEF 14A filed Jan 16, 2009.

2002 Restructuring Plan

In December 2002, the Company began implementing the 2002 Restructuring Plan to further align its cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory.


Table of Contents

The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at its Sunnyvale, California site and at sales offices worldwide. The Company vacated and is attempting to sublease certain facilities that the Company currently occupies under long-term operating leases through 2011. As of December 29, 2007 and December 31, 2006, the Company had approximately $50 million and $67 million of related vacated lease accruals recorded which will continue to be paid through 2011. As of December 29, 2007 and December 31, 2006, $31 million and $48 million of the total restructuring accruals of $50 million and $67 million were included in other long-term liabilities on the consolidated balance sheets (see Note 15).

This excerpt taken from the AMD 8-K filed Jan 9, 2009.

2002 Restructuring Plan

In December 2002, the Company began implementing the 2002 Restructuring Plan to further align its cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory.

The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at its Sunnyvale, California site and at sales offices worldwide. The Company vacated and is attempting to sublease certain facilities that the Company currently occupies under long-term operating leases through 2011. As of December 29, 2007 and December 31, 2006, the Company had approximately $50 million and $67 million of related vacated lease accruals recorded which will continue to be paid through 2011. As of December 29, 2007 and December 31, 2006, $31 million and $48 million of the total restructuring accruals of $50 million and $67 million were included in other long-term liabilities on the consolidated balance sheets (see Note 15).

This excerpt taken from the AMD 10-K filed Feb 26, 2008.

2002 Restructuring Plan

In December 2002, the Company began implementing the 2002 Restructuring Plan to further align its cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory.

The 2002 Restructuring Plan resulted in the consolidation of facilities, primarily at its Sunnyvale, California site and at sales offices worldwide. The Company vacated and is attempting to sublease certain facilities that the Company currently occupies under long-term operating leases through 2011. As of December 29, 2007 and December 31, 2006, the Company had approximately $50 million and $67 million of related vacated lease accruals recorded which will continue to be paid through 2011. As of December 29, 2007 and December 31, 2006, $31 million and $48 million of the total restructuring accruals of $50 million and $67 million were included in other long-term liabilities on the consolidated balance sheets (see Note 15).

This excerpt taken from the AMD 10-Q filed Nov 7, 2007.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. The Company has completed the activities associated with the 2002 Restructuring Plan.

The accruals under the 2002 Restructuring Plan at December 31, 2006 were $67 million and consisted primarily of remaining lease payments on abandoned facilities, net of estimated sublease income, that are payable through 2011. During the quarter and nine months ended September 29, 2007, the Company paid an aggregate amount of $4 million and $13 million, respectively, related to facility exit costs. As a result, the accruals as of September 29, 2007 were $54 million.

 

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Table of Contents

As of September 29, 2007 and December 31, 2006, $35 million and $48 million, of the total restructuring accruals of $54 million and $67 million, respectively, were included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at September 29, 2007 and December 31, 2006 consisted of:

 

     September 29,
2007
   December 31,
2006
     (In millions)

Fab 30/Fab 36 deferred grants and subsidies

   $ 403    $ 364

Restructuring accrual (see Note 9)

     35      48

Deferred gain on sale leaseback of building

     17      18

Payables for technology licenses

     115      66

Unrecognized tax benefits

     50      —  

Accrued sabbatical and other

     30      21
             
   $ 650    $ 517
             

11. Other Financial Matters

This excerpt taken from the AMD 10-Q filed Aug 7, 2007.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. The Company has completed the activities associated with the 2002 Restructuring Plan.

The accruals under the 2002 Restructuring Plan at December 31, 2006 were $67 million and consisted primarily of remaining lease payments on abandoned facilities, net of estimated sublease income, that are payable through 2011. During the quarter and six months ended June 30, 2007, the Company paid an aggregate amount of $4 million and $9 million related to facility exit costs. As a result, the accruals at June 30, 2007 were $58 million, $39 million of which is included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at June 30, 2007 and December 31, 2006 consisted of:

 

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Table of Contents
     June 30,
2007
   December 31,
2006
     (In millions)

Fab 30/Fab 36 deferred grants and subsidies

   $ 383    $ 364

Restructuring accrual (see Note 9)

     39      48

Deferred gain on sale leaseback of building

     18      18

Payables for technology licenses

     91      66

Unrecognized tax benefits

     49      —  

Accrued sabbatical and other

     30      21
             
   $ 610    $ 517
             

11. Other Financial Matters

This excerpt taken from the AMD 10-Q filed May 9, 2007.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. With the exception of the exit costs consisting primarily of remaining lease

 

18


payments on abandoned facilities, net of estimated sublease income, that are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan. The accruals under the 2002 Restructuring Plan at December 31, 2006 were $67 million. During the first quarter of 2007, the Company paid an aggregate amount of $4 million related to facility exit costs. As a result, the accruals at March 31, 2007 were $63 million.

As of March 31, 2007 and December 31, 2006, $44 million and $48 million of the total restructuring accruals of $63 million and $67 million were included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at March 31, 2007 and December 31, 2006 consisted of:

 

       March 31,   
2007
   December 31,
2006
     (In millions)

Fab 30/Fab 36 deferred grants and subsidies

   $ 351    $ 364

Restructuring accrual (see Note 9)

     44      48

Deferred gain on sale leaseback of building

     18      18

Payables for technology licenses

     84      66

Unrecognized tax benefits

     57      —  

Accrued sabbatical and other

     37      21
             
   $ 591    $ 517
             

11. Income Taxes

The Company recorded an income tax provision of $23 million, or -4% on pre-tax losses in the first quarter of 2007 and an income tax provision of $35 million, or 15% of pre-tax income for the first quarter of 2006.

The income tax provision recorded in the first quarter of 2007 was primarily for deferred U.S. taxes related to indefinite-lived goodwill and foreign current taxes. The income tax provision in the first quarter of 2006 was for taxes on income generated in both the U.S. and foreign jurisdictions.

On January 1, 2007, upon adoption of FIN 48, the cumulative effect of applying FIN 48 was reported as a reduction of the beginning balance of retained earnings of $6 million and a decrease to goodwill of $3 million.

As of the date of adoption, the Company’s total gross unrecognized tax benefits were $178 million, of which $49 million, if recognized, would affect the effective tax rate. The recognition of the remaining unrecognized tax benefits would be reported as an adjustment to goodwill to the extent of pre-acquisition unrecognized tax benefits.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as interest expense and income tax expense, respectively. The Company had accrued interest and penalties of $59 million as of the date of adoption of FIN 48.

As of the date of adoption of FIN 48, tax years 1994 – 2006 remain subject to examination in the U.S., tax years 1999 – 2006 remain subject to examination in Canada and tax years 1999 – 2006 remain subject to examination in various foreign jurisdictions.

 

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The Company does not currently anticipate that its unrecognized tax benefits will significantly change within the next 12 months.

As of March 31, 2007 substantially all of the Company’s U.S. deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance that was initially established in the fourth quarter of 2002. The realization of these assets is dependent on substantial future taxable income which at March 31, 2007 in management’s estimate, is not more likely than not to be achieved.

As a result of the implementation of FIN 48 the Company has recognized $56 million of current and long-term deferred tax assets, previously under a valuation allowance, and $56 million of current and non-current tax contingencies as of March 31, 2007.

The total gross unrecognized tax benefits increased by $4 million in the first quarter of 2007. Interest and penalties incurred in the first quarter of 2007 were immaterial.

12. Subsequent Events

This excerpt taken from the AMD 10-K filed Mar 1, 2007.

2002 Restructuring Plan

 

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to industry conditions resulting from weak customer demand and industry-wide excess inventory.

 

With the exception of the exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan.

 

The following table summarizes activities under the 2002 Restructuring Plan for the three years ended December 31, 2006:

 

     

Severance

and

Employee

Benefits

   

Facility Exit

and

Equipment

Decommission

Costs

    Total  
           (In millions)        

Accruals at December 28, 2003

   $ 7     $ 121     $ 128  

Cash payments

     (7 )     (20 )     (27 )

Non-cash adjustments

     —         5       5  

Accruals at December 26, 2004

   $  —       $ 106     $ 106  

Cash payments

     —         (21 )     (21 )

Accruals at December 25, 2005

   $ —       $ 85     $ 85  

Cash payments

     —         (18 )     (18 )

Accruals at December 31, 2006

   $ —       $ 67     $ 67  

 

As of December 31, 2006 and December 25, 2005, $48 million and $66 million of the total restructuring accruals of $67 million and $85 million were included in other long-term liabilities on the consolidated balance sheets. (See Note 15).

 

141


Table of Contents
This excerpt taken from the AMD 10-Q filed Nov 9, 2006.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. With the exception of the exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan.

The accruals under the 2002 Restructuring Plan at December 25, 2005 were $85 million. During the quarter and nine months ended October 1, 2006, the Company paid an aggregate amount of $5 million and $14 million related to facility exit costs. As a result, the accruals at October 1, 2006 were $71 million.

As of October 1, 2006 and December 25, 2005, $52 million and $66 million of the total restructuring accruals of $71 million and $85 million were included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at October 1, 2006 and December 25, 2005 consisted of:

 

      October 1,
2006
   December 25,
2005
     (In thousands)

Fab 30/Fab 36 deferred grants and subsidies

     320,353    $ 341,502

Restructuring accrual (see Note 9)

     52,112      66,288

Deferred gain on sale leaseback of building

     18,866      20,126

Other

     90,873      31,406
             
   $ 482,204    $ 459,322
             

11. Equity Offering

On January 27, 2006, the Company closed an offering of 14,096,000 shares of its common stock. The net proceeds from this equity offering, after deducting underwriting commissions, discounts and offering expenses, were $495 million. The Company used $231 million of the net proceeds from this offering to fund the redemption of 35 percent (or $210 million) of the aggregate principal amount outstanding of its 7.75% Notes, including a 7.75% redemption premium and accrued interest. See Note 12.

 

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Table of Contents

12. Debt

This excerpt taken from the AMD 10-Q filed Aug 11, 2006.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. With the exception of the exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan.

The accruals under the 2002 Restructuring Plan at December 25, 2005 were $85 million. During the quarter and six months ended July 2, 2006, the Company paid an aggregate amount of $5 million and $10 million related to facility exit costs. As a result, the accruals at July 2, 2006 were $75 million.

As of July 2, 2006 and December 25, 2005, $57 million and $66 million of the total restructuring accruals of $75 million and $85 million were included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at July 2, 2006 and December 25, 2005 consisted of:

 

     July 2,
2006
   December 25,
2005
     (In thousands)

Fab 30/Fab 36 deferred grants and subsidies

   $ 324,587    $ 341,502

Restructuring accrual (see Note 9)

     56,538      66,288

Deferred gain on sale leaseback of building

     19,286      20,126

Other

     49,878      31,406
             
   $ 450,289    $ 459,322
             

 

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11. Equity Offering

On January 27, 2006, the Company closed an offering of 14,096,000 shares of its common stock. The net proceeds from this equity offering, after deducting underwriting commissions, discounts and offering expenses, were $495 million. The Company used $231 million of the net proceeds from this offering to fund the redemption of 35 percent (or $210 million) of the aggregate principal amount outstanding of its 7.75% Notes, including a 7.75% redemption premium and accrued interest. See Note 12.

12. Debt

This excerpt taken from the AMD 10-Q filed May 5, 2006.

2002 Restructuring Plan

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory. With the exception of the exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan.

The accruals under the 2002 Restructuring Plan at December 25, 2005 were $85 million. During the first quarter of 2006, the Company paid an aggregate amount of $5 million related to facility exit costs. As a result, the accruals at March 26, 2006 were $80 million.

As of March 26, 2006 and December 25, 2005, $61 million and $66 million of the total restructuring accruals of $80 million and $85 million were included in other long-term liabilities on the condensed consolidated balance sheets. See Note 10.

10. Other Long-Term Liabilities

The Company’s other long-term liabilities at March 26, 2006 and December 25, 2005 consisted of:

 

     Quarter Ended
     March 26,
2006
   December 25,
2005
     (In thousands)

Fab 30/Fab 36 deferred grants and subsidies

   $ 327,378    $ 341,502

Restructuring accrual (see Note 9)

     61,278      66,288

Deferred gain on sale leaseback of building

     19,706      20,126

Other

     19,712      31,406
             
   $ 428,074    $ 459,322
             

11. Equity Offering

On January 27, 2006, the Company closed the offering of 14,096,000 shares of its common stock. The net proceeds from this equity offering, after deducting underwriting commissions, discounts and offering expenses, were $495 million. The Company used $231 million of the net proceeds from this offering to fund the redemption of 35 percent (or $210 million) of the aggregate principal amount outstanding of its 7.75% Notes, including a 7.75% redemption premium and accrued interest. See Note 12.

12. Debt

This excerpt taken from the AMD 10-Q filed May 6, 2005.

2002 Restructuring Plan

 

In December 2002, the Company began implementing a restructuring plan (the 2002 Restructuring Plan) to further align its cost structure to the industry conditions at that time, including weak customer demand and industry-wide excess inventory.

 

With the exception of the facility exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income, which are payable through 2011, the Company has completed the activities associated with the 2002 Restructuring Plan. As a result of the 2002 Restructuring Plan, 1,786 employees had been terminated pursuant to the 2002 Restructuring Plan resulting in cumulative cash payments of approximately $60 million in severance and employee benefit costs.

 

14


Table of Contents

The following table summarizes activities under the 2002 Restructuring Plan from December 26, 2004 through March 27, 2005:

 

     Exit Costs

 
     (In thousands)  

Accruals at December 26, 2004

   $ 105,676  

First quarter 2005 cash charges

     (5,243 )
    


Accruals at March 27, 2005

   $ 100,433  
    


 

As of March 27, 2005 and December 26, 2004, $81 million and $87 million of the total restructuring accruals of $100 million and $106 million were included in Other Liabilities (long-term) on the consolidated balance sheets. (See Note 10.)

 

10. Other Long-Term Liabilities

 

The Company’s other long-term liabilities at March 27, 2005 and December 26, 2004 consisted of:

 

    

March 27,

2005


  

December 26,

2004


     (in thousands)

Fab 30/Fab 36 deferred grants and subsidies

   $ 341,972    $ 274,150

Deferred gain on sale leaseback of building

     21,387      21,807

Restructuring accrual (see Note 9)

     81,437      86,680

Spansion LLC pension liability (see Note 3)

     25,412      25,890

Other

     17,827      6,099
    

  

     $ 488,035    $ 414,626
    

  

 

11. Subsequent Events

 

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