ADVANCED MICRO DEVICES INCAMD

ADVANCED MICRO DEVICES INC Commitments Disclosure

10-KFiled Feb 5, 20253 min read
Commitments and Guarantees
Operating Leases
The Company has entered into operating and finance leases for its corporate offices, data centers, research and development facilities and certain equipment. The leases expire at various dates through 2038, some of which include options to extend the lease for up to ten years.
For 2024, 2023 and 2022, the Company recorded $147 million, $127 million and $118 million, respectively, of operating lease expense, including short-term lease expense. For 2024, 2023, and 2022, the Company recorded $83 million, $46 million, and $40 million respectively, of variable lease expense, which primarily included operating expenses and property taxes associated with the usage of facilities under the operating leases. For 2024, 2023, and 2022 cash paid for operating leases included in operating cash flows was $155 million $147 million and $108 million, respectively. The Company’s finance and short-term leases are immaterial to the Company’s consolidated financial statements.
Supplemental information related to leases is as follows:
December 28, 2024
Weighted-average remaining lease term in years – operating leases7.28
Weighted-average discount rate – operating leases4.63 %
Future minimum lease payments under non-cancellable operating lease liabilities as of December 28, 2024 are as follows:
Year(In millions)
2025$134 
2026135 
202794 
202866 
202960 
2030 and thereafter235 
        Total minimum lease payments724 
Less: interest(124)
        Present value of net minimum lease payments600 
Less: current portion(109)
        Total long-term operating lease liabilities$491 
Certain other operating leases contain provisions for escalating lease payments subject to changes in the consumer price index.
Commitments
The Company’s purchase commitments primarily include the Company’s obligations to purchase wafers and substrates from third parties and future payments related to certain software and technology licenses and IP licenses. Purchase commitments include obligations made under noncancellable purchase orders and contractual obligations requiring minimum purchases or for which cancellation would lead to significant penalties.
Total future unconditional purchase commitments as of December 28, 2024 were as follows:
 Year(In millions)
2025$4,501 
2026274 
202746 
202846 
202945 
2030 and thereafter56 
 Total unconditional purchase commitments$4,968 
On an ongoing basis, the Company works with suppliers on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Warranties and Indemnities
The Company generally warrants that its products sold to its customers will conform to its approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. The Company may also offer, in general, one to three-year limited warranties based on product type and negotiated warranty terms with certain customers. The Company accrues warranty costs to Cost of sales at the time of sale of warranted products.
Changes in the Company’s estimated liability for product warranty during 2024 and 2023 are as follows:
December 28,
2024		December 30,
2023
 (In millions)
Beginning balance$85 $65 
Provisions during the period213 126 
Settlements during the period(110)(106)
Ending balance$188 $85 
In addition to product warranties, the Company from time to time in its normal course of business indemnifies other parties with whom it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company, with respect to certain matters. In these limited matters, the Company has agreed to hold certain third parties harmless against specific types of claims or losses such as those arising from a breach of representations or covenants, third-party claims that the Company’s products when used for their intended purpose(s) and under specific conditions infringe the intellectual property rights of a third party, or other specified claims made against the indemnified party. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material. In addition, the impact from changes in estimates for pre-existing warranties has been immaterial.
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Historical Timeline

Fiscal YearFiled
2024Feb 5, 2025Showing above
2023Jan 31, 2024
2022Feb 27, 2023
2021Feb 3, 2022
2020Jan 29, 2021
2019Feb 4, 2020
2018Feb 8, 2019
2016Feb 21, 2017

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

Other Available Disclosures

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