AMD 1996 Annual Report Download - page 237

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In August, 1996 the Company sold $400 million of Senior Secured Notes due
August 1, 2003 under its shelf registration declared effective by the Securities
and Exchange Commission on May 17, 1994. Due to the sale of the Senior Secured
Notes, the Company fully utilized this shelf registration. Interest on the
Senior Secured Notes accrues at the rate of 11 percent per annum and is payable
semiannually in arrears on February 1 and August 1 of each year, commencing
February 1, 1997. The Senior Secured Notes are secured by substantially all of
the assets of Fab 25 and its ancillary facilities, and are redeemable at the
Company's option after August 1, 2001.
On July 19, 1996, the Company entered into a syndicated bank loan agreement (the
Credit Agreement) which provides for a new $400 million term loan and revolving
credit facility which became available concurrently with the sale of the Senior
Secured Notes. The Credit Agreement replaced the Company's unsecured and unused
$250 million line of credit and its unsecured $150 million four-year term loan.
The Credit Agreement provides for a $150 million three-year secured revolving
line of credit (which can be extended for one additional year, subject to
approval of the lending banks) and a $250 million four-year secured term loan
available to the Company for a period of six months after the closing of the
sale of Senior Secured Notes and which the Company utilized fully in January,
1997.
For each of the next five years and beyond, long-term debt and capital lease
obligations are:
Long-term
Debt
(Principal Capital
(Thousands) only) Leases
-----------------------
1997 $ 3,802 $28,085
1998 4,033 23,370
1999 2,326 8,911
2000 2,493 2,511
2001 167 --
Beyond 2001 401,049 --
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Total 413,870 62,877
Less: amount representing interest -- 4,246
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Total at present value $413,870 $58,631
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Obligations under the lease agreements are collateralized by the assets leased.
Total assets leased were approximately $134 million and $142 million at December
29, 1996 and December 31, 1995, respectively. Accumulated amortization of these
leased assets was approximately $72 million and $71 million at December 29, 1996
and December 31, 1995, respectively.
The above debt agreements contain provisions regarding limits on the Company's
and its subsidiaries' ability to engage in various transactions and require
satisfaction of specified financial performance criteria. At December 29, 1996,
the Company was in compliance with all restrictive covenants of such debt
agreements and all retained earnings were restricted as to payments of cash
dividends on common stock.
NOTE 10. INTEREST EXPENSE & INTEREST INCOME AND OTHER, NET
INTEREST EXPENSE
1996 1995 1994
----------------------------------
Interest expense $ 32,507 $ 21,102 $12,704
Interest capitalized (17,670) (18,043) (8,294)
-------- -------- -------
$ 14,837 $ 3,059 $ 4,410
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In 1996, interest expense primarily consisted of interest expense incurred on
the Company's Senior Secured Notes sold in August, 1996 and interest
capitalized primarily related to equipment installation in Fab 25. In 1995,
interest expense primarily consisted of interest payments on the $150 million
four-year term loan the Company entered into on January 5, 1995, and interest
capitalized primarily related to the construction of Fab 25.
INTEREST INCOME AND OTHER, NET
(Thousands) 1996 1995 1994
---------------------------------
Interest income $19,564 $29,518 $23,331
Other income (loss) 39,827 2,947 (6,197)
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$59,391 $32,465 $17,134
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997