AMD 2003 Annual Report Download - page 32

Table of Contents
2001 Restructuring Plan as of December 28, 2003. During 2003, we reduced the estimated accrual of the facility and equipment decommission costs by $12.2
million based on the most current information available. During 2003, we also realized a recovery of approximately $3.9 million for the excess of the sale price
over the estimated fair value of equipment that was determined to be impaired as a result of the 2001 Restructuring Plan. Both amounts were included in
restructuring and other special charges, net. As a result of the 2001 Restructuring Plan, we have realized overall cost reductions of $211 million as of December
28, 2003.
The following table summarizes activity under the 2001 Restructuring Plan through December 28, 2003:
Severance
and employee
benefits
Facility and
equipment
impairment
Facilities and
equipment
decommission
costs
Other
facilities
exit costs Total
(Thousands)
2001 provision $ 34,105 $ 39,000 $ 15,500 $ 700 $ 89,305
2001 cash charges (7,483) — — (54) (7,537)
2001 non-cash charges — (39,000) — — (39,000)
Accrual at December 30, 2001 26,622 — 15,500 646 42,768
2002 cash charges (26,622) — (445) — (27,067)
Accrual at December 29, 2002 — — 15,055 646 15,701
Non-cash adjustments — — (11,574) (646) (12,220)
Cash charges — — (2,485) — (2,485)
Accrual at December 28, 2003 $ — $ — $ 996 $ — $ 996
Interest income and other, net, of approximately $21 million in 2003 decreased 34 percent from $32 million in 2002. The decrease was primarily due to a
decrease in investment income of $16 million caused by lower cash equivalents and short-term investment balances and $2.3 million in charges in 2003 for
other-than-temporary declines in our equity investments. This decrease was offset by a gain of approximately $6 million based on the difference between the
carrying value and fair value of assets contributed by us to FASL LLC. Fujitsu now owns a 40 percent interest in these assets. The gain on the deemed sale of
these assets to FASL LLC was limited to the difference in carrying value of our interest in the assets following the completion of the transaction and the carrying
value of the assets immediately prior to the transaction.
Interest income and other, net, of $32 million increased $6 million or 23 percent in 2002 compared to $26 million in 2001. The increase was primarily due
to $4.7 million in charges for other-than-temporary declines in our equity investments as compared to $27 million in charges in 2001, offset by a decrease of $20
million in interest income as a result of lower interest rates on our investment portfolio and lower cash equivalents and short term investment balances.
Interest expense of $110 million in 2003 increased 55 percent compared to $71 million in 2002. The increase was due primarily to the effect of our 4.50%
Convertible Senior Notes due 2007 (4.50% Notes), issued in November 2002, which resulted in annual interest charges of $18 million, interest of $5 million on
$110 million drawn at the end of September 2002 under our July 2003 Loan Agreement, and the FASL LLC transaction, which resulted in additional interest
expense of approximately $9 million in 2003. In addition, in 2002 we capitalized interest of $10.7 million on continued expansion and facilitization of Fabs 25
and 30 compared to only $1.5 million in 2003.
Interest expense of $71 million in 2002 increased 16 percent compared to $61 million in 2001. The increase was due primarily to the effect of interest
expense incurred on our 4.75% Convertible Senior Debentures Due 2022 (4.75% Debentures), issued in January 2002, which resulted in interest charges of $22
million, partially offset by an increase in capitalized interest associated with conversion of Fab 25 to a Flash memory facility, facilitization activities at Fab 30,
and a decrease of $11 million in interest expense due to a partial repayment of the outstanding loans under the Dresden Loan Agreements in 2002.
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004