AMD 2003 Annual Report Download - page 45

Table of Contents
Guarantees of Indebtedness not Recorded on Our Consolidated Balance Sheets
The following table summarizes the principal guarantees issued as of December 28, 2003 for which the related underlying liabilities are not recorded on
our consolidated balance sheets as of December 28, 2003 and their expected expiration dates:
Amounts of guarantee expiration per period
Amounts
Guaranteed* 2004 2005 2006 2007 2008
2009 and
Beyond
(In Thousands)
FASL LLC operating lease guarantees $ 26,604 $ 12,279 $ 8,367 $ 5,958 $ — $ — $ —
AMTC payment guarantee 39,793 — — — 39,793 — —
AMTC term loan guarantee 31,088 31,088 — — — — —
AMTC rental guarantee 145,811 — — — — — 145,811**
Total guarantee $ 243,296 $ 43,367 $ 8,367 $ 5,958 $ 39,793 $ — $ 145,811
* Amounts guaranteed represent the principal amount of the underlying obligations and are exclusive of obligations for interest, fees and expenses.
** Amounts outstanding will diminish until the expiration of the guarantee.
We have not recorded any liability in our consolidated financial statements associated with the guarantees because they were issued prior to the effective date of
FIN 45.
FASL LLC Operating Lease Guarantees
We guaranteed certain operating leases entered into by FASL LLC and its subsidiaries totaling approximately $27 million as of December 28, 2003. The
amounts guaranteed are reduced by the actual amount of lease payments paid by FASL LLC over the lease terms.
AMTC and BAC Guarantees
The Advanced Mask Technology Center GmbH & Co. KG (AMTC) and Maskhouse Building Administration GmbH & Co., KG (BAC) are joint ventures
formed by us, Infineon Technologies AG and DuPont Photomasks, Inc. for the purpose of constructing and operating a new advanced photomask facility in
Dresden, Germany. To finance the project, BAC and AMTC entered into a $149 million revolving credit facility and a $93 million term loan in December 2002.
Also in December 2002, in order to occupy the photomask facility, AMTC entered into a rental agreement with BAC. With regard to these commitments by BAC
and AMTC, we guaranteed up to approximately $31 million plus interest and expenses under the term loan, up to approximately $40 million plus interest and
expenses under the revolving loan, and up to approximately $17 million, initially, under the rental agreement. The obligations under the rental agreement
guarantee diminish over time through 2011 as the term loan is repaid. However, under certain circumstances of default by the other tenant of the photomask
facility under its rental agreement with BAC and certain circumstances of default by more than one joint venture partner under its rental agreement guarantee
obligations, the maximum potential amount of our obligations under the rental agreement guarantee is approximately $146 million. As of December 28, 2003,
$73 million was drawn under the revolving credit facility, and $81 million was drawn under the term loan. These borrowings are subject to the aforementioned
guarantees except that our guarantee obligations with respect to the term loan terminated in February 2004 because the AMTC occupied the photomask facility
under the rental agreement during 2003 and the rental guarantee replaced the term loan guarantee.
Other Financial Matters
Fab 36. A significant amount of the costs of the Fab 36 project are denominated in euro. We used the exchange rate of 0.804 euro to one U.S. dollar as
of December 28, 2003 to translate the amounts set forth below into U.S. dollars. We expect that over the next four years capital expenditures for Fab 36 will be
approximately
40
Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004