AMD 2003 Annual Report Download - page 83

Table of Contents
NOTE 7: Debt
Notes Payable
On July 7, 2003, the Company amended and restated its 1999 Loan and Security Agreement with a consortium of banks led by a domestic financial
institution (the July 2003 Loan Agreement). The Company further amended the July 2003 Loan Agreement on October 3, 2003. The July 2003 Loan Agreement
currently provides for a secured revolving line of credit of up to $125 million that expires in July 2007. The Company can borrow, subject to amounts set aside
by the lenders, up to 85 percent of its eligible accounts receivable from OEMs and 50 percent of its eligible accounts receivable from distributors. The Company
has to comply, among other things, with the following financial covenants if net domestic cash (as defined in the July 2003 Loan Agreement) declines below
$125 million:
• restrictions on its ability to pay cash dividends on its common stock;
• maintain an adjusted tangible net worth (as defined in the July 2003 Loan Agreement) as follows:
Measurement Date Amount
December 31, 2003 $1.25 billion
Last day of each calendar quarter in 2004 $1.425 billion
Last day of each calendar quarter in 2005 $1.85 billion
March 31, 2006 and on the last day of each fiscal quarter thereafter $2.0 billion
• achieve EBITDA (earnings before interest, taxes, depreciation and amortization) according to the following schedule:
Period Amount
Four fiscal quarters ending December 31, 2003 $400 million
Four fiscal quarters ending March 31, 2004 $550 million
Four fiscal quarters ending June 30, 2004 $750 million
Four fiscal quarters ending September 30, 2004 $850 million
Four fiscal quarters ending December 31, 2004 $950 million
Four fiscal quarters ending March 31, 2005 and on each fiscal quarter thereafter $1,050 million
As of December 28, 2003, net domestic cash, as defined, totaled $567 million and the preceding financial covenants were not applicable.
The Company’s obligations under the July 2003 Loan Agreement are secured by all of its accounts receivable, inventory, general intangibles (excluding
intellectual property) and the related proceeds, excluding FASL LLC’s accounts receivable, inventory and general intangibles. As of December 28, 2003, no
amount was outstanding under the July 2003 Loan Agreement.
Interest rates on foreign and short-term domestic borrowings are negotiated at the time of borrowing.
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004