AMD 2009 Annual Report Download - page 118

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GF Class A Subordinated Convertible Notes
In connection with the closing of the GF manufacturing joint venture transaction, GF issued $202 million
aggregate principal amount of 4% Class A Subordinated Convertible Notes to ATIC for cash. In July 2009, GF
issued $52 million of Class A Notes to ATIC for cash, pursuant to the terms of the Funding Agreement (See
Note 3, GLOBALFOUNDRIES, for additional information).
The Class A Notes accrue interest at a rate of 4% per annum, compounded semiannually, and mature on
March 2, 2019. Interest on the Class A Notes is payable semiannually in additional Class A Notes. The Class A
Notes are the unsecured obligations of GF and rank subordinated in right of payment to any current or future
senior indebtedness of GF. The Class A Notes are not redeemable by GF without the note holder’s consent. The
Class A Notes are convertible, in whole or in part, in multiples of $1,000, into GF Class A Preferred Shares at the
option of the holder at any time prior to the close of business on the business day immediately preceding the
maturity date based on the conversion ratio in effect on the date of conversion. The Class A Notes will
automatically convert into Class A Preferred Shares upon the earlier of (i) a GF IPO, (ii) certain change of
control transactions of GF or (iii) the close of business on the business day immediately preceding the maturity
date.
GF Class B Subordinated Convertible Notes
In connection with the closing of the GF manufacturing joint venture transaction, GF issued $807 million
aggregate principal amount of 11% Class B Subordinated Convertible Notes to ATIC for cash. In July 2009, GF
issued $208 million of Class B Notes to ATIC for cash, pursuant to the terms of the Funding Agreement (See
Note 3, GLOBALFOUNDRIES, for additional information).
The Class B Notes accrue interest at a rate of 11% per annum, compounded semiannually, and mature on
March 2, 2019. Interest on the Class B Notes is payable semiannually in additional Class B Notes. The Class B
Notes are the unsecured obligations of GF and rank subordinated in right of payment to any current or future
senior indebtedness of GF. The Class B Notes are not redeemable by GF without the note holder’s consent. The
Class B Notes are convertible, in whole or in part, in multiples of $1,000, into GF Class B Preferred Shares at the
option of the holder at any time prior to the close of business on the business day immediately preceding the
maturity date at the conversion ratio in effect on the date of conversion. The Class B Notes will automatically
convert into GF Class B Preferred Shares upon the earlier of (i) a GF IPO, (ii) certain change of control
transactions of GF or (iii) the close of business on the business day immediately preceding the maturity date.
Capital Lease Obligations
As of December 26, 2009, the Company had aggregate outstanding capital lease obligations of $256 million.
Included in this amount is $225 million of GF’s obligations under certain energy supply contracts for its wafer
fabrication facilities in Dresden, Germany. Certain fixed payments due under these energy supply arrangements
are accounted for as capital leases.The capital lease obligations under the energy supply arrangements are
payable in monthly installments through 2020.
The gross amount of assets recorded under capital leases totaled approximately $249 million and $213
million as of December 26, 2009 and December 27, 2008, and are included in the related property, plant and
equipment category. Amortization of assets recorded under capital leases is included in depreciation expense.
Accumulated amortization of these leased assets was approximately $69 million and $49 million as of
December 26, 2009 and December 27, 2008 respectively.
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