D-Link 2005 Annual Report Download - page 46
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
In 2005 and 2004, convertible bonds amounting to $32,520 thousand and $355,068 thousand,
respectively, were converted. The excess of the conversion price over the par value of the
certificates for conversion of the convertible bonds issued amounted to $20,682 thousand
and $229,953 thousand as of December 31, 2005 and 2004, respectively, and was included in
capital surplus in the accompanying consolidated balance sheets.
(i) Long-term Debts and Lease Obligations Payable
(1) Long-term debts
Bank Credit Line and December 31,
Purpose Period and Redemption 2005 2004
Chiao
Tung
Bank
$600 million for
the redemption of
convertible bonds
Due by March 26, 2005; the
principal will be paid in 3 half-
yearly installments starting from
March 26, 2002
$ - 200,000
Less: current portion of long-term debts - (200,000)
$ - -
Rate -
5.20%
D-Link agreed to maintain a current ratio (current assets/current liabilities) over 150% and a
debt ratio (liabilities/equities) lower than 100% during the outstanding period of the long-
term debt. These financial ratios should be determined based on D-Link’s audited financial
statements. If D-link could not keep the financial ratios, Chiao Tung Bank could change
the rate to the prime loan rate. The long-term debts were fully repaid in March 2005.
(2) Lease obligations payable
December 31,
2005 2004
Lease obligations payable $ 16,987 25,527
Less: current portion of lease payable (5,938) (3,783)
$ 11,049 21,744
In accordance with the agreement, D-Link Systems issued some notes payable to the leasing
company. The par value of the unpaid notes as of December 31, 2005, is summarized
below:
Year ending December 31,
2006 $ 6,012
2007 3,778
2008 3,558
2009 3,558
2010 and after 2,965
$ 19,871