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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 20: Borrowings
Short
-Term Debt
Short-term debt included the current portion of long-term debt of $157 million and drafts payable of $15 million as of
December 26, 2009 (drafts payable of $100 million and the current portion of long-
term debt of $2 million as of December 27,
2008). We have an ongoing authorization from our Board of Directors to borrow up to $3.0 billion, including through the
issuance of commercial paper. Maximum borrowings under our commercial paper program during 2009 were $610 million.
We did not have outstanding commercial paper as of December 26, 2009 and December 27, 2008. Maximum borrowings
under our commercial paper program during 2008 were $1.3 billion. Our commercial paper was rated A-1+ by Standard &
Poor’s and P-1 by Moody’s as of December 26, 2009.
Long
-Term Debt
Our long-term debt as of December 26, 2009 and December 27, 2008 was as follows:
Convertible Debentures
In 2005, we issued $1.6 billion of junior subordinated convertible debentures (the 2005 debentures) due in 2035. In 2009, we
issued $2.0 billion of junior subordinated convertible debentures (the 2009 debentures) due in 2039. Both the 2005 and 2009
debentures pay a fixed rate of interest semiannually. We capitalized all interest associated with these debentures during the
periods presented.
84
(In Millions)
2009
2008
1
2009 junior subordinated convertible debentures due 2039 at 3.25%
$
1,030
$
—
2005 junior subordinated convertible debentures due 2035 at 2.95%
896
886
2005 Arizona bonds due 2035 at 4.375%
157
158
2007 Arizona bonds due 2037 at 5.3%
123
122
Other debt
—
2,206
1,187
Less:
current portion of long
-
term debt
(157
)
(2
)
Total long
-
term debt
$
2,049
$
1,185
1
As adjusted due to changes to the accounting for convertible debt instruments. See
“
Note 3: Accounting Changes.
”
2005 Debentures
2009 Debentures
Coupon interest rate
2.95
%
3.25
%
Effective interest rate
1
6.45
%
7.20
%
Maximum amount of contingent interest that will accrue per year
2
0.40
%
0.50
%
1
The effective rate is based on the rate for a similar instrument that does not have a conversion feature.
2
Both the 2005 and 2009 debentures have a contingent interest component that will require us to pay interest based on
certain thresholds and for certain events commencing on December 15, 2010 and August 1, 2019, for the 2005 and
2009 debentures, respectively, as outlined in the indentures governing the 2005 and 2009 debentures. The fair value of
the related embedded derivative was $24 million and $15 million as of December 26, 2009 for the 2005 and 2009
debentures, respectively ($36 million as of December 27, 2008 for the 2005 debentures).