AMD 1995 Annual Report Download - page 235

notes
TO CONSOLIDATED FINANCIAL STATEMENTS
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Foreign currency options. The joint venture (FASL) investments are denominated
in yen, and therefore, are subject to exposure due to fluctuations in yen
exchange rates. Thus, the company hedges its exposures on certain firm
commitments relating to the FASL investment with foreign currency options
denominated in yen. The maturities of these options are generally less than six
months. No foreign currency options were outstanding as of December 31, 1995.
Interest rate swaps. The company engaged in interest rate swaps primarily to
reduce its interest rate exposure on its term loan and on a building lease
obligation by changing a portion of the company's interest rate obligation from
a floating rate to a fixed rate basis without exchanges of the underlying
notional amounts. The fixed interest rates are based on one to five year swap
rates, and the floating interest rates are based on three or six month LIBOR.
These interest rate swaps will mature in 1996 and 1997.
Fair value of financial instruments with off-balance-sheet risk. The estimates
of fair value were obtained using prevailing financial market information as of
December 31, 1995. In certain instances where judgment is required in estimating
fair value, price quotes were obtained from certain of the company's
counterparty financial institutions.
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Notional Carrying Fair Notional Carrying Fair
(Thousands) Amount Amount Value Amount Amount Value
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Interest rate
instruments:
Swaps $190,000 $(518) $(1,694) $40,000 $(518) $ 228
Foreign
exchange
instruments:
Foreign
exchange
forward
contracts 36,670 (102) (102) 32,651 536 536
Foreign
currency
options - - - 12,662 - (200)
Fair value of other financial instruments.
The carrying value of short-term debt approximates fair value due to its short-
term maturity. The fair value for long-term debt was estimated using discounted
cash flow analysis based on estimated interest rates for similar types of
borrowing arrangements.
The carrying amounts and estimated fair values of the company's other
financial instruments are as follows:
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Carrying Fair Carrying Fair
(Thousands) Amount Value Amount Value
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Short-term debt:
Notes payable $ 27,070 $ 27,070 $32,459 $32,459
Long-term debt
(excluding capital leases) 167,527 169,146 20,933 20,255
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Securities held-to-maturity and available-for-sale.
The following is a summary of held-to-maturity and
available-for-sale securities included in cash and cash equivalents and short-
term investments as of December 31, 1995 and December 25, 1994.
Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 1996