AMD 1998 Annual Report Download - page 243

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Obligations under the lease agreements are collateralized by the assets leased.
We leased total assets of approximately $97 million and $138 million at
December 27, 1998 and December 28, 1997, respectively. Accumulated amortization
of these leased assets was approximately $60 million and $85 million at December
27, 1998 and December 28, 1997, respectively.
The above debt agreements limit our and our subsidiaries' ability to engage in
various transactions and require satisfaction of specified financial performance
criteria.
At December 27, 1998, we were in compliance with all restrictive covenants of
such debt agreements and all retained earnings were restricted as to payments of
cash dividends on common stock.
Under certain circumstances, cross-defaults result under the Convertible
Subordinated Notes, the Indenture to the Senior Secured Notes and the Dresden
Loan Agreements, which consist of a loan agreement and other related agreements
between AMD Saxony and a consortium of banks led by Dresdner Bank AG.
- --------------------------------------------------------------------------------
NOTE 8. INTEREST EXPENSE & INTEREST INCOME AND OTHER, NET
INTEREST EXPENSE
(Thousands) 1998 1997 1996
- --------------------------------------------------------------------------------
Total interest charges $ 96,206 $ 74,716 $ 32,507
Interest capitalized (29,712) (29,440) (17,670)
---------------------------------
Interest expense $ 66,494 $ 45,276 $ 14,837
=================================
In 1998, interest expense primarily consisted of interest expense incurred on
our Senior Secured Notes sold in August 1996, interest on our Convertible
Subordinated Notes sold in May 1998 and interest on our $250 million four-year
secured term loan, net of interest capitalized primarily related to the
facilitization of Fab 25 and construction of Dresden Fab 30. In 1997, interest
expense primarily consisted of interest expense incurred on our Senior Secured
Notes sold in August 1996 and interest on our $250 million four-year secured
term loan, net of interest capitalized primarily related to the second phase of
construction of Fab 25 and Dresden Fab 30. In 1996, interest expense primarily
consisted of interest expense incurred on our Senior Secured Notes sold in
August 1996, net of interest capitalized primarily related to equipment
installation in Fab 25.
INTEREST INCOME AND OTHER, NET
(Thousands) 1998 1997 1996
- -------------------------------------------------------------------------------
Interest income $31,478 $28,975 $19,564
Other income, net 2,729 6,122 39,827
---------------------------
$34,207 $35,097 $59,391
===========================
In 1998, other income, net primarily consisted of gains resulting from the sale
of an investment. Other income, net primarily consisted of gains resulting from
the sales of equity investments for 1997 and 1996. We also included the net loss
on the sale of fixed assets in other income, net for all years presented.
Source: ADVANCED MICRO DEVIC, 10-K, March 29, 1999