AMD 1999 Annual Report Download - page 131

1999 1998
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(Thousands) 2000 2001 2002 2003 2004 Thereafter Total Fair value Total
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Cash equivalents
Fixed rate amounts $ 19,505 -- -- -- -- -- $ 19,505 $ 19,484 $ 22,434
Average rate 5.40% -- -- -- --
Variable rate amounts $143,000 -- -- -- -- -- $ 143,000 $ 143,000 $ 136,408
Average rate 5.36% -- -- -- --
Short-term investments
Fixed rate amounts $175,004 -- -- -- -- -- $ 175,004 $ 175,686 $ 219,085
Average rate 5.57% -- -- -- --
Variable rate amounts $126,700 -- -- -- -- -- $ 126,700 $ 126,700 $ 115,500
Average rate 6.58% -- -- -- --
Long-term investments
Equity investments -- $ 6,161 -- -- -- -- $ 6,161 $ 28,175 $ 7,027
Fixed rate amounts -- $ 1,907 -- -- -- -- $ 1,907 $ 1,875 $ 2,000
Average rate 4.93% -- -- -- --
Total investments
Securities $464,209 $ 8,068 -- -- -- -- $ 472,277 $ 494,920 $ 502,454
Average rate 5.77% 4.93% -- -- -- --
Notes payable
Fixed rate amounts -- -- -- -- -- -- -- -- $ 6,017
Long-term debt
Fixed rate amounts $ 5,127 $46,517 $154,684 $456,853 $13,097 $517,959 $1,194,237 $1,128,919 $1,218,836
Average rate 9.88% 5.41% 5.40% 10.30% 5.47% 6.00%
Variable rate amounts -- -- -- -- -- -- 218,750
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Foreign Exchange Risk We use foreign currency forward and option contracts to
reduce our exposure to currency fluctuations on our foreign currency exposures
in our foreign sales subsidiaries, liabilities for products purchased from FASL
and for fixed asset purchase commitments. The objective of these contracts is to
minimize the impact of foreign currency exchange rate movements on our operating
results and on the cost of capital asset acquisition. Our accounting policy for
these instruments is based on our designation of such instruments as hedging
transactions. We do not use derivative financial instruments for speculative or
trading purposes.
We had $59 million (notional amount) of short-term foreign currency forward
contracts denominated in Japanese yen, British pound, Swiss franc, European
Union euro, Singapore dollar and Thai baht outstanding as of December 26, 1999.
In 1998, we entered into an intercompany no-cost collar agreement to hedge
Dresden Fab 30 project costs denominated in U.S. dollars. The no-cost collars
included purchased put option contracts and no-cost collar written call option
contracts, the contract rates of which were structured to avoid payment of any
option premium at the time of purchase. During 1999, we entered into various
option positions with various third-party banks to neutralize the exposures of
the outstanding put and call option contracts. As a result, all the options were
offset and canceled and we had no outstanding option contracts as of December
26, 1999.
In 1999, the $75 million foreign currency call option contracts remaining
from the $150 million call option contracts purchased in 1997 to hedge our
obligations to provide loans to, or invest equity in, AMD Saxony also expired.
Gains and losses related to the foreign currency forward and option
contracts for the year ended December 26, 1999 were not material. We do not
anticipate any material adverse effect on our consolidated financial position,
results of operations or cash flows resulting from the use of these instruments
in the future. We cannot give any assurance that these strategies will be
effective or that transaction losses can be minimized or forecasted accurately.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 2000