AMD 1999 Annual Report Download - page 160

general intangibles and the related proceeds. As of December 26, 1999, the
Company had not borrowed any funds under the Loan Agreement.
In May 1998, the Company sold $517.5 million of Convertible Subordinated Notes
due May 15, 2005 under its $1 billion shelf registration declared effective by
the Securities and Exchange Commission on April 20, 1998. Interest on the
Convertible Subordinated Notes accrues at the rate of six percent per annum and
is payable semiannually in arrears on May 15 and November 15 of each year,
commencing November 15, 1998. The Convertible Subordinated Notes are redeemable
at the Company's option on and after May 15, 2001. The Notes are convertible at
the option of the holder at any time prior to the close of business on the
maturity date, unless previously redeemed or repurchased, into shares of common
stock at a conversion price of $37.00 per share, subject to adjustment in
certain circumstances.
Included in other is $221 million of deferred grants and subsidies related to
the Dresden Fab 30 project. See Note 2. Also included in other is a deferred
gain of $32 million as of December 26, 1999, as a result of the sale and
leaseback of the Company's corporate marketing, general and administrative
facility in 1998. The Company is amortizing the deferred gain ratably over the
lease term, which is 20 years. See Note 12.
For each of the next five years and beyond, the Company's long-term debt and
capital lease obligations are:
Long-term debt Capital
(Thousands) (Principal only) leases
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2000 $ 5,127 $13,756
2001 46,517 9,352
2002 154,684 4,197
2003 456,853 3,374
2004 13,097 916
Beyond 2004 517,959 --
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Total 1,194,237 31,595
Less: amount representing interest -- (3,790)
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Total at present value $1,194,237 $27,805
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Obligations under the lease agreements are collateralized by the assets leased.
The Company leased assets totaling approximately $64 million and $97 million as
of December 26, 1999 and December 27, 1998, respectively. Accumulated
amortization of these leased assets was approximately $39 million and $60
million as of December 26, 1999 and December 27, 1998, respectively.
The above debt agreements limit the Company and its subsidiaries' ability to
engage in various transactions and require satisfaction of specified financial
performance criteria. As of December 26, 1999, the Company was 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 for 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) 1999 1998 1997
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Total interest charges $116,255 $ 96,206 $ 74,716
Less: interest capitalized (47,002) (29,712) (29,440)
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Interest expense $ 69,253 $ 66,494 $ 45,276
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In 1999 and 1998, interest expense primarily consisted of interest incurred on
the Company's Senior Secured Notes sold in August 1996, interest on the
Company's Convertible Subordinated Notes sold in May 1998 and interest on the
Company's $250 million four-year secured term loan, net of interest capitalized
primarily related to the facilitization of Fab 25 and Fab 30. In 1997, interest
expense primarily consisted of interest expense incurred on the Company's Senior
Secured Notes sold in August 1996 and interest on the Company's $250 million
four-year secured term loan, net of interest capitalized primarily related to
Source: ADVANCED MICRO DEVIC, 10-K405, March 21, 2000