AMD 2000 Annual Report Download - page 405

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company did not sell any available-for-sale securities in 2000. The Company
realized a net gain on the sales of available-for-sale securities of $4.3
million for 1999.
Financial Instruments With Off-Balance-Sheet Risk
As part of the Company's asset and liability management strategy, AMD uses
financial instruments with off-balance-sheet risk to manage financial market
risk, including interest rate and foreign exchange risk. The notional amounts,
carrying amounts and fair values of these instruments as of December 31, 2000
and December 26, 1999 are included in the table below.
Notional Carrying Fair
(Thousands) amount amount value
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2000
Foreign exchange instruments:
Foreign currency forward contracts $207,170 $ (2,400) $(3,011)
Interest rate swap:
Reverse cancelable swap $400,000 $ 2,902 $ 2,902
1999
Foreign exchange instruments:
Foreign currency forward contracts $ 58,690 $ (102) $ (533)
The Company used prevailing financial market information and price quotes from
certain of its counterparty financial institutions as of the respective dates to
obtain the estimates of fair value.
Foreign Exchange Forward Contracts
The Company uses foreign exchange forward contracts to hedge the exposure to
currency fluctuations on its foreign currency exposures in its foreign sales
subsidiaries, liabilities for products purchased from FASL and fixed asset
purchase commitments. The hedging transactions in 2000 were denominated in
Italian lira, Japanese yen, French franc, German mark, British pound, Dutch
guilder, Thai baht, Singapore dollar, Swiss franc and European Union euro. The
maturities of these contracts were generally less than twelve months.
Foreign Currency Option Contracts
In 1998, the Company entered into an intercompany no-cost collar arrangement to
hedge Dresden Fab 30 project costs denominated in U.S. dollars. The no-cost
collars included purchased put option contracts and written call option
contracts, the contract rates of which were structured so as to avoid payment of
any option premium at the time of purchase. In March 1999, the Company entered
into various option positions with several third party banks to neutralize the
exposure of the outstanding put and call option contracts. As a result, all the
options were offset and canceled. As of December 31, 2000, there were no
outstanding foreign currency option contracts.
Interest Rate Swap Contract
The Company is a party to an interest rate swap under which it exchanges, at
specified intervals,
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001