AMD 2002 Annual Report Download - page 66

Table of Contents
which provides for a four-year secured revolving line of credit of up to $200 million, the Company can borrow, subject to amounts which may be set aside by the
lenders, up to 85 percent of its eligible accounts receivable from Original Equipment Manufacturers (OEMs) and 50 percent of its eligible accounts receivable
from distributors. The Company must comply with certain financial covenants if the level of net domestic cash (as defined in the July 1999 Loan Agreement) it
holds declines below $200 million or the amount of borrowing under the Loan Agreement rises to 50 percent of available credit. At December 29, 2002, net
domestic cash, as defined, totaled $718 million. The July 1999 Loan Agreement restricts the Company’s ability to pay cash dividends if the level of net cash it
holds declines below $200 million. The Company’s obligations under the July 1999 Loan Agreement are secured by a pledge of all of its accounts receivable,
inventory, general intangibles and the related proceeds. As of December 29, 2002, there was no amount outstanding under the July 1999 Loan Agreement.
The Company’s subsidiaries have lines of credit totaling approximately $18 million. As of December 29, 2002, the amount outstanding under these lines
of credit was approximately $1 million. The weighted-average interest rate on the amounts outstanding at year-end was 5.26%.
Interest rates on foreign and short-term domestic borrowings are negotiated at the time of borrowing.
The Company’s long-term debt, capital lease obligations and other long-term liabilities as of the years ended 2002 and 2001 consist of:
2002 2001
(Thousands)
4.75% Convertible Senior Debentures due 2022 $ 500,000 $ —
4.50% Convertible Senior Notes due 2007 402,500 —
Term loan under the September 2002 Loan Agreement 110,000 —
Term loan under the Dresden Loan Agreement with a weighted-average interest
rate of 5.40 percent and principal due between June 2001 and December 2005,
secured by the Fab 30 facility and equipment (see Note 12) 587,234 602,046
Obligations under capital leases 40,321 32,469
Commercial Mortgage — 1,190
1,640,055 635,705
Other long-term liabilities 300,558 305,576
1,940,613 941,281
Less: current portion 160,776 268,336
Long-term debt, capital lease obligations and other long-term liabilities, less
current portion $ 1,779,837 $ 672,945
On January 29, 2002, the Company issued $500 million of the Company’s 4.75% Convertible Senior Debentures Due 2022 (the 4.75% Debentures) in a
private offering pursuant to Rule 144A and Regulation S of the Securities Act.
The interest rate payable on the 4.75% Debentures will reset on each of August 1, 2008, August 1, 2011 and August 1, 2016 to a rate per annum equal to
the interest rate payable 120 days prior to the reset dates on 5-year U.S. Treasury Notes, plus 43 basis points. The interest rate will not be less than 4.75 percent
and will not exceed 6.75 percent. Holders have the right to require the Company to repurchase all or a portion of the Company’s 4.75% Debentures on February
1, 2009, February 1, 2012, and February 1, 2017. The holders of the 4.75% Debentures will also have the ability to require the Company to repurchase the 4.75%
Debentures in the event that the Company undergoes specified fundamental changes, including a change of control. In each such case, the redemption or
repurchase price would be 100 percent of the principal amount of the 4.75% Debentures plus accrued and unpaid interest. The 4.75% Debentures are convertible
by the holders into the Company’s common
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003