AMD 2002 Annual Report Download - page 68

Table of Contents
$155 million to be secured by certain property, plant and equipment located at the Company’s Fab 25 semiconductor manufacturing facility in Austin, Texas.
Amounts borrowed under the September 2002 Loan Agreement bear interest at a variable rate of LIBOR plus four percent, which was 5.8 percent at December
29, 2002. Repayment occurs in equal, consecutive, quarterly principal and interest installments ending in September 2006. As of December 29, 2002, $110
million was outstanding under the September 2002 Loan Agreement. The Company must also comply with certain financial covenants if the Company’s net
domestic cash balance (as defined in the September 2002 Loan Agreement) drops below $300 million. The September 2002 Loan Agreement restricts the
Company’s ability to pay cash dividends on its common stock if its level of net domestic cash declines below $300 million. At December 29, 2002, net domestic
cash, as defined, totaled $718 million.
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 29, 2002, the Company was in compliance with all restrictive covenants of such debt agreements.
The gross amount of assets recorded under capital leases totaled approximately $109 million and $92 million as of December 29, 2002 and December 30,
2001, and are included in the related property, plant and equipment category. Amortization of assets recorded under capital leases is included in depreciation
expense. Accumulated amortization of these leased assets was approximately $74 million and $47 million as of December 29, 2002 and December 30, 2001.
Included in other long-term liabilities is $208 million of deferred grants and subsidies related to the Fab 30 project. (See Notes 2 and 12.) Also included in
other long-term liabilities is a deferred gain of $27 million as of December 29, 2002, as a result of the sale and leaseback of the Company’s corporate marketing,
general and administrative facility in Sunnyvale, California in 1998. The Company is amortizing the deferred gain ratably over the lease term, which is 20 years.
(See Note 12.) In addition, other long-term liabilities include $64.5 million in customer cash deposits related to multi-year memory product supply agreements,
which guarantee customers’ specific volume purchases.
Under certain circumstances, cross-defaults result under the July 1999 Loan Agreement, the Dresden Loan Agreements, the September 2002 Loan
Agreement, the 4.75% Debentures and the 4.50% Notes.
For each of the next five years and beyond, the Company’s debt and capital lease obligations are:
Long-term debt
(Principal only) Capital leases Total
(Thousands)
2003 $ 58,439 $ 18,381 $ 76,820
2004 58,752 16,897 75,649
2005 308,773 5,970 314,743
2006 271,270 3,298 274,568
2007 402,500 — 402,500
Beyond 2007 500,000 — 500,000
Total 1,599,734 44,546 1,644,280
Less: amount representing interest — 4,225 4,225
Total at present value $ 1,599,734 $ 40,321 $ 1,640,055
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003