AMD 2004 Annual Report Download - page 49

Table of Contents
• maintain total net income plus depreciation, as of the last day of each fiscal period, as follows:
Period Amount
(in millions)
Fiscal year 2004 $ 221
Fiscal year 2005 $ 204
Fiscal year 2006 $ 188
• ensure that as of the last day of any fiscal quarter, the ratio of (a) net income plus depreciation to (b) the sum of (i) interest expense for such period plus
(ii) scheduled amortization of debt for borrowed money (as defined in the loan agreement) for such period, including lease rentals plus (iii) maintenance
capital expenditures for Spansion Japan’s existing and after acquired real property and improvements at its manufacturing facilities located in
Aizu-Wakamatsu, Japan, is not less than:
Period Percentage
Third and fourth fiscal quarters of 2004 120%
Fiscal year 2005 120%
Fiscal year 2006 120%
As of December 26, 2004, Spansion Japan was in compliance with these financial covenants.
Because most amounts under the Spansion Japan Term Loan are denominated in yen, the dollar amounts are subject to change based on applicable
exchange rates. We used the exchange rate as of December 26, 2004 of 103.62 yen to one U.S. dollar to translate the amounts denominated in yen into U.S.
dollars.
Fujitsu Cash Note
As a result of the Spansion transaction, Fujitsu loaned $40 million to Spansion pursuant to a promissory note. The note bears an interest rate of LIBOR
plus four percent, which was 5.98 percent as of December 26, 2004, and has a term of three years. The interest rate cannot exceed seven percent. The note is
repayable in four equal payments on September 30, 2005, December 31, 2005, March 31, 2006 and June 30, 2006. Interest is payable quarterly.
AMD Penang Term Loan
On January 29, 2004, our subsidiary in Malaysia, AMD Export Sdn. Bhd., or AMD Penang, entered into a term loan agreement with a local financial
institution. Under the terms of the loan agreement, AMD Penang can borrow up to 30 million Malaysian Ringgit (approximately $8 million as of December 26,
2004) in order to fund the purchase of equipment. The loan bears a fixed annual interest rate of 5.9 percent and is payable in equal, consecutive, monthly
principal and interest installments through February 2009. The total amount outstanding as of December 26, 2004 was approximately $6 million.
Spansion China Loan
During the second quarter of 2004, Spansion (China) Limited, a subsidiary of Spansion, entered into two revolving loan agreements with a local financial
institution. Under the terms of the revolving foreign exchange loan agreement, Spansion China can borrow in U.S. dollars up to an amount of $18 million. Under
the terms of the revolving Renminbi (RMB) loan agreement, Spansion China can borrow up to RMB 120 million (approximately $14.5 million as of December
26, 2004). The interest rate on the U.S. dollar denominated loans is LIBOR plus one percent and the interest rate on the RMB denominated loans is fixed at 4.779
percent. The maximum term of each loan is 12 months from the date of each drawdown. As of December 26, 2004, Spansion China had fully drawn on the loans.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005