AMD 2004 Annual Report Download - page 90

Table of Contents
The Company realized net gains from the sale of available-for-sale securities of $7.5 million in 2004, $3.7 million in 2003 and $5.3 million in 2002.
At December 26, 2004 and December 28, 2003, the Company had approximately $14 million and $12 million of investments classified as held to maturity,
consisting of commercial paper and treasury notes used for long-term workers’ compensation and leasehold deposits, that are included in other assets. The fair
market value of these investments approximates their cost at December 26, 2004 and December 28, 2003.
On November 2, 2004, AMD Saxony prepaid the full amount outstanding under the Dresden Term Loan plus accrued and unpaid interest and a
prepayment premium, and the Dresden Term Loan and related security agreements were terminated. The Company recognized a charge of approximately $14
million (included in interest income and other, net) associated with the prepayment of the Dresden Term Loan, which included the pre-payment premium of
approximately $8.5 million and write-off of remaining capitalized financing costs of approximately $5.3 million.
Due to our repayment of amounts outstanding under the Dresden Term Loan on November 2, 2004 and the related termination of the Dresden Loan
Agreements effective December 23, 2004, we are no longer required to maintain a compensating cash balance. Therefore, as of December 26, 2004, the
Company’s compensating cash balance was zero as compared to $218 million as of December 28, 2003.
Fair Value of Other Financial Instruments. The fair value of the Company’s long-term debt is estimated based on the quoted market prices for the same
or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The carrying amounts and estimated fair values of the
Company’s debt instruments are as follows:
2004 2003
Carrying
amount
Estimated
Fair Value
Carrying
amount
Estimated
Fair Value
(in thousands)
Long-term debt and capital leases:
Capital leases $ 184,853 $ 183,406 $ 245,958 $ 244,641
Long-term debt (excluding capital leases) 1,674,243 2,172,113 1,846,982 1,846,982
Total long-term debt and capital leases 1,859,096 2,355,519 2,092,940 2,091,623
Less: current portion 230,828 230,855 193,266 192,725
Total long-term debt and capital leases, less current portion $ 1,628,268 $ 2,124,664 $ 1,899,674 $ 1,898,898
The fair value of the Company’s accounts receivable and accounts payable approximate carrying value based on existing payment terms.
NOTE 5: Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term investments,
trade receivables and derivative financial instruments used in hedging activities.
The Company places its cash equivalents and short-term investments with high credit quality financial institutions and, by policy, limits the amount of
credit exposure with any one financial institution. The Company invests in time deposits and certificates of deposit from banks having combined capital, surplus
and undistributed profits of not less than $200 million. Investments in commercial paper and money market auction rate preferred stocks of industrial firms and
financial institutions are rated AI, PI or better. Investments in tax-exempt securities, including municipal notes and bonds, are rated AA, Aa or better, and
investments in repurchase agreements must have securities of the type and quality listed above as collateral.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005