AMD 2004 Annual Report Download - page 94

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• maintain an adjusted tangible net worth (as defined in the revolving credit facility) as follows:
Measurement Date Amount
(in millions)
Last day of each fiscal quarter in 2004 $ 1,425
Last day of each fiscal quarter in 2005 $ 1,850
Last day of each fiscal quarter thereafter $ 2,000
• achieve EBITDA (earnings before interest, taxes, depreciation and amortization) according to the following schedule:
Period Amount
(in millions)
Four fiscal quarters ending December 31, 2004 $ 950
Four fiscal quarters ending March 31, 2005 and on each fiscal quarter thereafter $ 1,050
As of December 26, 2004, net domestic cash, as defined, totaled $831 million and the preceding financial covenants were not applicable. The Company’s
obligations under the revolving credit facility are secured by all of its accounts receivable, inventory, general intangibles (excluding intellectual property) and the
related proceeds, excluding Spansion LLC’s accounts receivable, inventory and general intangibles.
Spansion Japan Revolving Loan Agreement
In March 2004, Spansion Japan Limited, a subsidiary of Spansion LLC, entered into a revolving credit facility agreement with certain Japanese financial
institutions in the aggregate amount of 15 billion yen (approximately $145 million as of December 26, 2004). Spansion Japan can draw under the facility until
March 24, 2005.
The revolving facility consists of two tranches: tranche A, in the aggregate amount of up to nine billion yen (approximately $87 million as of December
26, 2004), and tranche B, in the aggregate amount of up to six billion yen (approximately $58 million as of December 26, 2004). However, as described in more
detail below, the total amount that Spansion Japan can draw is limited based on the value of Spansion Japan’s accounts receivable from Fujitsu, which are
pledged as security to the lenders. As of December 26, 2004, there were no borrowings outstanding under this facility.
Amounts borrowed under tranche A bear interest at a rate of TIBOR plus 0.55 percent. Amounts borrowed under tranche B bear interest at a rate of
TIBOR plus 1.2 percent. Spansion Japan must first fully draw under tranche A before drawing amounts under tranche B. Borrowings must be used for working
capital purposes and must be repaid no later than April 24, 2005.
Pursuant to the terms of the revolving facility agreement, Spansion Japan is required to comply with the following financial covenants:
• ensure that assets exceed liabilities as of the end of each fiscal year and each six-month (mid-year) period;
• maintain an adjusted tangible net worth (as defined in the agreement) at an amount not less than 60 billion yen (approximately $579 million as of
December 26, 2004) as of the last day of each fiscal quarter;
• maintain total net income plus depreciation of $213 million as of the last day of fiscal year 2004; and
• ensure that, as of the last day of each of the third and fourth quarter of 2004, the ratio of (a) net income plus depreciation to (b) the sum of interest
expenses plus the amount of scheduled debt repayments plus capital expenditures for its facilities located in Aizu-Wakamatsu, Japan, for such period, is
not less than 120%.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005