AMD 2005 Annual Report Download - page 103

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Table of Contents
NOTE 8: Debt
Long-term Borrowings and Obligations
The Company’s long-term debt and capital lease obligations as of December 25, 2005 and December 26, 2004 consist of:
2005 2004
(In thousands)
4.75% Convertible Senior Debentures Due 2022 $ 500,000 $ 500,000
4.50% Convertible Senior Notes Due 2007 — 201,500
7.75% Senior Notes Due 2012 600,000 600,000
Repurchase Obligations to Fab 36 Partners 151,924 121,931
AMD Penang Debt 4,831 6,325
Obligations under capital leases 113,534 184,853
July 2003 Spansion Term Loan — 44,599
Spansion Japan Term Loan — 127,389
Fujitsu Cash Note (see Note 4) — 40,000
Spansion China Loan — 32,499
1,370,289 1,859,096
Less: current portion 43,224 230,828
Less: Fujitsu cash note — 30,000
Long-term debt and capital lease obligations, less current portion $ 1,327,065 $ 1,598,268
4.75% Convertible Senior Debentures Due 2022
On January 29, 2002, the Company issued $500 million of its 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 August 1, 2008, August 1, 2011 and August 1, 2016 to a rate 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 its 4.75% Debentures on February 1, 2009, February 1, 2012,
and February 1, 2017. The holders of the 4.75% Debentures 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 stock at a conversion price of $23.38 per share at any time. At this conversion price, each $1,000 principal amount of the 4.75% Debentures
will be convertible into approximately 43 shares of the Company’s common stock. Issuance costs incurred in the amount of approximately $14 million are
amortized ratably, which approximates the effective interest method, over the term of the 4.75% Debentures, as interest expense.
As of February 5, 2005, the 4.75% Debentures were redeemable by the Company for cash at its option at specified prices expressed as a percentage of the
outstanding principal amount plus accrued and unpaid interest, provided that the Company could not redeem the 4.75% Debentures prior to February 5, 2006,
unless the last reported sale price of its common stock is at least 130 percent of the then-effective conversion price for at least 20 trading days within a period of
30 consecutive trading days ending within five trading days of the date of the redemption notice. (See Note 17).
98
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006