AMD 2005 Annual Report Download - page 124

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Table of Contents
other parties have assumed most of the foreseeable costs as well as the primary role in conducting remediation activities under the orders. The Company remains
responsible for additional costs beyond the scope of the agreements as well as all remaining costs in the event that the other parties do not fulfill their obligations
under the settlement agreements.
To address anticipated future remediation costs under the orders, the Company has computed and recorded an estimated environmental liability of
approximately $4.2 million in accordance with applicable accounting rules and has not recorded any potential insurance recoveries in determining the estimated
costs of the cleanup. The progress of future remediation efforts cannot be predicted with certainty, and these costs may change. The Company believes that the
potential future liability, if any, in excess of amounts already accrued will not have a material adverse effect on the Company’s financial condition or results of
operations.
Other Matters
The Company is a defendant or plaintiff in various other actions that arose in the normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the Company’s financial condition or results of operations.
NOTE 17: Subsequent Events
Secondary Equity Offering
On January 27, 2006, the Company closed the offering of 14,096,000 shares of its common stock. The net proceeds from this equity offering, after
deducting underwriting commissions and discounts but prior to deducting offering expenses, were approximately $495 million. The Company will use
approximately $226 million of the net proceeds from this offering to fund the redemption of 35 percent of the aggregate principal amount of our 7.75% Senior
Notes due 2012. (See Note 18). The Company intends to use the balance of the net proceeds for capital expenditures, working capital and other general corporate
purposes, including the possible repayment of indebtedness.
Redemption of 4.75% Debentures
On January 12, 2006, the Company sent a notice of redemption to the holders of its 4.75% Debentures due 2022, with a redemption date of February 6,
2006. Prior to the redemption date, holders of these debentures elected to convert their debentures into 21,378,605 shares of the Company’s common stock
pursuant to the original terms of the 4.75% Debentures. Accordingly, as of February 6, 2006, the 4.75% Debentures were no longer outstanding.
NOTE 18: Subsequent Event (Unaudited)
Redemption of 7.75% Notes
On January 27, 2006, the Company sent a notice of redemption to the holders of its 7.75% Notes due 2012, with a redemption date of February 26, 2006,
for the redemption of 35 percent (or $210 million) of the aggregate principal amount of the 7.75% Notes. On February 27, 2006, the holders of the 7.75% Notes
received 107.75 percent of the principal amount of the 7.75% Notes, plus accrued but unpaid interest, if any, up to, but excluding, the redemption date. In
connection with this redemption, the Company expects to incur a loss of approximately $20 million which will be recorded in the first quarter of 2006.
119
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006