AMD 2005 Annual Report Download - page 46

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Table of Contents
107.75 percent of the principal amount of the redeemed 7.75% Notes, plus accrued but unpaid interest, if any, to, but excluding, the redemption date. In
connection with this redemption, we expect to incur a loss of approximately $20 million, which will be recorded in the first quarter of 2006.
We may elect to purchase or otherwise retire our 7.75% Notes with cash, stock or other assets from time to time in open market or privately negotiated
transactions, either directly or through intermediaries, or by tender offer, when we believe the market conditions are favorable to do so. Such purchases may have
a material effect on our liquidity, financial condition and results of operations.
Fab 36 Term Loan and Guarantee and Fab 36 Partnership Agreements
Our new 300-millimeter wafer fabrication facility, Fab 36, is located in Dresden, Germany adjacent to our other wafer manufacturing facility, Fab 30. Fab
36 is owned by AMD Fab 36 KG, a German limited partnership. We control the management of AMD Fab 36 KG through a wholly owned Delaware subsidiary,
AMD Fab 36 LLC, which is a general partner of AMD Fab 36 KG. AMD Fab 36 KG is our indirect consolidated subsidiary. Fab 36 will produce advanced
microprocessor products, and we expect first production shipments of products manufactured using 300-millimeter wafers in the first quarter of 2006.
To date, we have provided the majority of financing for the Fab 36 project. In addition, Leipziger Messe GmbH, a nominee of the State of Saxony, Fab 36
Beteiligungs GmbH, an investment consortium arranged by M+W Zander Facility Engineering GmbH, the general contractor for the project, and a consortium of
banks are providing financing for the project. Leipziger Messe and Fab 36 Beteiligungs are limited partners in AMD Fab 36 KG. We also anticipate receiving up
to approximately $644 million in grants and allowances from federal and state German authorities for the Fab 36 project. We expect that capital expenditures for
Fab 36 from 2006 through 2008 will be approximately $1.6 billion in the aggregate.
The funding to construct and facilitize Fab 36 consists of:
• equity contributions from us of $694 million under the partnership agreements, revolving loans from us of up to approximately $890 million, and
guarantees from us for amounts owed by AMD Fab 36 KG and its affiliates to the lenders and unaffiliated limited partners;
• investments of up to approximately $380 million from Leipziger Messe and Fab 36 Beteiligungs;
• loans of up to approximately $831 million from a consortium of banks;
• up to approximately $644 million of subsidies consisting of grants and allowances, from the Federal Republic of Germany and the State of Saxony;
depending on the level of capital investments by AMD Fab 36 KG, of which $198 million of cash has been received as of December 25, 2005; and
• a loan guarantee from the Federal Republic of Germany and the State of Saxony of 80 percent of the losses sustained by the lenders referenced above
after foreclosure on all other security.
As of December 25, 2005, we had contributed to AMD Fab 36 KG the full amount of equity required under the partnership agreements and no loans were
outstanding. These amounts have been eliminated in our consolidated financial statements.
On April 21, 2004, AMD, AMD Fab 36 KG, AMD Fab 36 LLC, AMD Fab 36 Holding GmbH, a German company and wholly owned subsidiary of AMD
that owns substantially all of our limited partnership interest in AMD Fab 36 KG, and AMD Fab 36 Admin GmbH, a German company and wholly owned
subsidiary of AMD Fab 36 Holding that owns the remainder of our limited partnership interest in AMD Fab 36 KG, (collectively referred to as the AMD
companies) entered into a series of agreements (the partnership agreements) with the unaffiliated limited partners of AMD Fab 36 KG, Leipziger Messe and Fab
36 Beteiligungs, relating to the rights and obligations with respect to their limited partner and silent partner contributions in AMD Fab 36 KG. The
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Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006