AMD 2013 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2013 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

Information related to interest rates and expense:
2013 2012 2011
(In millions, except percentages)
Effective interest rate ................................................. 8% 8% 8%
Interest cost related to contractual interest coupon ........................... $45 $44 $45
Interest cost related to amortization of the discount .......................... $10 $ 9 $11
Upon the occurrence of certain events described in the 6.00% Indenture, the 6.00% Notes will be
convertible into cash up to the principal amount, and if applicable, into shares of the Company’s common stock
issuable upon conversion of the 6.00% Notes in respect of any conversion value above the principal amount,
based on an initial conversion rate of 35.6125 shares of common stock per $1,000 principal amount of the 6.00%
Notes, which is equivalent to an initial conversion price of $28.08 per share. This initial conversion price
represents a premium of 100% relative to the last reported sale price of the Company’s common stock on
April 23, 2007 (the trading date preceding the date of pricing of the 6.00% Notes) of $14.04 per share. The
conversion rate will be adjusted for certain anti-dilution events. In addition, the conversion rate will be increased
in the case of corporate events that constitute a fundamental change (as defined in the 6.00% Indenture) under
certain circumstances. Holders of the 6.00% Notes may require the Company to repurchase the 6.00% Notes for
cash equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the
occurrence of a fundamental change or a termination of trading (as defined in the 6.00% Indenture).
Additionally, an event of default (as defined in the 6.00% Indenture) may result in the acceleration of the
maturity of the 6.00% Notes.
The 6.00% Notes rank equally with the Company’s existing and future senior debt and are senior to all of
the Company’s future subordinated debt. The 6.00% Notes rank junior to all of the Company’s future senior
secured debt to the extent of the collateral securing such debt and are structurally subordinated to all existing and
future debt and liabilities of the Company’s subsidiaries.
8.125% Senior Notes Due 2017
On November 30, 2009, the Company issued $500 million of the 8.125% Senior Notes Due 2017 (the
8.125% Notes) at a discount of 10.204%. The 8.125% Notes are general unsecured senior obligations. Interest is
payable on June 15 and December 15 of each year beginning June 15, 2010 until the maturity date of
December 15, 2017. The discount of $51 million is recorded as contra debt and is amortized to interest expense
over the life of the 8.125% Notes using the effective interest method. The 8.125% Notes are governed by the
terms of an indenture (the 8.125% Indenture) dated November 30, 2009 between the Company and Wells Fargo
Bank, N.A., as trustee.
As of December 28, 2013, the outstanding aggregate principal amount of the 8.125% Notes was $500
million and the remaining carrying value was approximately $470 million, net of debt discount of $30 million.
As of December 15, 2013, the Company may redeem all or part of the 8.125% Notes at any time at specified
redemption prices, plus accrued and unpaid interest.
Holders have the right to require the Company to repurchase all or a portion of the 8.125% Notes in the
event that the Company undergoes a change of control, as defined in the indenture governing the 8.125% Notes,
at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of
default (as defined in the 8.125% Indenture) may result in the acceleration of the maturity of the 8.125% Notes.
The 8.125% Indenture contains certain covenants that limit, among other things, the Company’s ability and
the ability of its subsidiaries from:
• incurring additional indebtedness, except specified permitted debt;
• paying dividends and making other restricted payments;
91