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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 20-F/A-1
(Mark One)
[ ] Registration statement pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
OR
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the fiscal year ended December 31, 1999
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 000-27811
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
(Exact name of Registrant as specified in its charter)
Republic of Singapore
(Jurisdiction of incorporation or organization)
60 Woodlands Industrial Park D
Street 2, Singapore 738406
+65-362-2838
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
American Depositary Shares,
each represented by ten Ordinary Shares, par value S$0.26 per share.
(Title of class)
Securities for which there is a
reporting obligation pursuant to Section 15(d) of the Act:
Not Applicable
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report. 1,278,977,923 Ordinary Shares
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark which financial statement item the registrant has elected
to follow.
Item 17 [ ] Item 18 [X]
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We hereby amend "Item 9A. Quantitative and Qualitative Disclosure about
Market Risk" of our Annual Report on Form 20-F for the fiscal year ended
December 31, 1999 (File No. 000-027811) filed on March 20, 2000, for the purpose
of correcting an error in the column headings of the Accounts Payable table
under our discussion regarding interest rate risk.
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ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to financial market risks derives primarily from the
changes in interest rates and foreign exchange rates. To mitigate these risks,
the Company utilizes derivative financial instruments, the application of which
is primarily for hedging purposes and not for speculative purposes.
INTEREST RATE RISK
Our cash equivalents and short-term investments are exposed to financial
market risk due to fluctuation in interest rates, which may affect our interest
income and the fair market value of our investments. We manage the exposure to
financial market risk by performing ongoing evaluations of our investment
portfolio and investing in short-term investment-grade corporate securities.
These securities are highly liquid and generally mature within 12 months from
our purchase date. Due to the short maturities of our investments, the carrying
value approximates the fair value. In addition, we do not use our investments
for trading or other speculative purposes.
We are exposed to interest rate risk on our existing floating rate debt
and on additional debt financing that may be periodically needed for the capital
expenditures associated with our capacity expansion and new fabs. The interest
rate that we will be able to obtain on debt financing will depend on market
conditions at that time, and may differ from the rates we have secured on our
current debt.
As of December 31, 1999, our debt obligations are as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
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EXPECTED MATURITY DATE AS OF
(IN THOUSANDS, EXCEPT INTEREST RATE) DECEMBER 31, 1998
---------------------------------------------------- WEIGHTED -----------------
THERE- FAIR INTEREST FAIR
2000 2001 2002 2003 2004 AFTER TOTAL VALUE RATE TOTAL VALUE
-------- -------- -------- ------- ------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LONG-TERM DEBT
U.S. dollar at
floating rate(1)... $ 32,000 $ 32,000 $ 32,000 $32,000 $128,000 $128,000 5.93%
Singapore dollar
at fixed rate(2)... 87,991 87,991 87,991 36,772 $27,579 $27,579 355,903 350,515 4.11 $408,277 $397,717
Singapore dollar
at floating
rate(2) ........... 59,756 59,756 59,756 4.49 60,314 60,314
-------- -------- -------- ------- ------- ------- -------- -------- -------- --------
Total Debt
Maturing ...... $119,991 $119,991 $179,747 $68,772 $27,579 $27,579 $543,659 $538,270 $468,591 $458,031
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</TABLE>
<TABLE>
<CAPTION>
As of December 31,
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1998 1999
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<S> <C> <C>
ACCOUNTS PAYABLE
U.S. dollar .................................... $16,895 $102,614
Singapore dollar(2) ............................ 4,337 12,382
Japanese yen(2) ................................ 10,127 29,742
Others ......................................... -- 7,663
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Total Payable ............................. $31,359 $152,401
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</TABLE>
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(1) As a result of consolidating CSP as a subsidiary from October 1, 1999
forward, our debt obligations as of December 31, 1999 included a U.S.
dollar floating rate debt obligation amounting to US$128 million.
(2) We have entered into forward foreign contracts related to portion of these
amounts to exchange the related cash flows to U.S. dollars. Please see
"Foreign Currency Risk" below.
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As of December 31, 1999, 65.5% of our outstanding debt obligations bore
fixed interest rates. We have no cash flow or earnings exposure due to market
interest rate changes for our fixed debt obligations. 34.5% of our outstanding
debt obligations bear floating interest rates. We have cash flow and earnings
exposure due to market interest rate changes for our floating debt obligations.
A half percentage point change in interest rates would affect our interest
payments by 3.7% annually.
FOREIGN CURRENCY RISK
Our foreign currency exposures give rise to market risk associated with
exchange rate movements against the Japanese yen, the Singapore dollar and the
U.S. dollar, our functional currency. Substantially all of our revenue was
denominated in U.S. dollars during the year ended December 31, 1999 and as a
result, we had relatively little foreign currency exchange risk with respect to
any of our revenue. In 1999, approximately 27% of our cost of revenue was
denominated in Singapore dollars. In addition, approximately 59% of our capital
expenditures were denominated in U.S. dollars, approximately 25% were
denominated in Japanese yen and approximately 16% were denominated in Singapore
dollars. In addition, a substantial part of our debt is denominated in foreign
currency, primarily Singapore dollars.
To protect against reductions in value and the volatility of future cash
flows caused by changes in foreign exchange rates, we utilize currency forward
contracts to minimize the impact of foreign currency fluctuations on our results
of operations. We utilize, from time to time, currency forward contracts to
hedge specific currency risks related to equipment purchase commitments,
primarily in Japanese yen. In addition, we minimize our currency risk by
purchasing certain raw materials and equipment in U.S. dollars and borrowing in
U.S. dollars. Prior to July 1, 1998, our exposure to foreign currency risk was
viewed as exposure to non-Singapore dollar assets and liabilities. Effective
July 1, 1998, we changed our functional currency to the U.S. dollar as described
in note 2(e) to our consolidated financial statements. In connection with the
change, we entered into foreign currency forward contracts to mitigate the
effects to us of exchange rate fluctuations between the U.S. dollar and the
Singapore dollar related to our non-U.S. dollar denominated borrowings. The
table below provides information about our derivative financial instruments and
presents the information in U.S. dollar equivalents.
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<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, 1999 DECEMBER 31, 1998
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EXPECTED MATURITY DATE
(IN THOUSANDS)
---------------------------------------------------------- FAIR FAIR
2000 2001 2002 2003 2004 THEREAFTER TOTAL VALUE TOTAL VALUE
-------- -------- -------- ------- ------- ---------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FORWARD EXCHANGE AGREEMENTS
(Receive Yen/Pay US$)
Contract Amount ............ $ 21,813 $ 5,992 $ 27,805 $(2,256) $ 18,342 $(3,415)
Average Contractual ........ 96.57 76.22
Exchange Rate
(Receive S$/Pay US$)
Contract Amount ............ 105,629 101,931 $156,094 $40,079 $29,514 $28,404 461,651 41,415 503,745 46,035
Average Contractual ........ 1.74 1.75 1.76 1.75 1.75 1.73
Exchange Rate
(Receive US$/Pay S$)
Contract Amount ............ 23,304 23,304 (11)
Average Contractual ........ 1.66
Exchange Rate
-------- -------- -------- ------- ------- ------- -------- ------- -------- -------
Total Contract Amount $150,746 $107,923 $156,094 $40,079 $29,514 $28,404 $512,760 $39,148 $522,087 $42,620
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</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
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CARRYING CARRYING PERCENTAGE
AMOUNT AMOUNT HEDGED HEDGED
-------- -------- --------
<S> <C> <C> <C>
Accounts Payable
Japanese yen .................. $ 29,742 $ 13,971 47.0%
Singapore dollar .............. 12,382 -- --
Others ........................ 7,663 -- --
Capital Lease
Japanese yen .................. 13,834 13,834 100.0
Foreign Currency Loan
Singapore dollar .............. 415,659 415,659 100.0
Future Interest Payable on Debt
Singapore dollar .............. 5,386 5,386 100.0
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Total ...................... $484,666 $448,850 92.6%
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</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, as amended,
the Registrant certifies that it meets all of the requirements for filing on
Form 20-F and has duly caused this amendment to the annual report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
By: /s/ Chia Song Hwee
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Name: Chia Song Hwee
Title: Senior Vice President
and Chief Financial Officer
Date: March 22, 2000
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