<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A (No. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended December 27, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-7882
ADVANCED MICRO DEVICES, INC.
(Exact name of registrant as specified in its charter)
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Delaware 94-1692300
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification number)
One AMD Place 94086
Sunnyvale, California (Zip code)
(Address of principal executive offices)
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Registrant's telephone number, including area code: (408) 732-2400
Securities registered pursuant to Section 12(b) of the Act:
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(Name of each exchange
(Title of each class) on which registered)
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$0.01 Par Value Common Stock New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Aggregate market value of the voting stock held by non-affiliates as of March 1,
1999.
$2,665,120,199
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
146,161,636 shares as of March 1, 1999.
- --------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Stockholders for the fiscal year ended
December 27, 1998 are
incorporated into Parts II and IV hereof.
(2) Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held on April 29, 1999, are
incorporated into Part III hereof.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)
1. Financial Statements
The financial statements listed on page F-1 in the Index to Consolidated
Financial Statements and Financial Statement Schedule covered by Report of
Independent Auditors are set forth on pages F-2 through F-27 of this Annual
Report on Form 10-K.
2. Financial Statement Schedule
The financial statement schedule listed on page F-1 in the Index to
Consolidated Financial Statements and Financial Statement Schedule covered by
the Report of Independent Auditors is set forth on page S-1 of this Annual
Report on Form 10-K.
All other schedules have been omitted because the required information is
not present or is not present in amounts sufficient to require submission of the
schedules, or because the information required is included in the Consolidated
Financial Statements or Notes thereto.
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part
of, or incorporated by reference into, this Annual Report on Form 10-K. The
following is a list of such Exhibits:
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Exhibit
Number Description of Exhibits
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2.1 Agreement and Plan of Merger dated October 20, 1995, as amended, between AMD and NexGen, Inc., filed as Exhibit 2 to
AMD's Quarterly Report for the period ended October 1, 1995, and as Exhibit 2.1 to AMD's Current Report on Form 8-K
dated January 17, 1996, is hereby incorporated by reference.
2.2 Amendment No. 2 to the Agreement and Plan of Merger, dated January 11, 1996, between AMD and NexGen, Inc., filed as
Exhibit 2.2 to AMD's Current Report on Form 8-K dated January 17, 1996, is hereby incorporated by reference.
3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to AMD's Quarterly Report on Form 10-Q for the period
ended July 2, 1995, is hereby incorporated by reference.
3.2 By-Laws, as amended, filed as Exhibit 3.2 to AMD's Quarterly Report on Form 10-Q for the period ended March 29, 1998,
is hereby incorporated by reference.
4.1 Form of AMD 11% Senior Secured Notes due August 1, 2003, filed as Exhibit 4.1 to AMD's Current Report on Form 8-K
dated August 13, 1996, is hereby incorporated by reference.
4.2(a) Indenture, dated as of August 1, 1996, between AMD and United States Trust Company of New York, as trustee, filed as
Exhibit 4.2 to AMD's Current Report on Form 8-K dated August 13, 1996, is hereby incorporated by reference.
+ 4.2(b) First Supplemental Indenture, dated as of January 13, 1999, between AMD and United States Trust Company of New York,
as trustee.
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2
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Exhibit
Number Description of Exhibits
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4.3 Intercreditor and Collateral Agent Agreement, dated as of August 1, 1996, among United States Trust
Company of New York, as trustee, Bank of America NT&SA, as agent for the banks under the Credit Agreement
of July 19, 1996, and IBJ Schroder Bank & Trust Company, filed as Exhibit 4.3 to AMD's Current Report on
Form 8-K dated August 13, 1996, is hereby incorporated by reference.
4.4 Payment, Reimbursement and Indemnity Agreement, dated as of August 1, 1996, between AMD and IBJ Schroder
Bank & Trust Company, filed as Exhibit 4.4 to AMD's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
4.5 Deed of Trust, Assignment, Security Agreement and Financing Statement, dated as of August 1, 1996, among
AMD, as grantor, IBJ Schroder Bank & Trust Company, as grantee, and Shelley W. Austin, as trustee, filed
as Exhibit 4.5 to AMD's Current Report on Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.6 Security Agreement, dated as of August 1, 1996, among AMD and IBJ Schroder Bank & Trust Company, as agent
for United States Trust Company of New York, as Trustee, and Bank of America NT&SA, as agent for banks,
filed as Exhibit 4.6 to AMD's Current Report on Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.7 Lease, Option to Purchase and Put Option Agreement, dated as of August 1, 1996, between AMD, as lessor,
and AMD Texas Properties, LLC, as lessee, filed as Exhibit 4.7 to AMD's Current Report on Form 8-K dated
August 13, 1996, is hereby incorporated by reference.
4.8 Reciprocal Easement Agreement, dated as of August 1, 1996, between AMD and AMD Texas Properties, LLC,
filed as Exhibit 4.8 to AMD's Current Report on Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.9 Sublease Agreement, dated as of August 1, 1996, between AMD, as sublessee, and AMD Texas Properties, LLC,
as sublessor, filed as Exhibit 4.9 to AMD's Current Report on Form 8-K dated August 13, 1996, is hereby
incorporated by reference.
4.10 Indenture, dated as of May 8, 1998, by and between AMD and The Bank of New York, filed as Exhibit 4.1 to
AMD's Current Report on Form 8-K dated May 8, 1998, is hereby incorporated by reference.
4.11 Officers' Certificate, dated as of May 8, 1998, filed as Exhibit 4.2 to AMD's Current Report on Form 8-K
dated May 8, 1998, is hereby incorporated by reference.
4.12 Form of 6% Convertible Subordinated Note due 2005, filed as Exhibit 4.3 to AMD's Current Report on Form 8-K dated
May 8, 1998, is hereby incorporated by reference.
4.13 AMD hereby agrees to file on request of the Commission a copy of all instruments not otherwise filed with
respect to AMD's long-term debt or any of its subsidiaries for which the total amount of securities
authorized under such instruments does not exceed 10 percent of the total assets of AMD and its
subsidiaries on a consolidated basis.
+4.14 Officers' Certificate, dated as of January 13, 1999.
*10.1 AMD 1982 Stock Option Plan, as amended, filed as Exhibit 10.1 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 26, 1993, is hereby incorporated by reference.
*10.2 AMD 1986 Stock Option Plan, as amended, filed as Exhibit 10.2 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 26, 1993, is hereby incorporated by reference.
*10.3 AMD 1992 Stock Incentive Plan, as amended, filed as Exhibit 10.3 to AMD's Annual Report on Form 10-K for
the fiscal year ended December 26, 1993, is hereby incorporated by reference.
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3
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Exhibit
Number Description of Exhibits
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*10.4 AMD 1980 Stock Appreciation Rights Plan, as amended, filed as Exhibit 10.4 to AMD's Annual Report on Form
10-K for the fiscal year ended December 26, 1993, is hereby incorporated by reference.
*10.6 Forms of Stock Option Agreements, filed as Exhibit 10.8 to AMD's Annual Report on Form 10-K for the fiscal
year ended December 29, 1991, are hereby incorporated by reference.
*10.7 Form of Limited Stock Appreciation Rights Agreement, filed as Exhibit 4.11 to AMD's Registration Statement
on Form S-8 (No. 33-26266), is hereby incorporated by reference.
*10.8 AMD 1987 Restricted Stock Award Plan, as amended, filed as Exhibit 10.10 to AMD's Annual Report on Form
10-K for the fiscal year ended December 26, 1993, is hereby incorporated by reference.
*10.9 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 29, 1991, are hereby incorporated by reference.
*10.10 Resolution of Board of Directors on September 9, 1981, regarding acceleration of vesting of all
outstanding stock options and associated limited stock appreciation rights held by officers under certain
circumstances, filed as Exhibit 10.10 to AMD's Annual Report on Form 10-K for the fiscal year ended March
31, 1985, is hereby incorporated by reference.
*10.11 AMD 1996 Stock Incentive Plan, as amended, filed as Exhibit 10.11 to AMD's Annual Report on Form 10-K for
the fiscal year ended December 29, 1996, is hereby incorporated by reference.
*10.12 Employment Agreement dated September 29, 1996, between AMD and W. J. Sanders III, filed as Exhibit
10.11(a) to AMD's Quarterly Report on Form 10-Q for the period ended September 29, 1996, is hereby
incorporated by reference.
*10.13 Management Continuity Agreement between AMD and W. J. Sanders III, filed as Exhibit 10.14 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 29, 1991, is hereby incorporated by reference.
*10.14 Bonus Agreement between AMD and Richard Previte, filed as Exhibit 10.14 to AMD's Quarterly Report on Form
10-Q for the period ended June 28, 1998, is hereby incorporated by reference.
*10.15 Executive Bonus Plan, as amended, filed as Exhibit 10.16 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 25, 1994, is hereby incorporated by reference.
*10.16 AMD Executive Incentive Plan, filed as Exhibit 10.14(b) to AMD's Quarterly Report on Form 10-Q for the
period ended June 30, 1996, is hereby incorporated by reference.
*10.17 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to AMD's Annual Report on Form 10-K for the
fiscal year ended March 30, 1986, is hereby incorporated by reference.
*10.18 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, is hereby incorporated by reference.
*10.19 Director Deferral Agreement of R. Gene Brown, filed as Exhibit 10.18 to AMD's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, is hereby incorporated by reference.
10.20 Intellectual Property Agreements with Intel Corporation, filed as Exhibit 10.21 to AMD's Annual Report on
Form 10-K for the fiscal year ended December 29, 1991, are hereby incorporated by reference.
*10.21 Form of Indemnification Agreements with former officers of Monolithic Memories, Inc., filed as Exhibit
10.22 to AMD's Annual Report on Form 10-K for the fiscal year ended December 27, 1987, is hereby
incorporated by reference.
</TABLE>
4
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<TABLE>
Exhibit
Number Description of Exhibits
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*10.22 Form of Management Continuity Agreement, filed as Exhibit 10.25 to AMD's Annual Report on Form 10-K for
the fiscal year ended December 29, 1991, is hereby incorporated by reference.
**10.23(a) Joint Venture Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(a) to AMD's Amendment No.
1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby incorporated by
reference.
**10.23(b) Technology Cross-License Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(b) to AMD's
Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
**10.23(c) AMD Investment Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(c) to AMD's Amendment No.
1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby incorporated by
reference.
**10.23(d) Fujitsu Investment Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(d) to AMD's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
**10.23(e) First Amendment to Fujitsu Investment Agreement dated April 28, 1995, filed as Exhibit 10.23(e) to AMD's
Annual Report on Form 10-K for the fiscal year ended December 29, 1996, is hereby incorporated by
reference.
10.23(f) Second Amendment to Fujitsu Investment Agreement, dated February 27, 1996, filed as Exhibit 10.23 (f) to
AMD's Annual Report on Form 10-K for the fiscal year ended December 29, 1996, is hereby incorporated by
reference.
**10.23(g) Joint Venture License Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(e) to AMD's
Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
**10.23(h) Joint Development Agreement between AMD and Fujitsu Limited, filed as Exhibit 10.27(f) to AMD's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
**10.23(i) Fujitsu Joint Development Agreement Amendment, filed as Exhibit 10.23(g) to AMD's Quarterly Report on Form
10-Q for the period ended March 31, 1996, is hereby incorporated by reference.
10.24(a) Credit Agreement, dated as of July 19, 1996, among AMD, Bank of America NT&SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndication agent and lender, and Canadian Imperial Bank of Commerce, as
documentation agent and lender, filed as Exhibit 99.1 to AMD's Current Report on Form 8-K dated August 13,
1996, is hereby incorporated by reference.
10.24(b) First Amendment to Credit Agreement, dated as of August 7, 1996, among AMD Bank of America NT&SA, as
administrative agent and lender, ABN AMRO Bank N.V., as syndication agent and lender, and Canadian
Imperial Bank of Commerce, as documentation agent and lender, filed as Exhibit 99.2 to AMD's Current
Report on Form 8-K dated August 13, 1996, is hereby incorporated by reference.
10.24(c) Second Amendment to Credit Agreement, dated as of September 9, 1996, among AMD, Bank of America NT&SA, as
administrative agent and lender, ABN AMRO Bank N.V., as syndication agent and lender, and Canadian
Imperial Bank of Commerce, as documentation agent and lender, filed as Exhibit 10.24(b) to AMD's Quarterly
Report on Form 10-Q for the period ended September 29,1996, is hereby incorporated by reference.
</TABLE>
5
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Exhibit
Number Description of Exhibits
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10.24(d) Third Amendment to Credit Agreement, dated as of October 1, 1997, among AMD, Bank of America NT & SA, as
administrative agent and lender, ABN AMRO Bank N.V., as syndicated agent and lender, and Canadian Imperial
Bank of Commerce, as documentation agent and lender, filed as Exhibit 10.24(d) to AMD's Quarterly Report
on Form 10-Q for the period ended September 28, 1997, is hereby incorporated by reference.
10.24(e) Fourth Amendment to Credit Agreement, dated as of January 26, 1998, among AMD, Bank of America NT & SA, as
administrative agent and lender, ABN AMRO Bank N.V., as syndicated agent and lender, and Canadian Imperial
Bank of Commerce, as documentation agent and lender, filed as Exhibit 10.24(e) to AMD's Annual Report on
Form 10-K for the fiscal year ended December 28, 1997, is hereby incorporated by reference.
10.24(f) Fifth Amendment to Credit Agreement, dated as of February 26, 1998, among AMD, Bank of America NT & SA, as
administrative agent and lender, ABN AMRO Bank, N.V., as syndicated agent and lender, and Canadian
Imperial Bank of Commerce, as documentation agent and lender, filed as Exhibit 10.24(f) to AMD's Annual
Report on Form 10-K for the fiscal year ended December 28, 1997, is hereby incorporated by reference.
10.24(g) Sixth Amendment to Credit Agreement, dated as of June 30, 1998, among AMD, Bank of America NT & SA, as
administrative agent and lender, ABN AMRO Bank N.V., as syndicated agent and lender, and Canadian Imperial
Bank of Commerce, as documentation agent and lender, filed as exhibit 10.24(g) to AMD's Current Report on
Form 8-K dated July 8, 1998, is hereby incorporated by reference.
**+ 10.25 Technology Development and License Agreement, dated as of October 1, 1998, among AMD and its subsidiaries
and Motorola, Inc. and its subsidiaries.
**+ 10.26 Patent License Agreement, dated as of December 3, 1998, between AMD and Motorola, Inc.
+ 10.27 Lease Agreement, dated as of December 22, 1998, between AMD and Delaware Chip LLC.
*10.28(a) AMD Executive Savings Plan (Amendment and Restatement, effective as of August 1, 1993), filed as Exhibit
10.30 to AMD's Annual Report on Form 10-K for the fiscal year ended December 25, 1994, is hereby
incorporated by reference.
*10.28(b) First Amendment to the AMD Executive Savings Plan (as amended and restated, effective as of August 1,
1993), filed as Exhibit 10.28(b) to AMD's Annual Report on Form 10-K for the fiscal year ended December
28, 1997, is hereby incorporated by reference.
*10.28(c) Second Amendment to the AMD Executive Savings Plan (as amended and restated, effective as of August 1,
1993), filed as Exhibit 10.28(b) to AMD's Annual Report on Form 10-K for the fiscal year ended December
28, 1997, is hereby incorporated by reference.
*10.29 Form of Split Dollar Agreement, as amended, filed as Exhibit 10.31 to AMD's Annual Report on Form 10-K for
the fiscal year ended December 25, 1994, is hereby incorporated by reference.
*10.30 Form of Collateral Security Assignment Agreement, filed as Exhibit 10.32 to AMD's Annual Report on Form
10-K for the fiscal year ended December 26, 1993, is hereby incorporated by reference.
*10.31 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, filed as Exhibit 4.3 to AMD's
Registration Statement on Form S-8 (No. 33-46577), are hereby incorporated by reference.
*10.32 1992 United Kingdom Share Option Scheme, filed as Exhibit 4.2 to AMD's Registration Statement on Form S-8
(No. 33-46577), is hereby incorporated by reference.
*+ 10.33 AMD 1998 Stock Incentive Plan.
</TABLE>
6
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Exhibit
Number Description of Exhibits
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*10.34 Form of indemnification agreements with current officers and directors
of AMD, filed as Exhibit 10.38 to AMD's Annual Report on Form 10-K for
the fiscal year ended December 25, 1994, is hereby incorporated by
reference.
*10.35 Agreement to Preserve Goodwill dated January 15, 1996, between AMD and
S. Atiq Raza, filed as Exhibit 10.36 to AMD's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, is hereby
incorporated by reference.
*10.36 1995 Stock Plan of NexGen, Inc., as amended, filed as Exhibit 10.36 to
AMD's Annual Report on Form 10-K for the fiscal year ended December
29, 1996, is hereby incorporated by reference.
**10.37 Patent Cross-License Agreement dated December 20, 1995, between AMD
and Intel Corporation, filed as Exhibit 10.38 to AMD's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, is hereby
incorporated by reference.
10.38 Contract for Transfer of the Right to the Use of Land between AMD
(Suzhou) Limited and China-Singapore Suzhou Industrial Park
Development Co., Ltd., filed as Exhibit 10.39 to AMD's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, is hereby
incorporated by reference.
*10.39 NexGen, Inc. 1987 Employee Stock Plan, filed as Exhibit 99.3 to Post-
Effective Amendment No. 1 on Form S-8 to AMD's Registration Statement
on Form S-4 (No. 33-64911), is hereby incorporated by reference.
*10.40 1995 Stock Plan of NexGen, Inc. (assumed by AMD), as amended, filed as
Exhibit 10.37 to AMD's Quarterly Report on Form 10-Q for the period
ended June 30, 1996, is hereby incorporated by reference.
*10.41 Form of indemnity agreement between NexGen, Inc. and its directors and
officers, filed as Exhibit 10.5 to the Registration Statement of
NexGen, Inc. on Form S-1 (No. 33-90750), is hereby incorporated by
reference.
10.42 Series E Preferred Stock Purchase Warrant of NexGen, Inc. issued to
PaineWebber Incorporated, filed as Exhibit 10.14 to the Registration
Statement of NexGen, Inc. on Form S-1 (No. 33-90750), is hereby
incorporated by reference.
10.43 Series F Preferred Stock Purchase Warrant of NexGen, Inc., filed as
Exhibit 10.15 to the Registration Statement of NexGen, Inc. on Form S-
1 (No. 33-90750), is hereby incorporated by reference.
10.44 Series G Preferred Stock Purchase Warrant of NexGen, Inc., filed as
Exhibit 10.16 to the Registration Statement of NexGen, Inc. on Form S-
1 (No. 33-90750), is hereby incorporated by reference.
**10.45 Agreement for Purchase of IBM Products between IBM and NexGen, Inc.
dated June 2, 1994, filed as Exhibit 10.17 to the Registration
Statement of NexGen, Inc. on Form S-1 (No. 33-90750), is hereby
incorporated by reference.
*10.46 Letter Agreement dated as of September, 1988, between NexGen, Inc. and
S. Atiq Raza, First Promissory Note dated October 17, 1988, and Second
Promissory Note dated October 17, 1988, as amended, filed as Exhibit
10.20 to the Registration Statement of NexGen, Inc. on Form S-1 (No.
33-90750), are hereby incorporated by reference.
10.47 Series B Preferred Stock Purchase Warrant of NexGen, Inc. issued to
Kleiner, Perkins, Caufield and Byers IV, as amended, filed as Exhibit
10.23 to the Registration Statement of NexGen, Inc. on Form S-1 (No.
33-90750), is hereby incorporated by reference.
7
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Exhibit
Number Description of Exhibits
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**10.48(a) C-4 Technology Transfer and Licensing Agreement dated June 11,
1996, between AMD and IBM Corporation, filed as Exhibit 10.48 to
AMD's Amendment No. 1 to its Quarterly Report on Form 10-Q/A for
the period ended September 29, 1996, is hereby incorporated by
reference.
**10.48(b) Amendment No. 1 to the C-4 Technology Transfer and Licensing
Agreement, dated as of February 23, 1997, between AMD and
International Business Machine Corporation, filed as Exhibit
10.48(a) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.49(a) Design and Build Agreement dated November 15, 1996, between AMD
Saxony Manufacturing GmbH and Meissner and Wurst GmbH, filed as
Exhibit 10.49(a) to AMD's Annual Report on Form 10-K for the fiscal
year ended December 29, 1996, is hereby incorporated by reference.
10.49(b) Amendment to Design and Build Agreement dated January 16, 1997,
between AMD Saxony Manufacturing GmbH and Meissner and Wurst GmbH
filed as Exhibit 10.49(b) to AMD's Annual Report on Form 10-K for
the fiscal year ended December 29, 1996, is hereby incorporated by
reference.
**10.50(a-1) Syndicated Loan Agreement with Schedules 1, 2 and 17, dated as of
March 11, 1997, among AMD Saxony Manufacturing GmbH, Dresdner Bank
AG and Dresdner Bank Luxemborg S.A., filed as Exhibit 10.50(a) to
AMD's Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
**10.50(a-2) Supplemental Agreement to the Syndicated Loan Agreement dated
February 6, 1998, among AMD Saxony Manufacturing GmbH, Dresdner
Bank AG and Dresdner Bank Luxemborg S.A., filed as Exhibit 10.50(a-
2) to AMD's Annual Report on Form 10-K/A (No.1) for the fiscal year
ended December 28, 1997, is hereby incorporated by reference.
**10.50(b) Determination Regarding the Request for a Guarantee by AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(b) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference, filed as Exhibit 10.50(b) to AMD's
Annual Report on Form 10-K for the fiscal year ended December 28,
1997, is hereby incorporated by reference.
**10.50(c) AMD Subsidy Agreement, between AMD Saxony Manufacturing GmbH and
Dresdner Bank AG, filed as Exhibit 10.50(c) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference.
**10.50(d) Subsidy Agreement, dated February 12, 1997, between Sachsische
Aufbaubank and Dresdner Bank AG, with Appendices 1, 2a, 2b, 3 and
4, filed as Exhibit 10.50(d) to AMD's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
10.50(e) AMD, Inc. Guaranty, dated as of March 11, 1997, among AMD, Saxony
Manufacturing GmbH and Dresdner Bank AG, filed as Exhibit 10.50(e)
to AMD's Quarterly Report on Form 10-Q for the period ended March
30, 1997, is hereby incorporated by reference.
10.50(f-1) Sponsors' Support Agreement, dated as of March 11, 1997, among AMD,
AMD Saxony Holding GmbH and Dresdner Bank AG, filed as Exhibit
10.50(f) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
10.50(f-2) First Amendment to Sponsors' Support Agreement, dated as of
February 6, 1998, among AMD, AMD Saxony Holding GmbH and Dresdner
Bank AG, filed as Exhibit 10.50(f-2) to AMD's Annual Report on Form
10-K for the fiscal year ended December 28, 1997, is hereby
incorporated by reference.
10.50(g-1) Sponsors' Loan Agreement, dated as of March 11, 1997, among AMD,
AMD Saxony Holding GmbH and Saxony Manufacturing GmbH, filed as
Exhibit 10.50(g) to AMD's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by reference.
8
<PAGE>
Exhibit
Number Description of Exhibits
- ------ -----------------------
10.50(g-2) First Amendment to Sponsors' Loan Agreement, dated as of February
6, 1998, among AMD, AMD Saxony Holding GmbH and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(g-2) to AMD's Annual
Report on Form 10-K for the fiscal year ended December 28, 1997, is
hereby incorporated by reference.
10.50(h) Sponsors' Subordination Agreement, dated as of March 11, 1997,
among AMD, AMD Saxony Holding GmbH, AMD Saxony Manufacturing GmbH
and Dresdner Bank AG, filed as Exhibit 10.50(h) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference.
10.50(i) Sponsors' Guaranty, dated as of March 11, 1997, among AMD, AMD
Saxony Holding GmbH and Dresdner Bank AG, filed as Exhibit 10.50(i)
to AMD's Quarterly Report on Form 10-Q for the period ended March
30, 1997, is hereby incorporated by reference.
**10.50(j) AMD Holding Wafer Purchase Agreement, dated as of March 11, 1997,
among AMD and AMD Saxony Holding GmbH, filed as Exhibit 10.50(j) to
AMD's Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
**10.50(k) AMD Holding Research, Design and Development Agreement, dated as of
March 11, 1997, between AMD Saxony Holding GmbH and AMD, filed as
Exhibit 10.50(k) to AMD's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by reference.
**10.50(l-1) AMD Saxonia Wafer Purchase Agreement, dated as of March 11, 1997,
between AMD Saxony Holding GmbH and AMD Saxony Manufacturing GmbH,
filed as Exhibit 10.50(l) to AMD's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
10.50(l-2) First Amendment to AMD Saxonia Wafer Purchase Agreement, dated as
of February 6, 1998, between AMD Saxony Holding GmbH and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50 (l-2) to AMD's Annual
Report on Form 10-K for the fiscal year ended December 28, 1997, is
hereby incorporated by reference.
**10.50(m) AMD Saxonia Research, Design and Development Agreement, dated as of
March 11, 1997, between AMD Saxony Manufacturing GmbH and AMD
Saxony Holding GmbH, filed as Exhibit 10.50(m) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference.
10.50(n) License Agreement, dated March 11, 1997, among AMD, AMD Saxony
Holding GmbH and AMD Saxony Manufacturing GmbH, filed as Exhibit
10.50(n) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
10.50(o) AMD, Inc. Subordination Agreement, dated March 11, 1997, among AMD,
AMD Saxony Holding GmbH and Dresdner Bank AG, filed as Exhibit
10.50(o) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.50(p-1) ISDA Agreement, dated March 11, 1997, between AMD and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(p) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference.
**10.50(p-2) Confirmation to ISDA Agreement, dated February 6, 1998, between AMD
and AMD Saxony Manufacturing GmbH, filed as Exhibit 10.50(p-2) to
AMD's Annual Report on Form 10-K for the fiscal year ended December
28, 1997, is hereby incorporated by reference.
+ 13 1998 Annual Report to Stockholders, portions of which have been
incorporated by reference into Parts II and IV of this annual
report.
+ 21 List of AMD subsidiaries.
9
<PAGE>
Exhibit
Number Description of Exhibits
- ------ -----------------------
+ 23 Consent of Ernst & Young LLP, Independent Auditors, refer to page
F-2 herein.
+ 24 Power of Attorney.
+ 27 Financial Data Schedule.
_____________
* Management contracts and compensatory plans or arrangements required to be
filed as an Exhibit to comply with Item 14(a)(3).
** Confidential treatment has been granted as to certain portions of these
Exhibits.
+ Previously filed.
AMD will furnish a copy of any exhibit on request and payment of AMD's
reasonable expenses of furnishing such exhibit.
(b) Reports on Form 8-K
During the fourth quarter of AMD's fiscal year ended December 27, 1998, a
Current Report on Form 8-K dated October 23, 1998 reporting under Item 5--Other
Events was filed announcing AMD's third quarter earnings.
10
<PAGE>
(d) Fujitsu AMD Semiconductor Limited Financial Statements
This Form 10-K/A is being filed to reflect additional information relating to
Fujitsu AMD Semiconductor Limited (FASL), for which the fiscal year end is March
31. FASL, a joint venture formed by AMD and Fujitsu Limited (Fujitsu), was
formed in 1993 for the development and manufacture of non-volatile memory
devices. AMD has a 49.992% interest in FASL, and Fujitsu has the remaining
interest.
<TABLE>
<CAPTION>
<S> <C>
Statements of Income for the three years ended March 31, 1999................ 12
Balance Sheets at March 31, 1999 and 1998.................................... 13
Statements of Stockholders' Equity for the three years ended March 31, 1999.. 14
Statements of Cash Flows for the three years ended March 31, 1999............ 15
Notes to Financial Statements................................................ 16
Report of Ernst & Young, Independent Auditors................................ 21
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
FUJITSU AMD SEMICONDUCTOR LIMITED
STATEMENTS OF INCOME
FOR THE THREE YEARS ENDED MARCH 31, 1999
- -----------------------------------------------------------------------------------------------
(Thousands except share and per share amounts)
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net sales $401,130 $483,937 $367,103
Expenses:
Cost of sales 351,294 294,849 219,079
Selling, general and administrative 42,633 47,976 42,153
-------- -------- --------
393,927 342,825 261,232
-------- -------- --------
Operating income 7,203 141,112 105,871
Interest income 8 24 161
Interest expense (1,855) (881) (322)
Other income (expense), net (561) (1,967) 412
-------- -------- --------
Income before income taxes 4,795 138,288 106,122
Provision (Benefit) for income taxes (6,252) 62,902 53,850
-------- -------- --------
Net income $ 11,047 $ 75,386 $ 52,272
======== ======== ========
Net income per common share:
Basic $ 17.37 $ 118.53 $ 82.19
Diluted $ 17.37 $ 118.53 $ 82.19
Shares used in per share calculation
Basic 636,000 636,000 636,000
Diluted 636,000 636,000 636,000
</TABLE>
See accompanying notes.
12
<PAGE>
<TABLE>
<CAPTION>
FUJITSU AMD SEMICONDUCTOR LIMITED
BALANCE SHEETS
MARCH 31, 1999 AND 1998
- --------------------------------------------------------------------------------
(Thousands except share and per share amounts)
1999 1998
----- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8 $ 11,453
Accounts receivable from affiliates 64,007 74,837
Inventories:
Raw materials and supplies 4,471 4,921
Work-in-process 57,760 35,693
Finished goods 2,339 8,471
---------- ---------
Total inventories 64,570 49,085
Other current assets 299 1,960
---------- ---------
Total current assets 128,884 137,335
Property, plant and equipment:
Equipment 944,936 764,921
Buildings 131,016 117,449
Construction in progress 3,866 5,708
---------- ---------
Total property, plant and equipment 1,079,818 888,078
Accumulated depreciation (507,449) (288,342)
---------- ---------
Property, plant and equipment, net 572,369 599,736
Other assets 11,895 9,955
---------- ---------
TOTAL $ 713,148 $ 747,026
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loan payable to affiliates $ 114,036 $ 93,868
Accounts payable 34,998 105,473
Payables to affiliates 29,200 33,331
Accrued liabilities 11,307 8,047
Income taxes payable 17 31,908
---------- ---------
Total current liabilities 189,558 272,627
Deferred income taxes 59,610 62,097
Other accrued liabilities 1,269 772
Commitments - -
Stockholders' equity:
Common stock, par value $500; 800,000 shares authorized;
636,000 shares issued and outstanding in 1999 and 1998 318,790 318,790
Retained earnings 214,978 203,931
Accumulated other comprehensive loss (71,057) (111,191)
---------- ---------
Total stockholders' equity 462,711 411,530
---------- ---------
TOTAL $ 713,148 $ 747,026
========== =========
</TABLE>
See accompanying notes.
13
<PAGE>
<TABLE>
<CAPTION>
FUJITSU AMD SEMICONDUCTOR LIMITED
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------------------------------
(Thousands except share amounts)
Common Stock
-------------------------
Accumulated
Number Other Total
of Retained Comprehensive Stockholders'
Shares Amount Earnings Loss Equity
------------ --------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
March 31, 1996 (Unaudited) 636,000 $318,790 $ 76,273 $ (26,661) $368,402
Comprehensive income (loss)
Net Income - - 52,272 - 52,272
Other comprehensive loss:
Net change in accumulated
translation adjustments - - - (56,769) (56,769)
--------
Total other comprehensive loss (56,769)
--------
Total comprehensive loss (4,497)
-------------------------------------------------------------------
March 31, 1997 636,000 318,790 128,545 (83,430) 363,905
Comprehensive income (loss)
Net income - - 75,386 - 75,386
Other comprehensive loss:
Net change in accumulated
translation adjustments - - - (27,761) (27,761)
--------
Total other comprehensive loss (27,761)
--------
Total comprehensive income 47,625
-------------------------------------------------------------------
March 31, 1998 636,000 318,790 203,931 (111,191) 411,530
Comprehensive income (loss)
Net income - - 11,047 - 11,047
Other comprehensive income:
Net change in accumulated
translation adjustments - - - 40,134 40,134
--------
Total other commprehensive income 40,134
--------
Total comprehensive income 51,181
-------------------------------------------------------------------
March 31, 1999 636,000 $318,790 $214,978 $ (71,057) $462,711
</TABLE>
See accompanying notes.
14
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
(Thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 11,047 $ 75,386 $ 52,272
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 181,415 146,637 117,287
Net loss on disposal of property, plant and equipment 179 433 -
Changes in operating assets and liabilities:
Net decrease (increase) in receivables, inventories,
prepaid expenses and other assets 7,593 (65,570) 32,268
Net (decrease) increase in deferred income tax liabilities (7,928) 11,719 12,668
(Decrease) Increase in income taxes payable (32,842) 3,893 12,813
Net (decrease) increase in payables
and accrued liabilities (79,872) 90,721 (152,059)
--------- --------- ---------
Net cash provided by operating activities 79,592 263,219 75,249
--------- --------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (101,964) (303,834) (233,817)
Proceeds from sale of property, plant and equipment 85 702 -
--------- --------- ---------
Net cash used for investing activities (101,879) (303,132) (233,817)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from borrowings 384,884 242,368 92,791
Payments on debt (374,384) (194,221) (44,758)
--------- --------- ---------
Net cash provided by financing activities 10,500 48,147 48,033
--------- --------- ---------
Net (decrease) increase in cash (11,787) 8,234 (110,535)
Net effect of exchange rate changes on cash 342 (848) (4,919)
Cash at beginning of year 11,453 4,067 119,521
--------- --------- ---------
Cash at end of year $ 8 $ 11,453 $ 4,067
========= ========= =========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 1,910 $ 881 $ 322
========= ========= =========
Income taxes $ 32,608 $ 47,225 $ 27,034
========= ========= =========
</TABLE>
See accompanying notes.
15
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
In 1993, Advanced Micro Devices (AMD) and Fujitsu Limited (Fujitsu) formed a
joint venture, Fujitsu AMD Semiconductor Limited (FASL or the Company), for the
development and manufacture of non-volatile memory devices. Through FASL, the
two companies have constructed and are operating an advanced integrated circuit
(IC) manufacturing facility in Aizu-Wakamatsu, Japan, to produce Flash memory
devices. AMD has a 49.992% interest in FASL, and Fujitsu has the remaining
interest.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR. The Company's fiscal year ends March 31.
ACCOUNTING PRINCIPLES. The accounting records of the Company are maintained in
accordance with accounting practices prevailing in Japan. The accompanying
financial statements, however, include adjustments that have not been recorded
in the legal books of account of the Company but are necessary to conform to
generally accepted accounting principles in the United States of America (U.S.
GAAP). These adjustments consist principally of depreciation under a different
method and its impact on the valuation of inventories, provision of deferred
income taxes, and adjustments stemming from the translation of the Company's
financial statements into the U.S. dollar for reporting purposes.
CASH EQUIVALENTS. Cash equivalents consist of financial instruments which are
readily convertible into cash and have original maturities of three months or
less at the time of acquisition.
FOREIGN CURRENCY TRANSLATION. The functional currency of the Company is the
Japanese yen. Financial statements are translated into the U.S. dollar using the
exchange rate at each balance sheet date for assets and liabilities and a
weighted-average exchange rate for each period for income statement items.
Translation adjustments are recorded as a separate component of stockholders'
equity in the U.S. dollar financial statements.
REVENUE RECOGNITION. Revenue is recognized from sales when products are shipped
to the customer.
INVENTORIES. Inventories are stated at the lower of actual cost (average method)
or market (net realizable value).
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated at cost.
Depreciation for U.S. GAAP purposes is provided on the straight-line basis over
the estimated useful lives of the assets for financial reporting purposes and on
accelerated methods for tax purposes. Estimated useful lives for financial
reporting purposes are as follows: machinery and equipment 3 to 5 years;
buildings up to 26 years.
NET INCOME PER COMMON SHARE. Net income per share has been computed using the
weighted-average common shares outstanding. The Company has no potentially
dilutive securities.
16
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133 (SFAS
133), "Accounting for Derivative Instruments and Hedging Activities." SFAS 133
is required to be adopted for fiscal years beginning after June 15, 2000. This
Statement will require recognition of all derivatives on the balance sheet at
fair value and the changes in fair value will be recognized through earnings or
other comprehensive income, depending on the nature of the derivatives. The
Company does not have any derivative instruments; therefore, SFAS 133 will have
no impact on the Company's financial position, results of operation or cash
flows.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results inevitably will differ from those estimates,
and such differences may be material to the financial statements.
FINANCIAL PRESENTATION. The Company has reclassified certain prior year amounts
on the financial statements to conform to the current year presentation.
3. RELATED PARTY TRANSACTIONS
The Company is 100 percent owned by AMD and Fujitsu, with AMD having a 49.992%
interest, and Fujitsu having the remaining interest. Under the terms of the
joint venture agreement, FASL production is allocated nearly equally between AMD
and Fujitsu. All of the Company's accounts receivable and sales as of and for
the years ended March 31, 1999, 1998 and 1997 were with these related parties.
FASL made purchases from AMD, Fujitsu and Fujitsu's subsidiaries totaling $49
million, $62 million and $46 million in 1999, 1998, and 1997, respectively. At
March 31, 1999 and 1998, FASL owed AMD, Fujitsu and Fujitsu's subsidiaries
approximately $142 million and $125 million, respectively, which consisted of
loan, trade and royalty payables.
The Company has an agreement with Fujitsu Capital Limited (FCAP), a wholly owned
subsidiary of Fujitsu, to provide financing to FASL at lower interest rates than
banks. Had the Company obtained financing from a lender other than FCAP, the
additional interest expense would have been immaterial. FASL completed
construction of the building for a second Flash memory device wafer fabrication
facility, FASL II, in the third quarter of 1997 at a site contiguous to the
existing FASL facility in Aizu-Wakamatsu, Japan. Equipment installation is in
progress and the facility, including equipment, the completion of which is
anticipated in the second quarter of 2000, is expected to cost approximately $1
billion. Approximately $368 million of such cost has been funded as of March
31, 1999. Capital expenditures for FASL II construction to date have been
funded by cash generated from FASL operations and borrowings by FASL. However,
to the extent that FASL is unable to secure the necessary funds for FASL II, AMD
and Fujitsu may be required to contribute cash or guarantee third-party loans in
proportion to their respective interests in FASL. At March 31, 1999, AMD and
Fujitsu had loan guarantees outstanding totaling $114 million with respect to
such loans. The planned FASL II costs are denominated in yen and are therefore
subject to change due to foreign exchange rate fluctuations.
17
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
The Company has a severance benefit package for employees formerly employed by
Fujitsu. FASL accrues the Company's share of severance benefits at year-end in
an amount to be settled with Fujitsu if the eligible employee terminates their
service with FASL and returns to Fujitsu or another Fujitsu group company.
4. COMPREHENSIVE LOSS
In 1998, the Company adopted Statement of Financial Accounting Standards No. 130
(SFAS 130), "Reporting Comprehensive Income." SFAS 130 establishes new rules
for the reporting and display of comprehensive loss and its components; however,
the adoption of this statement had no impact on the net income or stockholders'
equity. SFAS 130 requires unrealized gains or losses on available-for-sale
securities and the foreign currency translation adjustments, which prior to
adoption were reported separately in stockholders' equity, to be included in
other comprehensive loss. Prior year financial statements have been
reclassified to conform to the requirements of SFAS 130.
As of March 31, 1999 and 1998 components of accumulated other comprehensive
loss, consisting only of cumulative translation adjustments, were $71,057,000
and $111,191,000 respectively.
5. INCOME TAXES
Provision for income taxes consists of:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
(Thousands) 1999 1998 1997
-------------------------------------------
<S> <C> <C> <C>
Current:
Foreign National $ (226) $33,935 $27,415
Foreign Local (117) 17,248 13,841
Deferred:
Foreign National and Local (5,909) 11,719 12,594
-------- ------- -------
(Benefit) Provision for income taxes $(6,252) $62,902 $53,850
======== ======= =======
- ---------------------------------------------------------------------------------------
</TABLE>
Significant components of the Company's deferred tax assets and liabilities as
of March 31, 1999 and 1998 are as follows:
18
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
(Thousands) 1999 1998
---------------------------------------
<S> <C> <C>
Deferred tax assets:
Inventory reserves $ - $ 2,672
Tax loss carryforward 5,682 -
Accrued expenses not currently deductible 2,265 5,995
----------- -----------
Total deferred tax assets 7,947 8,667
----------- -----------
Deferred tax liabilities:
Depreciation (65,749) (63,967)
Sales reserves (6,752) (9,553)
Inventory reserves (50) -
Other (174) -
----------- -----------
Total deferred tax liabilities (72,725) (73,520)
----------- -----------
Net deferred tax liabilities $(64,778) $(64,853)
=========== ===========
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The following is a reconciliation between statutory Japanese income taxes and
the total provision for income taxes:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
-----------------------------------------------------------------------------------------
(Thousands except percent) Tax Rate Tax Rate Tax Rate
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Statutory income tax provision $ 2,238 46.7 % $69,700 50.4 % $53,492 50.4 %
Permanent book/tax differences (55) (1.1) 49 0.0 (36) (0.0)
Inhabitant tax per capita 31 0.6 33 0.0 36 0.0
Effect of tax rate change (8,131) (169.6)% (5,533) (4.0) 0 0.0
Other (335) (7.0) (1,347) (0.9) 358 0.3
------- ------- ------- ------ ------- ------
$(6,252) (130.4)% $62,902 45.5 % $53,850 50.7 %
======= ======= ======= ====== ======= ======
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6. SEGMENT REPORTING
In June 1997, the Financial Accounting Standards Board issued the Statement of
Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments
of an Enterprise and Related Information," which the Company has adopted in the
current year. As required by SFAS 131, the Company has determined it has only
one principle business and one reportable segment: non-volatile memory devices.
FASL derives all of its revenues from sales of only one product, Flash memory
devices, and is not organized by multiple operating segments for the purposes of
making operating decision or assessing performance. Accordingly, the Company
operates in one reportable segment.
The Company derives revenues from its sales to AMD and Fujitsu. All long-lived
assets are located in Japan.
19
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS
At March 31, 1999, the Company had commitments of approximately $24 million for
the purchase and installation of equipment in FASL facilities.
The Company leases the land from Fujitsu under an agreement that expires May 31,
2023. The lease fee is revised every three years based on the fair market value
of the land. In addition, certain manufacturing equipment is used under
operating lease contracts. For each of the next five years and beyond, lease
obligations are:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(Thousands)
Years ending March 31: Leases
- -----------------------------------------------------------------------------
<S> <C>
2000 $ 5,840
2001 5,209
2002 846
2003 398
2004 398
2005 and thereafter 7,657
-------
Total $20,348
=======
- -----------------------------------------------------------------------------
</TABLE>
Rent expense was $5,402,000, $1,151,000 and $573,000 in 1999, 1998 and 1997,
respectively.
8. RETAINED EARNINGS
The amount of retained earnings available for dividends under the Commercial
Code in Japan is based on the amount recorded in the Company's books maintained
in accordance with Japanese accounting practices. The adjustments included in
the accompanying financial statements but not recorded in the books as explained
in Note 2 have no effect on the determination of retained earnings available for
dividends under the Commercial Code in Japan.
9. SUBSEQUENT EVENT
In June 1999, a new transfer price agreement, which includes the basis for
determining the unit selling price, was approved by the Board of Directors.
Under the old transfer price agreement, the unit selling price was calculated
based on a percentage of AMD's ultimate average selling price at a
predetermined, nonnegotiable exchange rate. Under the new transfer price
agreement, the unit selling price is calculated using approximately 106 percent
of cost of sales based on the Commercial Code in Japan. Under the Commercial
Code in Japan, property, plant and equipment are depreciated using the declining
balance method. The change is effectively applied to the unit selling price of
products shipped on and after April 1, 1999.
20
<PAGE>
Report of Independent Auditors
The Board of Directors and Stockholders
Fujitsu AMD Semiconductor Limited
We have audited the accompanying balance sheets of Fujitsu AMD Semiconductor
Limited as of March 31, 1999 and 1998, and the related statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended March 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
We have also reported separately on the financial statements of Fujitsu AMD
Semiconductor Limited for the same years prepared in accordance with accounting
principles generally accepted in Japan.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fujitsu AMD Semiconductor
Limited at March 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended March 31, 1999, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Ernst & Young
Tokyo, Japan
September 17, 1999
21
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ADVANCED MICRO DEVICES, INC.
September 22, 1999
By: /s/ Francis P. Barton
-------------------------------------
Francis P. Barton
Senior Vice President,
Chief Financial Officer
22
