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To: jackrabbit who wrote (138818)	7/7/2001 11:18:40 PM
From: Dan3	Read Replies (1) \| Respond to of 186894

Re: AMD Long-term debt You are looking at an entry that includes capitalized leases. There are a number of differences between taking out loans, or issuing bonds, and leasing equipment. The most important for this discussion is the fact that offsetting payments for such leases show up as operating costs, and not as depreciation. AMD shows the current portion of its long term leases "still due" as $183 million, but does not break out what part of its $714 million cost of sales were lease payments. FASB #13 requires that leases be capitalized on the balance sheet, but AMD did not borrow $250 million last quarter, it has, in fact, been buying back what outstanding notes it had issued. amd.com The payments required by those leases are reflected in operating costs and so do not indicate a shortfall in depreciation (which would lock in a near term cost unreflected by current earnings statements, and was the Intel behavior I was pointing out). Nevertheless, I do apologize for sounding a little like Paul, and would like to thank you for pointing out the whole issue. It was a little hard to understand how AMD was managing to compete with Intel while spending only $160+ million per quarter on plant and the answer is: that's not what they're doing. They're spending more than twice that, and reflecting those more-than-twice-expenses on their earnings statements, too. A little less than half as new plant offset by depreciation and a little more than half as capitalized leases offset by lease payments. So AMD is showing profits while paying $1.5 Billion for new plant and not building up an uncosted, undepreciated obligation. Intel has a cash hoard it has been spending down to build plant, which has little effect on earnings, but once the money is gone, it's gone. And they have been spending a lot faster than they have been recognizing those expenses in their earnings statements. AMD's recent earnings statements have been a more accurate reflection of what's going on at the company on a quarterly basis. Regards, Dan

To: jackrabbit who wrote (138818)	7/9/2001 5:41:52 PM
From: TimF	Respond to of 186894

AMD Long-term debt was $1,392,970,000 at April 1, 2001 vs. $1,167,973,000 at December 31, 2000. amd.com Their cash went up more then the long term debt, and their short term debt went down as did their accounts payable and their "total current liability". "Total Stockholders equity" went up. Thanks for pointing out the borrowing though. I did not know that AMD borrowed money recently. Their overall financial picture with respect to cash and debt is better (and they could afford to pay all long term debt with cash) but your right that long term debt did increase. Tim