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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: BUGGI-WO who wrote (185474)	1/27/2006 11:13:16 AM
From: Cravey	Read Replies (1) \| Respond to of 275872

Buggi-WO You are definitely on the right track in my opinion. Looking at the filing for the additional share issuance, AMD's debt profile will look like the following post Feb 5th: Senior Notes due 2012 $390M Repurchase Obligations $152M Long-term cap lease $114M Other $ 5M For a total of $660M. At the most, it would mean interest expense of somewhere in the $45M range annually. The senior notes are at 7.75%. On the cash side, they start with roughly $1.8B. They are going to add a net $345M from the share issuance (at the higher share count) and the retirement of part of the 2012 notes. There are also 49M employee options that are outstanding at an average price of roughly $15. Some of these will get exercised, not because it has peaked, but because you have to take a profit sometime. If 10M shares get exercised, that is another $150M for AMD. Assume the cash flow covers the capital expense, and you get a new cash balance of roughly $2.3B. You are not going to get much of a rate on your cash sitting around, maybe 3% - but that would put your annual interest income in the $65M range. As you said, a slight net positive (+5M) per quarter from a significant negative (-20M). That should add about $.20-$.24 cents on an annual basis. I do not expect to see all this in Q1, but it should be clean by Q2. Cravey.