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That one simple statement right there negates anything of intelligence you might have said, previously or in the future. All you are is another AMD fanboy and therefore worthy of nothing but heckling, abuse, and being ignored.

To dust off my usual question...Do you use Windows?

Your not quite understanding me it seems... your implying that i am putting forward an unbiased opinion when i am doing nothing of the sort. Theres nothing wrong with being a fan of a particular company provided your not trying to hide it in thinly vailed attacks on a competitors product, this i have not done.

I have nothing against Intel CPU`s they are very good chips, i am just against Intel and for good reason. You imply i am for some form of product disparity where none exists... very strange.

as for windows, yes i use it, as well as Ubuntu + XGL GUI and an old G4 due to the fact that ive been a system tech for the last ten years.

So if your current rig burned down, would you buy a Core 2 Duo?

We have seen this type of grabage time and time again. I can handle the inquirer when they make predictions of future products that companies are going to release, since they are simple predictions(even though they don't pass them off as predictions). Sometimes they are acurate, other times not.

But then we have other times such as this where they just seem to type whatever comes to mind. And then people read it and take it as credible information. The Inquirer needs to post a disclaimer before every article they post, that the information is based on no fact whatsoever. The articles we write are based on our opinion alone, and we are not experts, we are only journalists(and calling them journalists is a stretch).

wes

Errr can someone tell me if we can trust what this source is saying. Thought this sites reporting was speculative at best.

Two comments.

One, if you are truly intersted in AMDs finances, you should review their statement of cash flows. This statement would answer your question. There are three parts to this statement:

1. Cash flows from operations - essentially this will inform you if they are generating cash from the products they sale. It looks like for the year ending 12/25/2005 they generated 1.5BB from their operations. There total loan on this fab is less than 1BB. The writers of the inquirer are writers - clearly they aren't too savy with finance. These kinds of loans are typical for capital intensive industries.

2. Cash flows from investing activities - this would be payments of dividends or the purchase of a fab.

3. Cash flows from financing activites - this would be the cash borrowings or repayments of debt.

Two, leverage is a double edge sword, but AMD believes they can use it to their advantage. The execs at AMD seem quite bullish on their future and want to boost production fast. Therefore, they taking a calculated risk and are borrowing from the bank to have more cash to invest. This is a more attractive option than waiting for cash to accumulate in amounts sufficient to build a fab. Already they cannot meet demand for their product, and if they don't move fast Intel will soke up this demand to the detriment of AMD.

lol...I just closed my finance book to read some posts on the forum, and I get thrown right back into it. A lot of people don't understand the concept of corporations borrowing money for reinvestment. Granted AMD's spending has been a little high as of late, with the absorption of ATI, and the new Fab construction, but the loan amount is small compared to the ROI (return-on-investment) for the plant over the next 5-10 years. The fact is, a growing company tends to borrow a lot of money (or issue stock, bonds, etc.)...because it takes some to make some. I'm pretty sure someone is doing NPV calculations to keeps them on the straight and narrow...

Exactly.. You've got to spend money to make money, and in the case of corporations, taking out huge loans is quite normal. As long as these long term investments pay off, they have nothing to be concerned about.

Comparing this to individual finance is completely redundant, because most people do not own their own businesses- they work for a weekly paycheck; therefore by them spending more money it cannot be beneficial because they are not actually investing it.

Did anyone actually READ the story? This is not a new loan, it is the last part of a loan taken out in 2004. And it is not to payback any other loans. The loan was taken out by Fab36 and will more than likely be used to help convert from 90nm.

Did anyone actually READ the story? This is not a new loan, it is the last part of a loan taken out in 2004. And it is not to payback any other loans. The loan was taken out by Fab36 and will more than likely be used to help convert from 90nm.

Baron,

AMD filed an SEC K-8 disclosure on Dec 28th

http://yahoo.brand.edgar-online.co [...] &Type=HTML

Just like a Home Equity Line of Credit, though I may take out more money against my line, I have increased my debt load....

AMD simply increased their debt load on a pre-existing loan agreement.... technically not a new loan, but more debt obligation regardless.

The point was that this is not to "keep them afloat" as was opined by the OP. Yes it means they owe more but it is definitely common practice as was noted previously.

You broke out the 8K -lol. Well, I guess if they weren't audited by Andersen we can trust it.

Everything today is sensationalized it is over kill and I am quite sick of it. I am sure others are as well. I guess if you don't have a catchy title no one will read your post. Just like watching the news. You ever watch Glen Beck or Nancy Grace on the news. Drama Drama Drama.

The end is near

Should read AMD borrowed money....business as usual....who cares.

Hell I have a home equity loan.....it's the American way

Not to beat a dead horse, but I think investors are still curious to see when the ATI investment pays off.

It'll be difficult to find ATI specific information now that AMD has sucked them up, but we can look at statements and trends to figure some things out.

First of all, at the end of the fiscal year (August 31, 2005 for ATI) of 2005, ATI had about 1.7 billion dollars in assets and .7 billion dollars in debt. Essentially, AMD's 5.4 billion dollar purchase actually gained them 1 billion dollars in assets above and beyond debt. It doesn't exactly translate to free money for AMD, but it's something to consider.

ATI at the end of 2005 (and this is straight off their SEC filed balance sheet) only made 16 million dollars (2004 was 204 million for comparison). Future quarterly reports note that ATI actually ended up taking losses in subsequent quarters while Nvidia started taking more MSS. What this basically means is that AMD picked up ATI when ATI started bleeding. The real question here is has AMD removed the money losing sections from ATI and has the acquisition been smooth enough that ATI hasn't fallen too far behind Nvidia (if AMD still cares about the gamer market). Currently we see that Nvidia has gone DX10, while we still wait for ATI.

If "ATI" still loses money, then not only did it cost AMD 5.4 billion, but that "investment" has a negative rate of return. They're already paying interest on their sizeable loan for the purchase, but to have the purchase be hurting them on operating income/expenses as well is unacceptable - investors are much more sympathetic to costs on certain areas of the balance sheet.

We'll have to wait and see what happens. One large factor is that many video cards included in Intel based laptops have been ATI based. I seriously doubt Intel is going to continue suggesting ATI based graphics to OEMs. In a segment where Intel clearly reigns, that's a big business loss for ATI.

That one simple statement right there negates anything of intelligence you might have said, previously or in the future. All you are is another AMD fanboy and therefore worthy of nothing but heckling, abuse, and being ignored.

To dust off my usual question...Do you use Windows?

Your not quite understanding me it seems... your implying that i am putting forward an unbiased opinion when i am doing nothing of the sort. Theres nothing wrong with being a fan of a particular company provided your not trying to hide it in thinly vailed attacks on a competitors product, this i have not done.

I have nothing against Intel CPU`s they are very good chips, i am just against Intel and for good reason. You imply i am for some form of product disparity where none exists... very strange.

as for windows, yes i use it, as well as Ubuntu + XGL GUI and an old G4 due to the fact that ive been a system tech for the last ten years.

Actually, if you looked at what I quoted I was not implying anything regarding product disparity. The part I quoted had everything to do with a very evident moral objection to Intel's business practices/model.

Which in turn leads into my Windows question - if you have a moral objection to using Intels products, then you should certainly have one to using any Microsoft product and by your own logic shouldn't be using their products either. If you do you're a hypocrite.