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Table of Contents
Index to Financial Statements
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Long
-Term Debt
Long-term debt at fiscal year-ends was as follows:
In 2003, the company redeemed bonds with a principal amount of $110 million. The bonds were issued by the Puerto Rico Industrial,
Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, and the company had guaranteed payment of
principal and interest.
Holders of the company’s zero coupon senior exchangeable notes (Intel notes) had the right, prior to January 12, 2004, to exchange their
Intel notes for Samsung Electronics Co., Ltd. convertible notes (Samsung notes) owned by Intel. The exchangeable notes were issued in order
to partially mitigate the equity market risk of Intel’s investment in the Samsung notes, and the exchange option has been accounted for as an
equity derivative and marked-to-market with the fair value recorded in long-term debt. During 2003, the holders exchanged Intel notes with a
principal amount of $57 million ($122 million in 2002). In accordance with the terms of the Intel notes, the company delivered a portion of its
investment in the Samsung notes with a face value of approximately $29 million to the holders in exchange for Intel notes ($61 million in
2002). The carrying value of the debt instrument, excluding the portion allocated to the equity derivative, is being accreted to its remaining
principal amount of $21 million through interest expense over the period to its maturity. The Intel notes are classified as short-term debt at
December 27, 2003. Subsequent to December 27, 2003, substantially all of the remaining Intel note holders have exercised their right to
exchange their Intel notes for Samsung notes owned by Intel.
The Euro borrowings were made in connection with the financing of manufacturing facilities and equipment in Ireland, and Intel has
invested the proceeds in Euro-denominated instruments of similar maturity to hedge currency and interest rate exposures.
As of December 27, 2003, aggregate debt maturities were as follows: 2004—$81 million; 2005—$48 million; 2006—$54 million;
2007—$58 million; 2008—$140 million; and thereafter—$636 million.
Note 6: Investments
Trading Assets
Trading assets outstanding at fiscal year-ends were as follows:
63
(In Millions)
2003
2002
Payable in U.S. dollars:
Puerto Rico bonds adjustable 2003, due 2013 at 3.9%
–
4.25%
$
—
$
116
Zero coupon senior exchangeable notes due 2004
41
118
Other U.S. dollar debt
1
3
Payable in other currencies:
Euro debt due 2004
–
2018 at 2.3%
–
11%
975
833
1,017
1,070
Less current portion of long
-
term debt
(81
)
(141
)
Total long-term debt
$
936
$
929
2003
2002
(In Millions)
Net
Unrealized
Gains
Estimated
Fair Value
Net
Unrealized
Gains
(Losses)
Estimated
Fair Value
Debt instruments
$
174
$
2,321
$
64
$
1,460
Equity securities
—
—
63
98
Equity securities offsetting deferred compensation
60
304
(1
)
243
Total trading assets
$
234
$
2,625
$
126
$
1,801