AMD 2009 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2009 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

to purchase 14.6 million shares of common stock with a weighted-average exercise price of $14.70 per share, and
we cancelled and replaced those options on July 27, 2009 with options to purchase 4 million shares of common
stock with an exercise price of $3.80 per share, which was the closing price of our common stock on the New
York Stock Exchange on July 27, 2009. The Option Exchange resulted in an incremental stock-based
compensation charge of approximately $1 million. This incremental charge along with unamortized stock-based
compensation expenses associated with the cancelled options are being recognized over the new vesting periods
of the replacement options which range from one to two years.
International Sales
International sales as a percentage of net revenue were 87 percent in 2009 and 88 percent in 2008 and 2007.
We expect that international sales will continue to be a significant portion of total sales in the foreseeable future.
Substantially all of our sales transactions were denominated in U.S. dollars.
FINANCIAL CONDITION
Liquidity
As of December 26, 2009, our cash, cash equivalents and marketable securities balances were
approximately $2.7 billion, which included $904 million of GF’s cash and cash equivalents. Taking into account
the 2010 deconsolidation of GF, we believe that cash, cash equivalents and marketable securities balances as of
December 26, 2009, anticipated cash flow from operations and available external financing will be sufficient to
fund operations, including capital expenditures of approximately $160 million over the next twelve months
related to, among other things, IT, our assembly and test facilities and investments supporting research and
development efforts, including AMD Fusion product development. In addition, our debt and capital lease
obligations as of December 26, 2009 were $4.7 billion, of which $2.0 billion represented GF obligations. In
2009, without taking into account GF’s indebtedness, we reduced our debt by approximately $1.2 billion.
We believe that in the event additional funding is required, we will be able to access the capital markets on
terms and in amounts adequate to meet our objectives. However, given the possibility of changes in market
conditions or other occurrences, we cannot assure that such funding will be available on terms favorable to us or
at all.
Over the longer term, should additional funding be required, such as to meet payment obligations of our
long-term debt when due, we may need to raise the required funds through borrowings or public or private sales
of debt or equity securities, which may be issued from time to time under an effective registration statement,
through the issuance of securities in a transaction exempt from registration under the Securities Act of 1933, or a
combination of one or more of the foregoing. However, recent global market and economic conditions have been
unprecedented and challenging, with tighter credit conditions and recession in most major economies continuing
into 2010. Continued concerns about the systemic impact of potential long-term and wide-spread recession, the
availability and cost of credit, and the global housing and mortgage markets have contributed to increased market
volatility and diminished expectations for western and emerging economies. These conditions, combined with
volatile oil prices, declining business and consumer confidence and increased unemployment, have contributed to
volatility of unprecedented levels.
As a result of these market conditions, the cost and availability of credit has been and may continue to be
adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets
generally and the strength of counterparties specifically has led many lenders and institutional investors to
reduce, and in some cases, cease to provide credit to businesses and consumers. This may adversely affect our
liquidity and financial condition, and the liquidity and financial condition of our customers, including our ability
to refinance maturing liabilities and access the capital markets to meet liquidity needs.
63