AMD 2011 Annual Report Download - page 37

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illegally trading in our stock on the basis of that confidential information. In addition, one former employee pled
guilty to conspiracy to commit securities fraud and wire fraud. At this time, we cannot give any assurances as to
whether any facts that may be discovered during the proceedings relating to this matter or other similar matters
will be damaging to our business, results of operations or reputation.
Failures in the global credit markets have impacted and may continue to impact the liquidity of our auction
rate securities.
As of December 31, 2011, the par value of all our auction rate securities, or ARS, was $45 million with an
estimated fair value of $38 million. As of December 31, 2011, our investments in ARS included estimated fair
values of approximately $13 million of student loan ARS and $25 million of municipal and corporate ARS. The
uncertainties in the credit markets have affected all of our ARS and auctions for these securities have failed to
settle on their respective settlement dates since February 2008. The auctions failed because there was insufficient
demand for these securities. A failed auction does not represent a default by the issuer of the ARS. For each
unsuccessful auction, the interest rate is reset based on a formula set forth in each security, which is generally
higher than the current market unless subject to an interest rate cap. When auctions for these securities fail, the
investments may not be readily convertible to cash until a future auction of these investments is successful, a
buyer is found outside of the auction process, the issuers of the ARS establish a different form of financing to
replace these securities or redeem them, or final payment is due according to contractual maturities (currently,
ranging from 2030 to 2050 for our ARS). Although we have had redemptions since the failed auctions began, the
liquidity of these investments continues to be adversely impacted.
If market illiquidity worsens, we may be required to record additional impairment charges with respect to
these investments in the future, which could adversely impact our results of operations.
The conflict minerals-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act
as well as a variety of environmental laws that we are subject to could result in additional costs and liabilities.
Our operations and properties have in the past and continue to be subject to various United States and
foreign environmental laws and regulations, including those relating to materials used in our products and
manufacturing processes, discharge of pollutants into the environment, the treatment, transport, storage and
disposal of solid and hazardous wastes, and remediation of contamination. These laws and regulations require us
to obtain permits for our operations, including the discharge of air pollutants and wastewater. Although our
management systems are designed to maintain compliance, we cannot assure you that we have been or will be at
all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with
any of them, a range of consequences could result, including fines, suspension of production, alteration of
manufacturing processes, import/export restrictions, sales limitations, criminal and civil liabilities or other
sanctions. We could also be held liable for any and all consequences arising out of exposure to hazardous
materials used, stored, released, disposed of by us or located at, under or emanating from our facilities or other
environmental or natural resource damage.
Certain environmental laws, including the U.S. Comprehensive, Environmental Response, Compensation
and Liability Act of 1980, or the Superfund Act, impose strict, or under certain circumstances, joint and several
liability on current and previous owners or operators of real property for the cost of removal or remediation of
hazardous substances and impose liability for damages to natural resources. These laws often impose liability
even if the owner or operator did not know of, or was not responsible for, the release of such hazardous
substances. These environmental laws also assess liability on persons who arrange for hazardous substances to be
sent to disposal or treatment facilities when such facilities are found to be contaminated. Such persons can be
responsible for cleanup costs even if they never owned or operated the contaminated facility. We have been
named as a responsible party at three Superfund sites in Sunnyvale, California. Although we have not yet been,
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