AMD 2013 Annual Report Download - page 31

• declare or make any distributions;
• create any encumbrance on the ability of a subsidiary to make any upstream payments;
• make asset dispositions other than certain ordinary course dispositions;
• make certain loans, make payments with respect to subordinated debt or certain borrowed money prior
to its due date;
• become a party to certain agreements restricting the Borrowers’ ability to incur or repay debt, grant
liens, make distributions; and
• modify loan agreements or enter into any non-arm’s-length transaction with an affiliate.
During a Domestic Cash Trigger Period, we also would be required to maintain a fixed charge coverage
ratio each four-fiscal quarter period ending on and after March 29, 2014.
The agreements governing our notes and our Secured Revolving Line of Credit contain cross-default
provisions whereby a default under one agreement would likely result in cross defaults under agreements
covering other borrowings. For example, the occurrence of a default with respect to any indebtedness or any
failure to repay debt when due in an amount in excess of $50 million would cause a cross default under the
indentures governing our 7.75% Notes, 8.125% Notes, 7.50% Notes and 6.00% Notes, as well as under our
Secured Revolving Line of Credit. The occurrence of a default under any of these borrowing arrangements would
permit the applicable note holders or the lenders under our Secured Revolving Line of Credit to declare all
amounts outstanding under those borrowing arrangements to be immediately due and payable. If the note holders
or the trustee under the indentures governing our 7.75% Notes, 8.125% Notes, 7.50% Notes or 6.00% Notes or
the lenders under our Secured Revolving Line of Credit accelerate the repayment of borrowings, we cannot
assure you that we will have sufficient assets to repay those borrowings.
The markets in which our products are sold are highly competitive.
The markets in which our products are sold are very competitive, and delivering the latest and best products
to market on a timely basis is critical to achieving revenue growth. We believe that the main factors that
determine our product competitiveness are timely product introductions, product quality (including enabling state
of the art visual experience), power consumption (including battery life), reliability, selling price, speed, size (or
form factor), cost, adherence to industry standards (and the creation of open industry standards), software and
hardware compatibility and stability and brand awareness.
We expect that competition will continue to be intense due to rapid technological changes, frequent product
introductions by our competitors of products that may provide better performance or may include additional
features that render our products uncompetitive and aggressive pricing by competitors, especially during
challenging economic times. Some competitors may have greater access or rights to companion technologies,
including interface, processor and memory technical information. With the introduction of our APU products and
other competing solutions, we believe that demand for additional discrete graphic cards may decrease in the
future due to both the improvement of the quality of our competitor’s integrated graphics and the graphics
performance of our APUs. If competitors introduce competitive new products into the market before us, demand
for our products could be adversely impacted and our business could be adversely affected.
We are implementing a long-term business strategy to refocus our business to address markets beyond our
core PC market to the faster growing ultra low-power client, embedded, professional graphics, semi-custom and
dense server markets. For example, our semi-custom products are developed and customized for our customers
particular needs. However, we are entering markets with new and different competitors who may be able to adapt
more quickly to customer requirements and emerging technologies. We cannot assure you that we will be able to
compete successfully against current or new competitors who may have stronger positions in these new markets
or superior ability to anticipate customer requirements and emerging industry trends.
23