AMD 2013 Annual Report Download - page 34

In the event of a change of control, we may not be able to repurchase our outstanding debt as required by the
applicable indentures and our Secured Revolving Line of Credit, which would result in a default under the
indentures and our Secured Revolving Line of Credit.
Upon a change of control, we will be required to offer to repurchase all of our 7.75% Notes, 8.125% Notes
and 7.50% Notes then outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, up to, but excluding, the repurchase date, and to offer to repurchase all of our 6.00% Notes then outstanding
at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but excluding the
repurchase date. In addition, a change of control would be an event of default under our Secured Revolving Line
of Credit. As of December 28, 2013, $55 million was outstanding under our Secured Revolving Line of Credit
and $2.0 billion was outstanding under our notes. Future debt agreements may contain similar provisions. We
may not have the financial resources to repurchase our outstanding notes and prepay all of our outstanding
obligations under our Secured Revolving Line of Credit.
The semiconductor industry is highly cyclical and has experienced severe downturns that have materially
adversely affected, and may continue to materially adversely affect, our business in the future.
The semiconductor industry is highly cyclical and has experienced significant downturns, often in
conjunction with constant and rapid technological change, wide fluctuations in supply and demand, continuous
new product introductions, price erosion and declines in general economic conditions. We have incurred
substantial losses in recent downturns, due to:
• substantial declines in average selling prices;
• the cyclical nature of supply/demand imbalances in the semiconductor industry;
• a decline in demand for end-user products (such as PCs) that incorporate our products; and
• excess inventory levels.
Global economic uncertainty and weakness have also impacted the semiconductor market as consumers and
businesses have deferred purchases, which negatively impacted demand for our products. Our financial
performance has been, and may in the future be, negatively affected by these downturns. For example, our net
revenue in the second half of 2012 and 2013 was adversely affected, in part, by the overall weakness in the
global economy and weak consumer demand for end-user PC products, which impacted sales. We believe that
consumer PC market conditions will remain challenging.
The growth of our business is also dependent on continued demand for our products from high-growth,
emerging global markets. Our ability to be successful in such markets depends in part on our ability to establish
adequate local infrastructure, as well as our ability to cultivate and maintain local relationships in these markets.
If demand from these markets is below our expectations, sales of our products may decrease, which would have a
material adverse effect on us.
Our operating results are subject to quarterly and seasonal sales patterns.
A substantial portion of our quarterly sales have historically been made in the last month of the quarter. This
uneven sales pattern makes prediction of revenues for each financial period difficult and increases the risk of
unanticipated variations in quarterly results and financial condition. In addition, our operating results tend to vary
seasonally. For example, historically, first quarter PC product sales are generally lower than fourth quarter sales.
In addition, with respect to our semi-custom SOC products for game consoles, we expect sales patterns to follow
the seasonal trends of a consumer business with sales in the first half of the year being lower than sales in the
second half of the year. Many of the factors that create and affect quarterly and seasonal trends are beyond our
control.
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