AMD 2013 Annual Report Download - page 42

Environmental laws are complex, change frequently and have tended to become more stringent over time.
For example, the EU and China are two among a growing number of jurisdictions that have enacted restrictions
on the use of lead and other materials in electronic products. These regulations affect semiconductor devices and
packaging. As regulations restricting materials in electronic products continue to increase around the world, there
is a risk that the cost, quality and manufacturing yields of products that are subject to these restrictions, may be
less favorable compared to products that are not subject to such restrictions, or that the transition to compliant
products may produce sudden changes in demand, which may result in excess inventory.
Recent U.S. legislation includes disclosure and reporting requirements for companies who use “conflict”
minerals that originate from the Democratic Republic of Congo or adjoining countries. We will likely incur
additional costs associated with complying with these requirements, such as costs related to determining the
source of any conflict minerals used in our products, auditing the process and reporting to our customers and the
U.S. government. Also, since our supply chain is complex, we may face reputational challenges if we are unable
to sufficiently verify the origins of the subject minerals. Moreover, we are likely to encounter challenges to
satisfy those customers who require that all of the components of our products are certified as “conflict free,” and
if we cannot satisfy these customers, they may choose a competitor’s products. In January 2014, Intel announced
that all of its microprocessor products are “conflict free.” Our first “conflict” minerals report covering the 2013
calendar year is due to the SEC by June 2, 2014.
A number of jurisdictions including the EU, Australia and China are developing or have finalized market
entry or public procurement regulations for computers and servers based on ENERGY STAR specifications as
well as additional energy consumption limits. There is the potential for certain of our products being excluded
from some of these markets which could materially adversely affect us.
While we have budgeted for foreseeable associated expenditures, we cannot assure you that future
environmental legal requirements will not become more stringent or costly in the future. Therefore, we cannot
assure you that our costs of complying with current and future environmental and health and safety laws, and our
liabilities arising from past and future releases of, or exposure to, hazardous substances will not have a material
adverse effect on us.
Our business is subject to potential tax liabilities.
We are subject to income taxes in the United States, Canada and other foreign jurisdictions. Significant
judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our
business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Although we believe our tax estimates are reasonable, we cannot assure you that the final determination of any
tax audits and litigation will not be materially different from that which is reflected in historical income tax
provisions and accruals. Should additional taxes be assessed as a result of an audit or litigation, there could be a
material adverse effect on our cash, income tax provision and net income in the period or periods for which that
determination is made.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
At December 28, 2013, we owned principal research and development, engineering, manufacturing,
warehouse and administrative facilities located in Canada, China and Malaysia. These facilities totaled
approximately 934,000 square feet.
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