AMD 2002 Annual Report Download - page 46

Table of Contents
headquarters, assembly operations in California and research and development activities related to process technologies are located near major earthquake fault
lines. In the event of a major earthquake, we could experience business interruptions, destruction of facilities and/or loss of life, all of which could materially
adversely affect us.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. In order to reduce this interest
rate risk, we usually invest our cash in investments with short maturities. As of December 29, 2002, substantially all of our investments in our portfolio were
short term investments and they consisted primarily of money market funds, short term corporate notes, short term money market auction rate preferred stocks
and short term federal agency notes.
The majority of our debt obligations are fixed rate and long term. We continually monitor market conditions and enter into hedges when appropriate. We
do not currently have any hedges of interest rate risk in place. We do not use derivative financial instruments for speculative or trading purposes.
Default Risk. We mitigate default risk by investing in only the highest credit quality securities and by constantly positioning our portfolio to respond
appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active
secondary or resale markets to ensure portfolio liquidity. As stated in our investment policy, we are averse to principal loss and ensure the safety and preservation
of our invested funds by limiting default risk and market risk.
We use proceeds from debt obligations primarily to support general corporate purposes, including capital expenditures and working capital needs.
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003