AMD 2004 Annual Report Download - page 58

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• place us at a competitive disadvantage compared to our less leveraged competitors; and
• increase our vulnerability to the impact of adverse economic and industry conditions.
We and our subsidiaries may be able to incur substantially more debt, including secured debt, in the future.
Subject to the restrictions in the agreements governing our existing indebtedness, we and our subsidiaries may incur significant additional debt, including
secured debt, in the future. In particular, as of December 26, 2004, we and our subsidiaries would have had the following additional borrowings available:
• Up to $100 million under our revolving credit facility. Amounts borrowed under this facility are secured by all of our accounts receivable, inventory,
general intangibles (excluding intellectual property) and the related proceeds, excluding Spansion’s accounts receivable, inventory and general
intangibles.
• Spansion Japan had up to 15 billion yen (approximately $145 million as of December 26, 2004) available under a revolving credit facility.
• AMD Fab 36 KG will have the ability, subject to achieving certain milestones, to borrow up to $947 million (based on an exchange rate of 0.739 euro
to one U.S. dollar as of December 26, 2004) from a consortium of banks under the Fab 36 Loan Agreements during 2006 and 2007.
Although the terms of the agreements governing our existing indebtedness contain restrictions on the incurrence of additional debt, these restrictions are
subject to a number of important exceptions, and debt incurred in compliance with these restrictions could be substantial.
We may not be able to generate sufficient cash to service our debt obligations.
Our ability to make payments on and to refinance our debt, or our guarantees of other parties’ debts, will depend on our financial and operating
performance, which may fluctuate significantly from quarter to quarter, and is subject to prevailing economic conditions and financial, business and other factors,
many of which are beyond our control. We cannot assure you that we will continue to generate sufficient cash flow or that we will be able to borrow funds in
amounts sufficient to enable us to service our debt, or to meet our working capital and capital expenditure requirements. If we are not able to generate sufficient
cash flow from operations or to borrow sufficient funds to service our debt due to borrowing base restrictions or otherwise, we may be required to sell assets or
equity, reduce capital expenditures, refinance all or a portion of our existing debt or obtain additional financing. We cannot assure you that we will be able to
refinance our debt, sell assets or equity or borrow more funds on terms acceptable to us, if at all.
Our debt instruments impose restrictions on us that may adversely affect our ability to operate our business.
The indentures governing our 4.50% Notes, 4.75% Debentures and 7.75% Notes contain various covenants that limit our ability to:
• incur additional indebtedness;
• pay dividends and make other restricted payments;
• make certain investments, including investments in our unrestricted subsidiaries;
• create or permit certain liens;
• create or permit restrictions on the ability of certain restricted subsidiaries to pay dividends or make other distributions to us;
• use the proceeds from sales of assets;
• enter into certain types of transactions with affiliates; and
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005