AMD 2007 Annual Report Download - page 26

Table of Contents
Our capital expenditures, together with ongoing operating expenses, will be a substantial drain on our cash flow and may decrease our cash balances. As of
December 29, 2007, we had $1.9 billion in cash, cash equivalents and marketable securities. During 2007, we incurred substantial losses that have had a negative
impact on cash balances. During 2007, net cash used in operating activities was $310 million and net cash used in investing activities was $1.7 billion.
The timing and amount of our capital requirements cannot be precisely determined at this time and will depend on a number of factors including future
demand for products, product mix, changes in semiconductor industry conditions and market competition. We regularly assess markets for external financing
opportunities, including debt and equity financing. Additional debt or equity financing may not be available when needed or, if available, may not be available on
satisfactory terms. Our inability to obtain needed financing or to generate sufficient cash from operations may require us to abandon projects or curtail capital
expenditures. If we curtail capital expenditures or abandon projects, we could be materially adversely affected.
We have a substantial amount of indebtedness that could adversely affect our financial position and prevent us from implementing our strategy or
fulfilling our contractual obligations.
As of December 29, 2007, we had consolidated debt of $5.3 billion. Our substantial indebtedness may:
• make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments;
• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate and other purposes;
• limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general
corporate purposes;
• require us to use a substantial portion of our cash flow from operations to make debt service payments;
• 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 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 be able 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, 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 indenture governing our 7.75% Senior Notes due 2012 (7.75% Notes) contains various covenants that limit our ability to:
• incur additional indebtedness, except specified permitted debt;
• pay dividends and make other restricted payments;
• make certain investments if a default or an event of default exists, or if specified financial conditions are not satisfied;
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008