AMD 2008 Annual Report Download - page 100

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There has been significant deterioration and instability in the financial markets during 2008. This period of
extraordinary disruption and readjustment in the financial markets exposes us to additional investment risk. The
value and liquidity of the securities in which we invest could deteriorate rapidly and the issuers of such securities
could be subject to credit rating downgrades. In light of the current market conditions and these additional risks,
we actively monitor market conditions and developments specific to the securities and security classes in which
we invest. We believe that we take a conservative approach to investing our funds in that we invest only in
highly-rated securities with relatively short maturities and do not invest in securities we believe involve a higher
degree of risk. As of December 27, 2008, substantially all of our investments are AAA rated by at least one of the
rating agencies. While we believe we take prudent measures to mitigate investment related risks, such risks
cannot be fully eliminated, as there are circumstances outside of our control. Currently, we believe the current
credit market difficulties do not have a material impact on our financial position. However, a future degradation
in credit market conditions could have a material adverse effect on our financial position.
As of December 27, 2008, we had approximately $160 million investments in ARS after recording an other-
than-temporary impairment charge of $24 million during 2008. During 2008, the market conditions for these
ARS deteriorated due to the uncertainties in the credit markets. As a result, we were not able to sell our ARS as
scheduled in the auction market. See “Part II, Item 7—Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in this report for further information.
The following table presents the cost basis, fair value and related weighted-average interest rates by year of
maturity for our investment portfolio and debt obligations as of December 27, 2008:
Fiscal
2009
Fiscal
2010
Fiscal
2011
Fiscal
2012
Fiscal
2013 Thereafter Total
Fiscal 2008
Fair Value
(In millions except for percentages)
Investment Portfolio
Cash equivalents:
Fixed rate amounts . . . $ 252 $ — $ — $ — $— $ — $ 252 $ 252
Weighted-average
rate .......... 0.92% — — — — — 0.92%
Variable rate
amounts .......... $ 547 $— $— $ — $— $ — $ 547 $ 547
Weighted-average
rate .......... 1.94% — — — — — 1.94%
Marketable securities
Variable rate
amounts .......... $ 184 $— $— $ — $— $ — $ 184 $ 160
Weighted-average
rate .......... 2.86% — — — — — 2.86%
Long-term investments:
Fixed rate amounts . . . $ 31 $ — $ — $ — $— $ — $ 31 $ 31
Weighted-average
rate .......... 1.75% — — — — — 1.75%
Total Investment
Portfolio ........... $1,014 $ — $ — $ — $— $ — $1,014 $ 990
Debt Obligations
Fixed rate amounts . . . $ 28 $ — $ — $1,890 $— $2,140 $4,058 $1,365
Weighted-average
rate .......... 13.00% — — 6.16% — 7.21% 6.76%
Variable rate
amounts .......... $ 332 $290 $170 $ — $— $ — $ 792 $ 792
Weighted-
average
rate ........ 2.67% 3.47% 3.47% — — — 3.13%
Total Debt
Obligations ......... $ 360 $290 $170 $1,890 $— $2,140 $4,850 $2,157
90