AMD 2008 Annual Report Download - page 32

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If we cannot generate sufficient revenues and operating cash flow or obtain external financing, we may
face a cash shortfall and be unable to make all of our planned investments in research and development.
Although we make substantial investments in research and development, we cannot be certain that we will
be able to develop, obtain or successfully implement new products and technologies on a timely basis. Our
ability to fund research and development expenditures depends on generating sufficient cash flow from
operations and the availability of external financing, if necessary. Our research and development expenditures,
together with ongoing operating expenses, will be a substantial drain on our cash flow and may decrease our cash
balances. If new competitors, technological advances by existing competitors or other competitive factors require
us to invest significantly greater resources than anticipated in our research and development efforts, our operating
expenses would increase. If we are required to invest significantly greater resources than anticipated in research
and development efforts without an increase in revenue, our operating results could decline. During 2008, we
incurred substantial losses that had a negative impact on cash balances. During 2008, net cash used in operating
activities was $692 million. As of December 27, 2008, we had approximately $1.1 billion in cash, cash
equivalents and marketable securities.
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. The recent developments in the credit markets may adversely impact our ability to obtain
financing when needed. Our inability to obtain needed financing or to generate sufficient cash from operations
may require us to abandon projects or curtail planned investments in research and development. If we curtail
planned investments in research and development or abandon projects, our products may fail to remain
competitive and we would 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 27, 2008, we had consolidated debt of $5.1 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, if any, 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 the adverse economic and industry conditions that we are
currently experiencing.
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 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 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 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
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