AMD 2008 Annual Report Download - page 33

equity or borrow more funds on terms acceptable to us, if at all. The current credit market crisis and other macro-
economic challenges affecting the global economy may further adversely impact our ability to borrow sufficient
funds or sell assets or equity.
The agreements governing our borrowing arrangements impose restrictions on us that may adversely
affect our ability to operate our business.
The indenture governing our 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;
• 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 certain asset sales;
• enter into certain types of transactions with affiliates; and
• consolidate, merge or sell assets as an entirety or substantially as an entirety unless specified conditions
are met.
In addition, our Fab 36 Term Loan contains restrictive covenants that prohibit our German subsidiary, AMD
Fab 36 Limited Liability Company & Co. KG, and its affiliated limited partners to pay us dividends and other
payments and also require us to maintain specified financial ratios when group consolidated cash is below
specified amounts. Our ability to satisfy these covenants, financial ratios and tests can be affected by events
beyond our control. We cannot assure you that we will meet those requirements. A breach of any of these
covenants, financial ratios or tests could result in a default under the Fab 36 Term Loan agreement.
The agreements governing our borrowing arrangements contain cross-default provisions whereby a default
under one agreement would likely result in cross defaults under agreements covering other borrowings. For
example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an
amount in excess of $50 million would cause a cross default under the indentures governing our 5.75% Notes,
6.00% Notes and 7.75% Notes. The occurrence of a default under any of these borrowing arrangements would
permit the applicable or note holders to declare all amounts outstanding under those borrowing arrangements to
be immediately due and payable. If the note holders or the trustee under the indentures governing our 5.75%
Notes, 6.00% Notes or 7.75% Notes accelerate the repayment of borrowings, we cannot assure you that we will
have sufficient assets to repay those borrowings and our other indebtedness.
If we are unable to successfully implement our cost cutting efforts, our business could be materially
adversely affected.
We incurred a net loss of approximately $3.1 billion for 2008. We have taken and plan to continue to
undertake a number of actions to decrease our expenses. For example, in the second and fourth fiscal quarters of
2008 we implemented restructuring plans to reduce our expenses. The plans primarily involve the termination of
employees. The restructuring plan implemented in the fourth fiscal quarter of 2008 involves additional cost
reduction actions that either have taken place during the fourth fiscal quarter of 2008 or will take place in 2009.
The restructuring charges for the restructuring plan implemented during the second fiscal quarter of 2008
represent primarily severance and costs related to the continuation of certain employee benefits and the costs
related to the termination of a contract. The restructuring charges for the restructuring plan implemented during
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