AMD 2008 Annual Report Download - page 83

In addition, upon consummation of the transactions contemplated by the Master Transaction Agreement, we
anticipate certain benefits to our business, including an increase in our cash balance, on a consolidated basis, by
approximately $2.2 billion, of which approximately $800 million will be available for current working capital
purposes and $1.4 billion will go to The Foundry Company to fund its operations, including capital expenditures.
In addition, although we will consolidate the accounts of The Foundry Company after the consummation of the
transactions, because we will be contributing to The Foundry Company our ownership interests in the German
subsidiaries that owe approximately $1.1 billion (as of December 27, 2008) of indebtedness, The Foundry
Company will be obligated to repay this indebtedness after the consummation of the transactions. The Foundry
Company will record $1 billion of the $1.4 billion as debt from the issuance of the Convertible Notes to ATIC
and $400 million as equity from the issuance of securities to ATIC. Because we will consolidate the accounts of
The Foundry Company after the consummation of the transactions contemplated by the Master Transaction
Agreement, our consolidated balance sheet will present the $1.1 billion (as of December 27, 2008) of transferred
indebtedness and the $1 billion of debt related to the issuance of the Convertible Notes as debt and the $400
million as non-controlling interest. However, The Foundry Company will have the obligation to repay the
transferred indebtedness and the Convertible Notes. Also, future wafer manufacturing capital expenditures will
be the responsibility of The Foundry Company, and after the consummation of the transactions, we will have the
option but not the obligation to provide future funding to The Foundry Company in an amount pro-rata to our
interest in the fully converted shares of The Foundry Company. ATIC has committed to provide additional equity
funding to The Foundry Company of at least $3.6 billion and up to $6.0 billion over the five years after the
closing of the transactions.
In November 2008, we repurchased $60 million in principal amount of our 6.00% Notes for approximately
$20 million in cash. In February 2009, we repurchased approximately $158 million in principal amount of the
6.00% Notes for approximately $57 million in cash. We may elect to continue to purchase or otherwise retire our
6.00% Notes, 5.75% Notes or 7.75% Notes with cash, stock or other assets from time to time in open market or
privately negotiated transactions, either directly or through intermediaries, or by tender offer, when we believe
the market conditions are favorable to do so. Such purchases may have a material effect on our liquidity,
financial condition and results of operations.
Over the longer term, should additional funding be required, such as to meet payment obligations of our
long-term debt when due, we may need to raise the required funds through borrowings or public or private sales
of debt or equity securities, which may be issued from time to time under an effective registration statement,
through the issuance of securities in a transaction exempt from registration under the Securities Act of 1933, or a
combination of one or more of the foregoing. However, recent global market and economic conditions have been
unprecedented and challenging with tighter credit conditions and recession in most major economies continuing
into 2009. Continued concerns about the systemic impact of potential long-term and wide-spread recession, the
availability and cost of credit, and the global housing and mortgage markets have contributed to increased market
volatility and diminished expectations for western and emerging economies. These conditions, combined with
volatile oil prices, declining business and consumer confidence and increased unemployment, have contributed to
volatility of unprecedented levels.
As a result of these market conditions, the cost and availability of credit has been and may continue to be
adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets
generally and the strength of counterparties specifically has led many lenders and institutional investors to
reduce, and in some cases, cease to provide credit to businesses and consumers. These factors have lead to a
decrease in spending by businesses and consumers alike, and a corresponding decrease in global infrastructure
spending. Continued turbulence in the U.S. and international markets and economies and prolonged declines in
business consumer spending may adversely affect our liquidity and financial condition, and the liquidity and
financial condition of our customers, including our ability to refinance maturing liabilities and access the capital
markets to meet liquidity needs.
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