AMD 2009 Annual Report Download - page 31

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.
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 health of the credit markets may adversely impact our ability to obtain financing when
needed. In addition, downgrades from credit rating agencies such as Moody’s or Standard & Poor’s, which we
experienced during the second quarter of 2009, may adversely impact our ability to get external financing or the
terms of such financing. Credit agency downgrades may also impact relationships with our suppliers, who may
limit our credit lines. 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 which could adversely affect our financial position and
prevent us from implementing our strategy or fulfilling our contractual obligations.
We currently have a substantial amount of indebtedness. Our debt and capital lease obligations as of
December 26, 2009 were $4.7 billion, of which $2.0 billion represented GF obligations.
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, such as those 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 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 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 equity or
borrow more funds on terms acceptable to us, if at all.
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