AMD 2011 Annual Report Download - page 29

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. In August 2012, the
remaining outstanding aggregate principal amount of our 5.75% Convertible Senior Notes due 2012 (5.75%
Notes) of $485 million will mature. 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.
Our debt instruments impose restrictions on us that may adversely affect our ability to operate our business.
The indentures governing our 8.125% Notes and 7.75% Senior Notes due 2020 (7.75% Notes) contain
various covenants which limit our ability to:
• incur additional indebtedness;
• pay dividends and make other restricted payments;
• make certain investments, including investments in our unrestricted subsidiaries;
• 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 sales of assets;
• enter into certain types of transactions with affiliates; and
• consolidate or merge or sell our assets as an entirety or substantially as an entirety.
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 7.75% Notes,
8.125% Notes, 5.75% Notes and 6.00% Notes. The occurrence of a default under any of these borrowing
arrangements would permit the applicable 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 7.75% Notes, 8.125% Notes, 5.75% Notes or 6.00% Notes accelerate the repayment of
borrowings, we cannot assure you that we will have sufficient assets to repay those borrowings.
In the event of a change of control, we may not be able to repurchase our outstanding debt as required by the
applicable indentures, which would result in a default under the indentures.
Upon a change of control, we will be required to offer to repurchase all of the 7.75% Notes and 8.125%
Notes then outstanding at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to,
but excluding, the repurchase date. Moreover, the indentures governing our 5.75% Notes and 6.00% Notes
require us to offer to repurchase these securities upon certain change of control events. As of December 31, 2011,
the aggregate outstanding principal amount of the outstanding 8.125% Notes, 5.75% Notes, 7.75% Notes and
6.00% Notes was $2.1 billion. Future debt agreements may contain similar provisions. We may not have the
financial resources to repurchase our indebtedness.
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