AMD 2013 Annual Report Download - page 62

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FINANCIAL CONDITION
Liquidity
Our cash, cash equivalents and marketable securities, including long-term marketable securities, were $1.2
billion as of December 28, 2013 and December 29, 2012. During 2013, our $175 million payment related to GF’s
limited waiver of exclusivity and $40 million payment related to GF’s waiver of a portion of our obligations for
wafer purchase commitments for the fourth quarter of 2012 were partially offset by proceeds of $154 million
related to building sales, net of purchases of property and equipment. Also, during the fourth quarter of 2013, we
entered into licenses and settlement agreements regarding patent-related matters for which we received in
aggregate $48 million in net cash. The percentage of cash, cash equivalents and marketable securities held
domestically was 91% as of December 28, 2013.
Our long-term marketable securities currently consist of corporate bonds and money market funds. The
corporate bonds have maximum stated maturities of two years. As of December 28, 2013, the fair value of these
long-term marketable securities was $90 million. All of the long-term marketable securities were held in the
United States.
Our intent is to hold our long-term marketable securities for greater than one year, and we do not intend to
use them in current operations. During 2013, net proceeds from the maturity of our long-term marketable
securities were $91 million. As a result of narrowing investment yields, we intend to continue to evaluate our
investment strategy related to amounts we designate as long-term as such investments mature.
As of December 28, 2013, our total debt was $2.1 billion, which reflects a debt discount adjustment of $43
million on our 6.00% Notes and 8.125% Senior Notes due 2017 (8.125% Notes). In the fourth quarter of 2013,
we established a senior secured asset based line of credit for a principal amount up to $500 million (Secured
Revolving Line of Credit). As of December 28, 2013, our outstanding balance under our Secured Revolving Line
of Credit was $55 million. We repurchased $50 million of outstanding principal amount of our 6.00% Notes
(which is a portion of our outstanding 6.00% Notes). Subsequent to December 28, 2013, we repurchased an
additional $64 million in principal amount of our 6.00% Notes.
For 2013, our net cash used in operating activities was $148 million and our non-GAAP free cash flow was
negative $232 million. For 2012, our net cash used in operating activities was $338 million and our non-GAAP
free cash flow was negative $471 million. Free cash flow is a non-GAAP measure which we calculate by
adjusting GAAP net cash provided by (used in) operating activities for capital expenditures, which were $84
million for 2013 and $133 million for 2012. The improvement in our non-GAAP free cash flow for 2013 as
compared to 2012 was primarily attributable to a $190 million decrease in net cash used in operating activities as
well as a $49 million decrease in capital expenditures.
We calculate and communicate non-GAAP free cash flow because our management believes it is important
for investors to understand the nature of these cash flows. Our calculation of non-GAAP free cash flow may or
may not be consistent with the calculation of this measure by other companies in the same industry. Investors
should not view non-GAAP free cash flow as an alternative to GAAP liquidity measures of cash flows from
operating or financing activities.
In light of the macroeconomic environment, in the fourth quarter of 2012, we announced a restructuring
plan to reduce our operating expenses and better position us competitively. As a result of our restructuring, we
decreased operating expenses by approximately 31% from the first quarter of 2012 to the fourth quarter of 2013.
With the impact of our restructuring plan, the liquidity provided by our Secured Revolving Line of Credit and the
availability of external financing, we believe our cash, cash equivalents and marketable securities, including
long-term marketable securities, balance will be sufficient to fund operations, including capital expenditures,
over the next twelve months.
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