AMD 2015 Annual Report Download - page 27

• 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 competitors with relatively less debt; and
• increase our vulnerability to the impact of adverse economic and industry conditions.
We enter into interest rate swap agreements from time to time to manage our exposure to interest rate risk.
These swap agreements involve risks, such as the risk that counterparties may fail to honor their obligations
under these arrangements, the risk that these arrangements may not be effective in reducing our exposure to
changes in interest rates and the risk that our exposure to interest rates may increase if interest rates increase.
The agreements governing our notes and our Secured Revolving Line of Credit impose restrictions on us that
may adversely affect our ability to operate our business.
The indentures governing our 7.75% Senior Notes due 2020 (7.75% Notes), 7.50% Senior Notes due 2022
(7.50% Notes), 7.00% Senior Notes due 2024 (7.00% Notes) and 6.75% Senior Notes due 2019 (6.75% Notes)
contain various covenants which limit our ability to, among other things:
• 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.
Our Secured Revolving Line of Credit also contains various covenants which limit our ability to, among
other things, make certain investments, merge or consolidate with other entities and permit certain subsidiaries
from incurring indebtedness. In addition, further restrictions apply when certain payment conditions (the
Payment Conditions) are not satisfied with respect to specified transactions, events or payments. The Payment
Conditions include that (i) no default or event of default exists and (ii) at all times during the 45 consecutive days
immediately prior to such transaction, event or payment and on a pro forma basis after giving effect to such
transaction, event or payment and any incurrence or repayment of indebtedness in connection therewith, the Loan
Parties’ Excess Cash Availability (as defined in the First Amended and Restated Loan Agreement) available cash
is greater than the greater of 20% of the total commitment amount and $100 million. If Payment Conditions are
not satisfied under certain circumstances, we will become subject to various additional covenants which limit our
ability to, among other things:
• create any liens upon any of the Loan Parties’ property (other than customary permitted liens and liens
on up to $1.5 billion of secured credit facilities debt (which amount includes our Secured Revolving
Line of Credit));
• declare or make cash distributions;
• create any encumbrance on the ability of a subsidiary to make any upstream payments;
• make asset dispositions other than certain ordinary course dispositions and certain supply chain finance
arrangements;
• make certain loans, make payments with respect to subordinated debt or certain borrowed money prior
to its due date; and
• become party to certain agreements restricting the Loan Parties’ ability to enter into any non-arm’s-
length transaction with an affiliate.
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