AMD 2009 Annual Report Download - page 113

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The table below displays reconciliation between statutory federal income taxes and the total provision
(benefit) for income taxes.
Tax Rate
(In millions except
for percentages)
2009
Statutory federal income tax expense .............................. $147 35.0%
State taxes, net of federal benefit ................................. 1 0.2%
Foreign income at other than U.S. rates ............................ (63) (15.0)%
Foreign losses not benefited ..................................... 306 73.1%
Foreign benefits not realized .................................... 122 29.1%
US IRC 186 special deduction for Intel settlement ................... (396) (94.5)%
Research and development credit monetization ...................... (5) (1.2)%
$ 112 26.7%
2008
Statutory federal income tax expense .............................. $(832) 35.0%
State taxes, net of federal benefit ................................. 1 0.0%
Foreign income at other than U.S. rates ............................ (74) 3.1%
Foreign losses not benefited ..................................... 670 (28.2)%
US net operating losses not benefited .............................. 309 (13.0)%
Research and development credit monetization ...................... (6) 0.2%
$ 68 (2.9)%
2007
Statutory federal income tax expense .............................. $(986) 35.0%
Foreign income at other than U.S. rates ............................ (65) 2.3%
Foreign operating losses and deductions utilized ..................... (74) 2.6%
Foreign operating losses not benefited ............................. 558 (19.8)%
US net operating losses not benefited .............................. 594 (21.1)%
$ 27 (1.0)%
The Company has made no provision for U.S. income taxes on approximately $742 million of cumulative
undistributed earnings of certain foreign subsidiaries through December 26, 2009 because it is the Company’s
intention to permanently reinvest such earnings. If such earnings were distributed, the Company would incur
additional income taxes of approximately $215 million (after an adjustment for foreign tax credits). These
additional income taxes may not result in income tax expense or a cash payment to the Internal Revenue Service,
but may result in the utilization of deferred tax assets that are currently subject to a valuation allowance.
The Company’s operations in Singapore, China and Malaysia currently operate under tax holidays, which
will expire in whole or in part at various dates through 2014. Certain of the tax holidays may be extended if
specific conditions are met. Due to current losses, the tax holidays did not impact the Company’s net income in
fiscal 2009, decreased the Company’s net loss by approximately $7 million in fiscal 2008 (less than $.02 per
share, diluted) and by $16 million in fiscal year 2007 (less than $0.03 per share, diluted).
In June 2006, the Financial Accounting Standards Board issued a standard related to the accounting for
uncertainty in income taxes. This standard clarifies the accounting for income taxes by prescribing a minimum
recognition threshold a tax position is required to meet before being recognized in the financial statements. It also
provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim
periods, disclosure and transition.
105