AMD 1996 Annual Report Download - page 235

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. INCOME TAXES
Provision (benefit) for income taxes consists of:
(Thousands) 1996 1995 1994
--------- ------- --------
Current:
U.S. Federal $(102,213) $58,683 $154,448
U.S. State and Local (1,026) 1,855 13,001
Foreign National and Local 1,097 10,594 7,350
Deferred:
U.S. Federal 16,280 1,295 (29,733)
U.S. State and Local 854 (3,167) (2,820)
Foreign National and Local -- 946 (14)
--------- ------- --------
Provision (benefit) for income taxes $ (85,008) $70,206 $142,232
========= ======= ========
Tax benefits resulting from the exercise of nonqualified stock options and the
disqualifying disposition of shares acquired under the Company's incentive stock
option and stock purchase plans reduced taxes currently payable as shown above
by approximately $2 million, $15 million and $37 million in 1996, 1995 and 1994,
respectively. Such benefits were credited to capital in excess of par value when
realized.
Under SFAS No. 109, deferred income taxes reflect the net tax effects of tax
carryforwards and temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income
tax purposes. Significant components of the Company's deferred tax assets and
liabilities as of December 29, 1996 and December 31, 1995 are as follows:
(Thousands) 1996 1995
-----------------------
Deferred tax assets:
Net operating loss carryovers
subject to limitation $ 50,225 $ 62,796
Deferred distributor income 45,594 40,583
Inventory reserves 30,145 29,665
Accrued expenses not currently deductible 17,297 35,639
Federal and state tax credit carryovers 57,959 6,249
Other 61,957 49,850
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Total deferred tax assets 263,177 224,782
Less: valuation allowance (22,062) (33,386)
--------- ---------
Net deferred tax assets 241,115 191,396
--------- ---------
Deferred tax liabilities:
Depreciation (154,217) (109,141)
Other (41,150) (19,373)
--------- ---------
Total deferred tax liabilities (195,367) (128,514)
--------- ---------
Net deferred tax assets $ 45,748 $ 62,882
========= =========
Realization of the Company's net deferred tax assets is dependent on future
taxable income. The Company believes that it is more likely than not that such
assets will be realized, however, ultimate realization could be negatively
impacted by market conditions and other variables not known or anticipated at
this time.
Pretax income from foreign operations was approximately $33 million in 1996, $61
million in 1995 and $46 million in 1994.
The net operating loss carryovers subject to limitation described above are the
result of certain ownership changes as defined in Section 382 of the Internal
Revenue Code. Availability of these carryovers generally occurs ratably from
1996 through 2001. The federal and state tax credit carryovers expire beginning
in the year 2003 through 2011.
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997