AMD 1998 Annual Report Download - page 241

Notes to Consolidated Financial Statements
Realization of our net deferred tax assets is dependent on future taxable
income. We believe 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.
The valuation allowance increased $29 million in 1998 from 1997. The valuation
allowance for deferred tax assets includes $29 million attributable to stock
option deductions, the benefit of which will be credited to equity when
realized.
Pretax loss from foreign operations was approximately $36 million in 1998.
Pretax income from foreign operations was approximately $10 million in 1997 and
$33 million in 1996.
A portion of the net operating loss carryovers are subject to limitation.
Availability of $11 million of tax effected net operating loss carryovers occurs
primarily in 2000. The federal and state tax credit and net operating loss
carryovers expire beginning in the year 2002 through 2013.
The following is a reconciliation between statutory federal income taxes and the
total benefit for income taxes.
1998 1997 1996
---------------- ---------------- ---------------------
(Thousands except percent) Tax Rate Tax Rate Tax Rate
- ---------------------------------------------------------------------------------------------------------------
Statutory federal income tax benefit $(72,598) (35.0)% $(35,291) (35.0)% $(73,065) (35.0)%
State taxes net of federal benefit (8,000) (3.9) (7,500) (7.4) (520) (0.2)
Tax exempt Foreign Sales
Corporation income (940) (0.5) (1,369) (1.4) (2,283) (1.1)
Foreign income at other than U.S. rates (3,949) (1.9) (10,228) (10.1) (9,782) (4.7)
Tax credits (6,200) (3.0) (4,077) (4.0) (1,886) (0.9)
Other (191) - 3,310 3.2 2,528 1.2
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$(91,878) (44.3)% $(55,155) (54.7)% $(85,008) (40.7)%
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We have made no provision for income taxes on approximately $363 million of
cumulative undistributed earnings of certain foreign subsidiaries because it is
our intention to permanently invest such earnings. If such earnings were
distributed, we would accrue additional taxes of approximately $117 million.
Note 7. Debt
Significant elements of revolving lines of credit are:
(Thousands except percent) 1998 1997
- -----------------------------------------------------------------------------------------
Committed:
Three-year secured revolving line of credit $ 150,000 $ 150,000
Uncommitted:
Portion of unsecured lines of credit available
to foreign subsidiaries 68,980 67,052
Amounts outstanding at year-end under lines of credit:
Short-term 6,017 6,601
Short-term borrowings:
Average daily borrowings 5,386 10,795
Maximum amount outstanding at any month-end 6,017 13,846
Weighted-average interest rate 1.18% 1.75%
Average interest rate on amounts outstanding at year-end 1.06% 2.01%
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Source: ADVANCED MICRO DEVIC, 10-K, March 29, 1999