AMD 2000 Annual Report Download - page 380

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
operations and local borrowings by FASL. However, to the extent that FASL is
unable to secure the necessary funds for FASL JV2 or FASL JV3, we may be
required to contribute cash or guarantee third-party loans in proportion to our
49.992 percent interest in FASL. As of December 31, 2000, we had $38 million in
loan guarantees outstanding with respect to these loans. These planned costs are
denominated in yen and are, therefore, subject to change due to foreign exchange
rate fluctuations. At the end of 2000, the exchange rate was approximately
112.52 yen to one U.S. dollar, which we used to calculate the amounts
denominated in yen.
We believe that cash flows from operations and current cash balances, together
with available external financing and the extension of existing facilities, will
be sufficient to fund operations and capital investments for at least the next
12 months.
On August 4, 2000, we received approximately $375 million for the sale of 90
percent of Legerity. The proceeds of the sale were subsequently used to
repurchase approximately $356 million aggregate principal amount of our Senior
Secured Notes.
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards, No. 133, "Accounting for Derivative
Instruments and Hedging Activities," (SFAS 133). SFAS No. 133, as amended by
SFAS Nos. 137 and 138, establishes methods of accounting for derivative
financial instruments and hedging activities related to those instruments as
well as other hedging activities. We will be required to implement SFAS No. 133
as of the beginning of our 2001 fiscal year. Our foreign currency exchange rate
hedging activities have been insignificant to date and SFAS No. 133 will not
have a material impact on our financial position, results of operations or cash
flows.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements," (SAB 101). SAB 101 provides guidance on
the recognition, presentation and disclosure of revenue in financial statements.
Our implementation of SAB 101 in 2000 had no impact on our financial position,
results of operations or cash flows for the year ending December 31, 2000.
In March 2000, FASB Interpretation, No. 44, "Accounting for Certain Transactions
Involving Stock Compensation-An Interpretation of APB Opinion No. 25," (FIN 44),
was issued. FIN 44 clarifies the application of APB No. 25 for certain
stock-based compensation issues. FIN 44 clarifies the definition of employee for
purposes of applying APB No. 25, the criteria for determining whether a plan
qualifies as a non-compensatory plan, the accounting consequences of various
modifications to the terms of a previously fixed option or award, and the
accounting for an exchange of share compensation awards in a business
combination, among other matters. FIN 44 was effective July 1, 2000, but certain
conclusions in this interpretation cover specific events that occurred after
either December 15, 1998 or January 12, 2000. The implementation of FIN 44 did
not have a significant impact on our financial position or results of
operations.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001