AMD 2001 Annual Report Download - page 242

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tax benefits resulting from the exercise of nonqualified stock options and the
disqualifying disposition of shares issued under the Company's stock-based
compensation plans reduced taxes currently payable by $158.3 million in 2000.
Such benefits were credited to capital in excess of par value.
Deferred income taxes reflect the net tax effects of tax carryovers and
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the balances for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities as
of December 30, 2001 and December 31, 2000 are as follows:
-------------------------------------------------------------------------------------------
(Thousands) 2001 2000
---- ----
-------------------------------------------------------------------------------------------
Deferred tax assets:
Net operating loss carryovers $ 4,147 $ 3,934
Deferred distributor income 17,730 32,848
Inventory valuation 74,434 22,327
Accrued expenses not currently deductible 74,063 46,400
Investments 29,237 15,173
Federal and state tax credit carryovers 76,234 120,938
Other 62,189 67,073
------------------------------
Total deferred tax assets 338,034 308,693
Less: valuation allowance (24,559) -
---------- ----------
313,475 308,693
---------- ----------
Deferred tax liabilities:
Depreciation (175,878) (222,355)
Capitalized Interest (30,967) (40,790)
Unremitted foreign earnings (27,400) -
Other (28,637) (31,007)
---------- ----------
Total deferred tax liabilities (262,882) (294,152)
---------- ----------
Net deferred tax assets (liabilities) $ 50,593 $ 14,541
========== ==========
-------------------------------------------------------------------------------------------
In 2001, the valuation allowance for deferred tax assets increased by $25
million due to the stock option deduction arising from activity under the
Company's stock option plans, the benefits of which will increase capital in
excess of par value when realized. Pretax income from foreign operations was
approximately $52 million in 2001, $83 million in 2000 and $62 million in 1999.
The federal and state tax credit and net operating loss carryovers expire
beginning in the year 2003 through 2021.
The table below displays a reconciliation between statutory federal income taxes
and the total provision (benefit) for income taxes.
-------------------------------------------------------------
2001
------------------------------------- ------------- ---------
(Thousands except percent) Tax Rate
------------------------------------- ------------- ---------
Statutory federal income tax expense $(32,872) (35.0)%
State taxes, net of federal benefit (4,762) (5.1)
Tax-exempt foreign sales corporation
income (2,394) (2.5)
Residual U.S. tax on previously
reinvested earnings 21,663 23.1
Restructuring charges at other than
U.S. rates 11,082 11.8
Tax credits (6,018) (6.4)
Other (1,162) (1.3)
---------- ---------
$(14,463) (15.4)%
========== =========
-------------------------------------------------------------
Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002