AMD 2002 Annual Report Download - page 58

Table of Contents
The following are the components of accumulated other comprehensive income (loss):
2002 2001
(Thousands)
Net unrealized gain on investments, net of taxes of $1,250 in 2002 and $2,939 in 2001 $ 2,152 $ 5,071
Net unrealized gain (loss) on cash flow hedges, net of taxes of $17,511 in 2002 and $0 in 2001 29,079 (3,399)
Cumulative translation adjustments 18,674 (134,919)
$ 49,905 $ (133,247)
Stock-based Compensation and Employee Stock Plans. The Company uses the intrinsic value method under Accounting Principles Board Opinion No.
25, “Accounting for Stock Issued to Employee” (APB 25), to account for stock options issued to its employees under its stock option plans and amortizes
deferred compensation, if any, over the vesting period of the options. Compensation expense resulting from the issuance of fixed term stock option awards is
measured as the difference between the exercise price of the option and the fair market value of the underlying share of company stock subject to the option on
the award’s grant date. The Company has elected to make pro forma fair value disclosures as permitted by Statement of Financial Accounting Standard No. 123,
“Accounting for Stock-Based Compensation” (SFAS 123). The Company estimates the fair value of its stock-based awards to employees using a Black-Scholes
option pricing model. See Note 10 for detailed assumptions used by the Company to compute the fair value of stock-based awards for purposes of pro forma
disclosures under SFAS 123.
2002 2001 2000
(Thousands except per share amounts)
Net income/(loss)—as reported $ (1,303,012) $ (60,581) $ 983,026
Plus: compensation expense recorded under APB 25 2,891 4,592 4,372
Less: SFAS 123 compensation expenses (149,827) (122,929) (156,903)
Net income/(loss)—pro forma $ (1,449,948) $ (178,918) $ 830,495
Basic net income/(loss) per share—as reported $ (3.81) $ (0.18) $ 3.18
Diluted net income/(loss) per share—as reported $ (3.81) $ (0.18) $ 2.89
Basic net income/(loss) per share—pro forma $ (4.24) $ (0.54) $ 2.68
Diluted net income/(loss) per share—pro forma $ (4.24) $ (0.54) $ 2.37
New Accounting Pronouncements. In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141,
“Business Combinations” (SFAS 141), and Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142).
SFAS 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. Under SFAS 142, goodwill and
intangible assets with indefinite lives are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment.
Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives (but with no maximum life). The
amortization provisions of SFAS 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets
acquired prior to July 1, 2001, the amortization and impairment provisions of SFAS 142 are effective upon the adoption of SFAS 142. The Company adopted
SFAS 141 and SFAS 142 at the beginning of 2002. These accounting standards did not have a material effect on the Company’s consolidated financial
statements.
In August 2001, the Financial Accounting Standards Board issued Statement of Accounting Standards No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets” (SFAS 144), which supersedes both Statement of Financial Accounting Standards No. 121, “Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” (SFAS 121) and the accounting and reporting provisions of APB Opinion No. 30, “Reporting
the Results of Operations—Reporting the Effects of Disposal of a Segment of a
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003