AMD 2002 Annual Report Download - page 64

Table of Contents
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 29, 2002 and December 30, 2001 are as follows:
2002 2001
(Thousands)
Deferred tax assets:
Net operating loss carryovers $ 307,802 $ 4,147
Deferred distributor income 19,774 17,730
Inventory valuation 85,173 74,434
Accrued expenses not currently deductible 110,758 74,063
Investments 43,805 29,237
Federal and state tax credit carryovers 128,306 76,234
Other 89,777 62,189
Total deferred tax assets 785,395 338,034
Less: valuation allowance (560,063) (24,559)
225,332 313,475
Deferred tax liabilities:
Depreciation (128,612) (175,878)
Capitalized Interest (35,245) (30,967)
Unremitted foreign earnings (30,400) (27,400)
Other (31,075) (28,637)
Total deferred tax liabilities (225,332) (262,882)
Net deferred tax assets (liabilities) $ — $ 50,593
In 2002, the valuation allowance for deferred tax assets increased by $536 million to provide a valuation allowance against all of the Company’s net
deferred tax assets. Approximately $26 million of the valuation allowance for deferred tax assets is for 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. 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. In 2000, the valuation allowance for deferred tax assets decreased by $215 million due to the realization of
tax benefits from operating losses incurred during 1999. Pre-tax loss from foreign operations was $17 million in 2002. Pre-tax income from foreign operations
was approximately $52 million in 2001 and $83 million in 2000.
As of December 29, 2002, the Company had federal and state net operating loss carryforwards of approximately $865 million and $89 million,
respectively. The Company also had federal and state tax credit carryforwards of approximately $92 million and $36 million, respectively. The net operating loss
and tax credit carryforwards will expire at various dates beginning in 2005 through 2022, if not utilized.
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003