AMD 2004 Annual Report Download - page 73

Table of Contents
Unrealized gains and losses related to the foreign currency forward and option contracts for the year ended December 26, 2004 were not material. We do
not anticipate any material adverse effect on our consolidated financial position, results of operations or cash flows resulting from the use of these instruments in
the future. However, we cannot give any assurance that these strategies will be effective or that transaction losses can be minimized or forecasted accurately. In
particular, generally, we hedge only a portion of our foreign currency exchange exposure. Moreover, we determine our total foreign currency exchange exposure
using projections of long-term expenditures for items such as equipment and materials used in manufacturing. We cannot assure you that our hedging activities
will eliminate foreign exchange rate exposure. Failure to do so could have an adverse effect on our business, financial condition, results of operations and cash
flow.
In addition, even where revenues and expenses are matched, we must translate euro and yen denominated results of operations, assets and liabilities for our
foreign subsidiaries to U.S. dollars in our consolidated financial statements. Consequently, increases and decreases in the value of the U.S. dollar versus the euro
or yen will affect our reported results of operations and the value of our assets and liabilities in our consolidated balance sheet, even if our results of operations or
the value of those assets and liabilities has not changed in their original currency. These transactions could significantly affect the comparability of our results
between financial periods and/or result in significant changes to the carrying value of our assets, liabilities and shareholders’ equity.
The following table provides information about our foreign currency forward and option contracts as of December 26, 2004 and December 28, 2003. All
of our foreign currency forward contracts and option contracts mature within the next 12 months.
2004 2003
Notional
amount
Average
contract
rate
Estimated
fair value
Notional
amount
Average
contract
rate
Estimated
fair value
(Thousands except contract rates)
Foreign currency forward contracts:
Japanese yen $ 10,542 104.34 $ (73) $ — — $ —
European Union euro 11,846 1.1846 1,685 199,458 1.1398 17,616
Foreign currency option contracts:
Japanese yen $ — — $ — $ 58,260 115.00 $ 4,605
European Union euro 460,707 1.2869 28,375 163,400 1.1671 11,034
Total: $ 483,095 $ 29,987 $ 421,118 $ 33,255
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005