AMD 2004 Annual Report Download - page 91

Table of Contents
Concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up the
Company’s customer base, thus spreading the trade credit risk. Accounts receivable from Fujitsu accounted for approximately 23 percent and 33 percent of total
consolidated accounts receivable balance for fiscal 2004 and fiscal 2003. (See Note 3). Accounts receivable from the Company’s next largest customer accounted
for 16 percent and 11 percent of total consolidated accounts receivable balance for fiscal 2004 and fiscal 2003. However, the Company does not believe the
receivable balance from these customers represents a credit risk based on past collection experience. The Company manages credit risk through credit approvals,
credit limits and monitoring procedures. The Company performs in-depth credit evaluations of all new customers and requires letters of credit, bank or corporate
guarantees or advance payments, if deemed necessary, but generally does not require collateral from its customers.
The counterparties to the agreements relating to the Company’s derivative financial instruments consist of a number of large international financial
institutions. The Company does not believe that there is significant risk of nonperformance by these counterparties because the Company monitors their credit
ratings and limits the financial exposure and the amount of agreements entered into with any one financial institution. While the notional amounts of financial
instruments are often used to express the volume of these transactions, the potential accounting loss on these transactions if all counterparties failed to perform is
limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties, or
approximately $30 million, at December 26, 2004.
NOTE 6: Income Taxes
The provision (benefit) for income taxes consists of:
2004 2003 2002
(in thousands)
Current:
U.S. Federal $ 14,436 $ (20,288) $ —
U.S. State and Local — — —
Foreign National and Local 20,216 20,253 9,159
Total 34,652 (35) 9,159
Deferred:
U.S. Federal — 7,090 9,757
U.S. State and Local — — 24,602
Foreign National and Local (28,814) (4,119) 1,068
Total (28,814) 2,971 35,427
Provision for income taxes $ 5,838 $ 2,936 $ 44,586
Pre-tax loss from foreign operations was $30 million in 2004 after elimination of minority interest. Pre-tax income from foreign operations was $120
million in 2003 after elimination of minority interest. Pre-tax loss from foreign operations was $17 million in 2002. The current U.S. Federal provision includes
$8.6 million of income tax expense for dividends from foreign controlled corporations repatriated under the special one-time repatriation provisions of the
American Jobs Creation Act of 2004.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005