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Table of Contents
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 lower of the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties,
or approximately $10 million, at December 25, 2005.
NOTE 7: Income Taxes
The provision (benefit) for income taxes consists of:
2005 2004 2003
(In thousands)
Current:
U.S. Federal $ (4,309) $ 14,436 $ (20,288)
U.S. State and Local 750 — —
Foreign National and Local 12,569 20,216 20,253
Total 9,010 34,652 (35)
Deferred:
U.S. Federal (1,629) — 7,090
U.S. State and Local — — —
Foreign National and Local (14,023) (28,814) (4,119)
Total (15,652) (28,814) 2,971
(Benefit) provision for income taxes $ (6,642) $ 5,838 $ 2,936
Pre-tax loss from foreign operations was $207 million in 2005 and $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.
95
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006