AMD 2005 Annual Report Download - page 89

Table of Contents
Advertising Expenses. Advertising expenses for 2005, 2004 and 2003 were approximately $333 million, $225 million and $148 million, respectively.
Cooperative advertising funding obligations under customer incentive programs are accrued and the costs recorded at the same time the related revenue is
recognized. Cooperative advertising expenses are recorded as marketing, general and administrative expense to the extent the cash paid does not exceed the fair
value of the advertising benefit received. Any excess of cash paid over the fair value of the advertising benefit received is recorded as a reduction of revenue in
accordance with EITF 01-09.
Net Income (Loss) Per Common Share. Basic net income (loss) per common share is computed using the weighted-average number of common shares
outstanding. Diluted net income (loss) per common share is computed using the weighted-average number of common shares outstanding plus any potential
dilutive securities, if dilutive. Potential dilutive securities include stock options and shares issuable upon the conversion of convertible debt. The following table
sets forth the components of basic and diluted income (loss) per common share for the years ended:
2005 2004 2003
(In thousands except per share data)
Numerator:
Numerator for basic income (loss) per common share $ 165,483 $ 91,156 $ (274,490)
Effect of assumed conversion of 4.50% convertible notes:
Interest expense, net of tax 9,156 — —
Profit sharing expense adjustment, net of tax (355) — —
Numerator for diluted income (loss) per common share $ 174,284 $ 91,156 $ (274,490)
Denominator:
Denominator for basic income (loss) per share—weighted-average shares 400,004 358,886 346,934
Effect of dilutive securities:
Employee stock options 15,199 12,180 —
4.50% convertible notes 25,573 — —
Dilutive potential common shares 40,772 12,180 —
Denominator for diluted income (loss) per common share-adjusted weighted-average shares 440,776 371,066 346,934
Net income (loss) per common share:
Basic $ 0.41 $ 0.25 $ (0.79)
Diluted $ 0.40 $ 0.25 $ (0.79)
Potential dilutive common shares of approximately 21.4 million and 48.7 million for the years ended December 25, 2005 and December 26, 2004, which
were associated with the assumed conversion of outstanding convertible notes and debentures, were not included in the net income per common share
calculation, as their inclusion would have been antidilutive. The Company incurred a net loss for 2003. Potential dilutive common shares of approximately
79.0 million for 2003, which included both shares issuable upon the assumed exercise of outstanding employee stock options and the assumed conversion of
outstanding convertible notes and debentures, were not included in the net loss per common share calculation, as their inclusion would have been antidilutive.
Accumulated Other Comprehensive Income (Loss). Unrealized gains or losses on the Company’s available-for-sale securities, deferred gains and losses
on derivative financial instruments qualifying as cash flow hedges, changes in minimum pension liabilities, and foreign currency translation adjustments are
included in accumulated other comprehensive income.
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Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006