AMD 2005 Annual Report Download - page 90

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Table of Contents
The following are the components of accumulated other comprehensive income:
2005 2004
(In thousands)
Net unrealized gains on available-for-sale securities, net of taxes of $1,010 in 2005
and $1,010 in 2004 $ 4,326 $ 1,997
Net unrealized gains (losses) on cash flow hedges, net of taxes of $0 in 2005 and $0 in
2004 (2,288) 30,200
Minimum pension liability (759) (3,874)
Cumulative translation adjustments 162,357 352,647
$ 163,636 $ 380,970
Stock-based Compensation and Employee Stock Plans. The Company has elected to use the intrinsic value method under Accounting Principles Board
Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), as permitted by Statement of Financial Accounting Standard No. 123, “Accounting for
Stock-Based Compensation” (SFAS 123), subsequently amended by SFAS 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” to
account for stock options issued to its employees under its stock option plans, and amortizes deferred compensation, if any, ratably over the vesting period of the
options.
Compensation expense resulting from the issuance of fixed term stock option awards is measured as the difference between the exercise price of the option
and the fair market value of the underlying share of common stock subject to the option on the award’s grant date. The Company also makes pro forma fair value
disclosures required by SFAS 123 which reflects the impact on net income (loss) and net income (loss) per share had the Company applied the fair value method
of accounting for its stock-based awards to employees. The Company estimates the fair value of its stock-based awards to employees using a Black-Scholes
option pricing model. See Note 11 for detailed assumptions used by the Company to compute the fair value of stock-based awards for purposes of pro forma
disclosures under SFAS 123. Following is the pro forma effect on net income (loss) and net income (loss) per share for all periods presented had the Company
applied SFAS 123’s fair value method of accounting for stock-based awards issued to its employees.
2005 2004 2003
(In thousands except per share
amounts)
Net income (loss)—as reported $ 165,483 $ 91,156 $ (274,490)
Add: employee stock-based compensation expense included in reported
net income (loss), net of related tax effects under APB 25 5,097 995 1,920
Less: employee stock-based compensation expense determined under
the fair-value based method, net of related tax effects. (122,055) (155,519) (80,464)
Net income (loss)—pro forma $ 48,525 $ (63,368) $ (353,034)
Basic net income (loss) per common share—as reported $ 0.41 $ 0.25 $ (0.79)
Diluted net income (loss) per common share—as reported $ 0.40 $ 0.25 $ (0.79)
Basic net income (loss) per common share—pro forma $ 0.12 $ (0.18) $ (1.02)
Diluted net income (loss) per common share—pro forma $ 0.12 $ (0.18) $ (1.02)
On April 27, 2005, the Company accelerated the vesting of all employee stock options outstanding under the Company’s 2004 Equity Incentive Plan and
the Company’s prior equity compensation plans that had exercise prices per share higher than the closing price of the Company’s common stock on April 27,
2005, which was
85
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006