AMD 2006 Annual Report Download - page 106

Table of Contents
Advertising Expenses. Advertising expenses for fiscal 2006, 2005 and 2004 were approximately $515 million, $333 million and $225 million.
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 01-9.
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:
2006 2005 2004
(In millions except per share data)
Numerator:
Numerator for basic income (loss) per common share $ (166) $ 165 $ 91
Effect of assumed conversion of 4.50% Convertible Senior Notes Due 2007:
Interest expense, net of tax — 9 —
Profit sharing expense adjustment, net of tax (1) — — —
Numerator for diluted income (loss) per common share $ (166) $ 174 $ 91
Denominator:
Denominator for basic income (loss) per share—weighted-average shares 492 400 359
Effect of dilutive securities:
Employee stock options — 15 12
4.50% Convertible Senior Notes Due 2007 — 26 —
Dilutive potential common shares — 41 12
Denominator for diluted income (loss) per common share-adjusted weighted-average shares 492 441 371
Net income (loss) per common share:
Basic $ (0.34) $ 0.41 $ 0.25
Diluted $ (0.34) $ 0.40 $ 0.25
(1) Less than $1 million
The Company incurred a net loss for 2006. Potential dilutive common shares of approximately 55 million for 2006, which included both shares issuable
upon the assumed exercise of outstanding employee stock options and the assumed conversion of outstanding convertible securities, were not included in the net
loss per common share calculation, as their inclusion would have been antidilutive. Potential dilutive common shares of approximately 21 million and 49 million
for the years ended December 25, 2005 and December 26, 2004, which were associated with the assumed conversion of outstanding convertible securities, were
not included in the net income 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 (loss).
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007