AMD 2006 Annual Report Download - page 120

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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 $9 million, at December 31, 2006.
NOTE 8: Income Taxes
The provision (benefit) for income taxes consists of:
2006 2005 2004
(In millions)
Current:
U.S. federal $ 1 $ (4) $ 15
U.S. state and local 1 1 —
Foreign national and local 23 12 20
Total 25 9 35
Deferred:
U.S. federal 15 (2) —
U.S. state and local — — —
Foreign national and local (17) (14) (29)
Total (2) (16) (29)
Provision (benefit) for income taxes $ 23 $ (7) $ 6
Pre-tax loss from foreign operations was $365 million in 2006. Pre-tax loss from foreign operations was $202 million in 2005 and $83 million in 2004
after elimination of minority interest.
Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the balances for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of
December 31, 2006 and December 25, 2005 are as follows:
2006 2005
(In millions)
Deferred tax assets:
Net operating loss carryovers $ 217 $ 189
Deferred distributor income 88 73
Inventory valuation 21 5
Accrued expenses not currently deductible 135 142
In-process research and development 143 —
Acquired intangibles 9 —
U.S. federal and state tax credit carryovers 157 336
Foreign capitalized research and development costs 138 —
Foreign research and development ITC credits 140 —
Other 183 88
Total deferred tax assets 1,231 833
Less: valuation allowance (1,046) (741)
185 92
Deferred tax liabilities:
Property, plant and equipment (33) (1)
Capitalized interest (18) (21)
Acquired intangibles (71) —
Tax deductible goodwill (15) —
Other (51) (63)
Total deferred tax liabilities (188) (85)
Net deferred tax assets (liabilities) $ (3) $ 7
115
Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007