AMD 2007 Annual Report Download - page 104

Table of Contents
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).
The following are the components of accumulated other comprehensive income:
2007 2006
(In millions)
Net unrealized gains on available-for-sale securities, net of taxes of $1 in 2007 and $1 in 2006 $ 2 $ 2
Net unrealized gains (losses) on cash flow hedges, net of taxes of $0 in 2007 and $0 in 2006 21 5
Minimum pension liability (1) (1)
Cumulative translation adjustments 141 150
$ 163 $ 156
Stock-Based Compensation. On December 26, 2005, the Company adopted FASB Statement No. 123 (revised 2004), Share-Based Payment (SFAS
123R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors,
including employee stock options and employee stock purchases pursuant to the Company’s Employee Stock Purchase Plan, based on estimated fair values. The
Company adopted SFAS 123R using the modified prospective transition method. In accordance with the modified prospective transition method, the Company
has not restated its consolidated financial statements for prior periods. Under this transition method, stock-based compensation expense for 2006 includes
stock-based compensation expense for all of the Company’s stock-based compensation awards granted prior to, but not yet vested as of, December 26, 2005,
based on the grant-date fair value estimated in accordance with the provision of FASB Statement No. 123, Accounting for Stock-Based Compensation (SFAS
123), as well as stock-based compensation expense for all stock-based compensation awards granted on or after December 26, 2005 based on the grant-date fair
value estimated in accordance with the provisions of SFAS 123R. Prior to the adoption of SFAS 123R, the Company recognized stock-based compensation
expense in accordance with Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees (Opinion 25).
Upon adoption of SFAS 123R, the Company changed its method of attributing the value of stock-based compensation expense from the multiple-option
(i.e., accelerated) approach to the single option (i.e., straight-line) method. Compensation expense for share-based awards granted prior to December 26, 2005
will continue to be subject to the accelerated multiple option method specified in FASB Interpretation No. 28, Accounting for Stock Appreciation Rights and
Other Variable Stock Option or Award Plans (FIN 28), while compensation expense for stock-based awards granted on or after December 26, 2005 will be
recognized using a straight-line, single option method.
Also, upon adoption of SFAS 123R, the Company changed its method of valuation for stock option awards from the Black-Scholes-Merton
(“Black-Scholes”) option-pricing model, which was previously used for the Company’s pro forma information disclosures of stock-based compensation expense
as required under SFAS 123, to a lattice-binomial option-pricing model.
SFAS 123R requires that the cash flows resulting from excess tax benefits related to stock compensation be classified as cash flows from financing
activities.
In March 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 107 (SAB 107) regarding the SEC’s interpretation of
SFAS 123R and the valuation of share-based payments for
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008