AMD 2007 Annual Report Download - page 120

Table of Contents
The table below displays reconciliation between statutory federal income taxes and the total provision (benefit) for income taxes
Tax Rate
(In millions except
for percentages)
2007
Statutory federal income tax expense $ (1,174) 35%
State taxes, net of federal benefit — %
Foreign income at other than U.S. rates (65) 1.9%
Foreign operating losses and deductions utilized (74) 2.2%
Foreign operating losses not benefited 752 (22.4)%
US net operating losses not benefited 584 (17.4)%
Other — %
$ 23 (.7)%
2006
Statutory federal income tax expense $ (50) 35.0%
State taxes, net of federal benefit 1 (0.9)%
Foreign income at other than U.S. rates (4) 2.9%
Benefit for foreign operating losses and deductions utilized (58) 40.5%
US net operating losses not benefited 134 (93.5)%
Other — %
$ 23 (16.0)%
2005
Statutory federal income tax expense $ 55 35.0%
State taxes, net of federal benefit 1 0.5%
Foreign income at other than U.S. rates (15) (9.4)%
Foreign losses not benefited 84 53.0%
Benefit for net operating losses utilized (132) (83.3)%
Other — — %
$ (7) (4.2)%
The Company has made no provision for U.S. income taxes on approximately $437 million of cumulative undistributed earnings of certain foreign
subsidiaries through December 29, 2007 because it is the Company’s intention to permanently reinvest such earnings. If such earnings were distributed, the
Company would incur additional income taxes of approximately $141 million (after an adjustment for foreign tax credits). These additional income taxes may
not result in income tax expense or a cash payment to the Internal Revenue Service, but may result in the utilization of deferred tax assets that are currently
subject to a valuation allowance.
The Company’s operations in Singapore, China and Malaysia currently operate under tax holidays, which will expire in whole or in part at various dates
through 2014. Certain of the tax holidays may be extended if specific conditions are met. The net impact of these tax holidays was to decrease the Company’s net
loss by approximately $16 million in fiscal year 2007 (less than $0.03 per share, diluted) decrease the Company’s net loss by approximately $5 million in fiscal
year 2006, (less than $0.01 per share, diluted), and to increase net income by approximately $1 million in fiscal year 2005 (less than $0.01 per share, diluted).
On January 1, 2007, upon adoption of FIN 48, the cumulative effect of applying FIN 48 was reported as a reduction of the beginning balance of retained
earnings of $6 million and a decrease to goodwill of $3 million.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008