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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (82640)	6/16/2002 4:50:08 PM
From: ptanner	Read Replies (1) \| Respond to of 275872

Dan, re: " AMD finds ways to expense capex about as fast as it occurs, while Intel blithely accepts that its capex costs are often significantly under-expensed in GAAP, assuming a "not my problem - let the investors try to figure it out" stance." I think that AMD and Intel both take a very similar approach to depreciating their capital investments. AMD's capital investments have just been more evenly scheduled than Intel's. I reviewed the annual reports since 1996 to determine the effective depreciation rate (prior year net PPE / depreciation). For AMD the average term is 4.4 years compared to 3.6 years for Intel. These values declined slightly over the period for both firms probably as PPE became more heavily short-term assets as equipment got more expensive. Intel's slightly faster depreciation could reflect a more conservative (shorter term) basis but is more likely just a result of different asset balance -- more land and buildings as after all AMD did sell its headquarters. <g> I agree that Intel has greatly expanded its capital investments relative to its revenues. But I do not think the reported depreciation reflects any enlightenment on the part of AMD or "blithe acceptance" on the part of Intel. -PT