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

To: Dan3 who wrote (82658)	6/16/2002 8:36:40 PM
From: ptanner	Read Replies (3) \| Respond to of 275872

re: depreciation I did omit AMD's capital leases but don't see them as being very significant and may also partially be included in the general PPE & depreciation values. From AMD's 2001 annual report: The Company's leased assets totaled approximately $77 million and $54 million as of December 30, 2001 and December 3, 2000, respectively, and are included in the related property, plant and equipment category. Amortization of assets recorded under capital leases is included in depreciation expense. Accumulated amortization of these leased assets was approximately $45 million as of December 30, 2001 and $39 million as of December 31, 2000. Further down the same page is a table with the capital lease obligations and the costs are small ($14M for 2002) relative to PPE. Overall capital leases (with costs beyond depreciation) may explain part of the small difference in depreciation rates but the difference itself is not sufficient to be a concern to me. re: And an average from 1996 to 2002 is not meaningful in the context of this discussion. Intel was pretty good about this stuff in the past, what is scary is that outlays were approximately double recognized expenses for about 2 years - the two years of supposed Intel profits that are being questioned. The values from 1996 to 2001 were almost unchanged and not a simple average. I think they reflect reasonable useful life for the facilities in question. Whether the companies can realize the revenue and net income from these investments is a separate matter. I am only addressing how they are reflected in the financial statements. The implied useful life in years from 1996 to 2001 were as follows: AMD: 4.8, 4.5, 4.3, 4.4, 4.4, 4.4 Intel: 3.9, 3.9, 3.8, 3.6, 3.6, 3.6 Both companies had depreciation costs which increased each year and substantial growth in net PPE. AMD also had a year of capital investment double the depreciation (1998) while Intel had three (1997, 2000, 2001). Yes, Intel has made a massive investment in PPE and respect that it could have concerns. However, those concerns should not be on how Intel is accounting for the program as they are using the same method they have in the past and the same as AMD. Do analysts and investors pay more attention to the income statement than the balance sheet? Probably. But IMHO don't think this issue really merits the type or number of posts that it seems to inspire on this thread. -PT

To: Dan3 who wrote (82658)	6/16/2002 9:30:15 PM
From: niceguy767	Respond to of 275872

Dan3: "And an average from 1996 to 2002 is not meaningful in the context of this discussion. Intel was pretty good about this stuff in the past, what is scary is that outlays were approximately double recognized expenses for about 2 years - the two years of supposed Intel profits that are being questioned." Post Athy intro. has created a very, very different environment for INTC...Post Hammer is likely to pose even greater challenges for INTC's creative accountants...(The INTC accounting monster that has been created in the Athy years is likely to devour its creators in the post Hammer intro years)...