Advanced Micro Devices Inc (AMD)

[wbmw]

Re: There was an article a few years back which showed that AMD was in the red for their corporate lifetime. That probably isn't true anymore but give them a few more quarters and it will be again...

How is it mathematically possible for AMD to have a net zero profit since the beginning of their business, and still be able to increase their shareholder equity to $5.8 billion?

I looked back to their old 10K documents (starting from the oldest available that was online).

'93
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=891987&Type=HTML
'96
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=192377&Type=HTML
'98
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=453511&Type=HTML
'01
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=1786454&Type=HTML
'03
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=2819973&Type=HTML
'06
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5002366&Type=HTML

It turns out they were making good money between 1991 and 1995 ($10.05 EPS over these years!!!), and shareholder equity was at $2.1 billion in 1995. Things were looking great until 1996, when they had their first loss. From 1996 to 1999, they lost $1.68 EPS, but now their shareholder equity goes up to $3.2 billion. That's a neat trick, losing $1.68 in EPS but increasing shareholder equity by over $2 billion.

In 2000, they earned $3.18 in EPS, and after that it was downhill again. Shareholder equity in 2000 was $3.6 billion. Then from 2001 to 2003, AMD lost another $4.78 EPS, but ended up returning to $2.4B in shareholder equity.

But here's the kicker. From 2004 to 2006, they earned a net $0.32 EPS. But somehow, their shareholder equity managed to balloon to $5.8 billion. WTF. How does this happen...? How does a company like AMD manage to earn $0.32 in EPS, but increase shareholder equity by $3.4 billion?!

I'd love to see the mathematical answer to this. It has been bugging me for a long time now....