AMD 2003 Annual Report Download - page 28

Table of Contents
We review and assess operating performance using segment revenues and operating income before interest, taxes and minority interest. These performance
measures include the allocation of expenses to the operating segments based on management judgment. Prior to the third quarter of 2003, we had two reportable
segments: the Core Products and Foundry Services segments. Primarily as a result of the formation of FASL LLC, we re-evaluated our reportable segments.
Beginning in the third quarter of 2003, we changed our reportable segments to: the Computation Products segment, which includes microprocessor
products for desktop and mobile PCs, servers and workstations and chipset products, and the Memory Products segment, which includes Flash memory products.
We believe that separate reporting of these operating segments, given our new focus on FASL LLC as a separate operating company and its separate market
brand—Spansion, provides more useful information to our stockholders.
In addition to our reportable segments, we also have the All Other category that is not a reportable segment, but rather it includes other small operating
segments that are neither individually nor in the aggregate greater than ten percent of our consolidated revenues or assets. This category also includes certain
operating expenses and credits that are not allocated to the operating segments. Prior period segment information has been reclassified to conform to the current
period presentation. However, as FASL LLC did not exist prior to June 30, 2003, the results of operations for prior periods did not include the consolidation of
FASL LLC’s operations. Accordingly, the segment operating information for the Memory Products segment for the year ended December 28, 2003, is not fully
comparable to the reclassified segment information for all prior periods presented.
We use a 52- to 53-week fiscal year ending on the last Sunday in December. The years ended December 28, 2003, December 29, 2002, and December 30,
2001, each included 52 weeks.
The following is a summary of our net sales for 2003, 2002 and 2001.
2003 2002 2001
(Millions)
Computation Products $ 1,960 $ 1,756 $ 2,466
Memory Products 1,419 741 1,133
All Other 140 200 293
Total $ 3,519 $ 2,697 $ 3,892
Net Sales Comparison for Years Ended December 28, 2003 and December 29, 2002
Total net sales of $3,519 million in 2003 increased 30 percent compared to net sales of $2,697 million in 2002.
Computation Products net sales of $1,960 million in 2003 increased 12 percent compared to net sales of $1,756 million in 2002. The increase in net sales
was primarily due to a 15 percent increase in microprocessor unit shipments due primarily to increased demand from our OEM customers, partially offset by a
decline of four percent in the average selling prices of our microprocessor products. Unit shipment growth was particularly strong in Latin America and China,
which accounted for 77 percent of overall unit growth.
Memory Products net sales of $1,419 million in 2003 increased 92 percent compared to net sales of $741 million in 2002. The increase in net sales was
primarily attributable to the effect of consolidating FASL LLC’s results of operations, which include FASL LLC’s sales to Fujitsu, and increased demand for
Flash memory products. Further quantification of the breakdown in the increase in net sales is not practical due to the reorganization of geographical sales
territories between AMD and Fujitsu.
All Other net sales of $140 million in 2003 decreased 30 percent compared to net sales of $200 million in 2002 and consisted primarily of net sales of our
Personal Connectivity Solutions products. The decrease was due
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004