AMD 2009 Annual Report Download - page 60

Graphics operating income was $50 million in 2009 compared to operating income of $12 million 2008. The
increase in operating results was primarily due to a $41 million increase in net revenue described above and a
$29 million decrease in marketing, general and administrative expenses due to a reduction in discretionary
spending. These decreases were partially offset by a $29 million increase in cost of sales because of higher GPU
unit shipments.
Graphics operating income in 2008 was $12 million compared to an operating loss of $39 million in 2007.
The $51 million operating improvement was due to the increase in revenue referenced above. The increase in
revenue was partially offset by a $77 million increase in cost of sales because of higher GPU unit shipments and
increased research and development and marketing, general and administrative expenses, which increased for the
reasons set forth under “Expenses” below.
Foundry
Foundry net revenue was $1.1 billion in 2009. Foundry operating loss was $433 million in 2009. Prior to the
first quarter of 2009, we did not have a Foundry segment and, therefore, the results of operations in 2009 for the
Foundry segment are not comparable to 2008.
All Other
All Other net revenue of $66 million in 2009 decreased 21 percent compared to $84 million in 2008. All
Other net revenue decreased because we no longer develop new Handheld products, and we experienced reduced
customer orders in 2009.
All Other net revenue of $84 million in 2008 decreased by $80 million or 49 percent compared to net
revenue of $164 million in 2007 mainly due to decreased demand from one of the major customers of our
Handheld products.
All Other operating income of $968 million in 2009 increased by $2.5 billion compared to an operating loss
of $1.5 billion in 2008. The improvement in operating results was primarily attributable to $1,242 million of
income from the settlement of our litigation with Intel in the fourth quarter of 2009. Additionally, in 2008, we
had a $1.1 billion impairment charge, which included a goodwill write-down of $1.0 billion and a write-down of
specific intangible assets of $130 million. There were no corresponding charges in 2009. The improvement was
also impacted by a $67 million decrease in amortization of acquired intangible assets due to the write-down of
certain intangible assets in 2008 and a $25 million decrease in restructuring charges.
All Other operating loss of $1.5 billion in 2008 decreased by $53 million compared to an operating loss of
$1.6 billion in 2007. The decrease in the operating loss was primarily attributable to a $124 million decrease in
ATI acquisition-related charges and a $43 million decrease in impairment of goodwill and acquired intangible
assets, partially offset by $90 million in restructuring charges and $23 million of expenses in connection with the
formation of GF in 2008. ATI acquisition-related charges decreased in 2008 compared to 2007 due to a decrease
in amortization expense of acquired intangible assets of $72 million, an $89 million decrease in the write down
of acquisition-related intangible assets in 2008, a decrease of $27 million in integration charges, and the absence
of a $25 million charge related to the cost of fair value adjustment of acquired inventory.
Intersegment Eliminations
Intersegment eliminations represent eliminations during consolidation in revenue and in cost of sales and
profits on inventory between the Computing Solutions segment and the Foundry segment. For 2009,
intersegment eliminations of revenue were $1.1 billion and intersegment eliminations of cost of sales and profits
on inventory were $48 million. Beginning in the first quarter of 2010, we will no longer have intersegment
eliminations due to the deconsolidation of GF.
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