AMD 2013 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2013 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

The following table provides a summary of net revenue and operating income (loss) by segment and income
(loss) from continuing operations before income taxes for 2013, 2012 and 2011.
2013 2012 2011
(In millions)
Net revenue:
Computing Solutions .............................................. $3,104 $ 4,005 $5,002
Graphics and Visual Solutions ....................................... 2,193 1,417 1,565
All Other ........................................................ 2 — 1
Total net revenue ...................................................... $5,299 $ 5,422 $6,568
Operating income (loss):
Computing Solutions .............................................. $ (22) $ (231) $ 556
Graphics and Visual Solutions ....................................... 216 105 51
All Other ........................................................ (91) (930) (239)
Total operating income (loss) ............................................ $ 103 $(1,056) $ 368
Interest income ....................................................... 5 8 10
Interest expense ....................................................... (177) (175) (180)
Other income (expense), net ............................................. (5) 6 (199)
Dilution gain in investee, net ............................................ — — 492
Income (loss) from continuing operations before income taxes .................. $ (74) $(1,217) $ 491
Computing Solutions
Computing Solutions net revenue of $3.1 billion in 2013 decreased by 22% compared to $4.0 billion in 2012
as a result of a 20% decrease in unit shipments and a 3% decrease in average selling price. The decrease in unit
shipments was primarily attributable to lower unit shipments of our microprocessors and chipset products.
Average selling price of all categories of products decreased in 2013 as compared to 2012. Unit shipments and
average selling price for microprocessor products other than microprocessors for servers and for chipsets
decreased primarily due to challenging market conditions and the increasing popularity of tablets as a consumer
device of choice, which resulted in decreased demand for our products. Unit shipments and average selling price
of our microprocessors for servers decreased primarily due to challenging market conditions.
Computing Solutions net revenue of $4.0 billion in 2012 decreased by 20% compared to $5.0 billion in 2011
as a result of a 14% decrease in unit shipments and a 7% decrease in average selling price. Unit shipments of all
categories of products decreased in 2012, as compared to 2011. The decrease in the average selling price was
primarily attributable to a decrease in average selling price of our microprocessors for desktop PCs and servers.
Unit shipments and average selling price of our microprocessors for desktop PCs decreased due to challenging
market conditions and the increasing popularity of tablets as a consumer device of choice, which resulted in
decreased demand for our products. Unit shipments and average selling price of our microprocessors for servers
decreased primarily due to challenging market conditions.
Computing Solutions operating loss was $22 million in 2013 compared to an operating loss of $231 million
in 2012. The improvement in operating results was primarily due to a $753 million decrease in cost of sales, a
$179 million decrease in marketing, general and administrative expenses and a $178 million decrease in research
and development expenses, partially offset by the decrease in net revenue referenced above. Cost of sales
decreased primarily due to lower unit shipments in 2013 compared to 2012 as well as the absence of the $273
million lower of cost or market charge related to the fee for GF’s waiver of a portion of our obligations and an
inventory write-down of approximately $100 million during the third quarter of 2012 as a result of lower than
anticipated future demand for certain products, mainly first generation A-Series APU products, codenamed
“Llano”. In addition, operating loss for 2013 included a $57 million benefit from sales of inventory that had been
previously reserved in the third quarter of 2012. Marketing, general and administrative expenses and research
and development expenses decreased for the reasons set forth under “Expenses,” below.
46