AMD 2001 Annual Report Download - page 205

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Other Items
International sales as a percent of net sales were 66 percent in 2001 and 60
percent in both 2000 and 1999. During 2001, approximately two percent of our net
sales were denominated in foreign currencies. We do not have sales denominated
in local currencies in countries that have highly inflationary economies (as
defined by accounting principles generally accepted in the United States). The
impact on our operating results from changes in foreign currency rates
individually and in the aggregate has not been material.
Comparison of Segment Income (Loss)
In 2001, we operated in two reportable segments: the Core Products segment,
which reflects the aggregation of the PC processors and memory products
operating segments, and the Foundry Services segment. The Core Products segment
includes PC processors, Flash memory devices, EPROMs, embedded processors,
platform products and networking products. The Foundry Services segment included
fees for services provided to Legerity and Vantis. Our previous Voice
Communications segment included the voice communications products of our former
subsidiary, Legerity, prior to its sale effective July 31, 2000. Our former
Vantis segment included the programmable logic devices (PLD) of our former
subsidiary, Vantis, prior to its sale in 1999. For a comparison of segment net
sales, refer to the previous discussions on net sales by product group.
The following is a summary of operating income (loss) by segment for 2001, 2000
and 1999:
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(Millions) 2001 2000 1999
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Core Products $ 72 $ 832 $ (342)
Foundry Services (34) 22 1
Voice Communications - 35 14
Vantis - - 6
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Total $ 38 $ 889 $ (321)
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Core Products segment operating income decreased by $760 million in 2001
compared to 2000 due to a decrease in net sales. The decrease was primarily due
to a decline in the average selling prices and unit sales of our core products
due to the sustained downturn in the microprocessor, communications, and
networking equipment industries and our restructuring plan previously discussed.
The Foundry Services segment operating income decreased by $56 million in 2001
compared to 2000 primarily due to the significant reduction in demand for wafer
fabrication services from Vantis and Legerity.
The Voice Communications segment operating income was zero in 2001 due to our
sale of Legerity, effective July 31, 2000.
The Vantis segment operating income was zero in 2001 due to our sale of Vantis,
effective June 15, 1999.
14
Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002