AMD 2006 Annual Report Download - page 67

Table of Contents
in net revenue partially offset by an increase in marketing, general and administrative expenses of $258 million and an increase in research and development
expenses of $222 million.
Computation Products operating income of $641 million in 2005 increased by $361 million, or 129 percent, compared to operating income of $280 million
in 2004. This increase was primarily due to a 50 percent increase in net revenue whereas cost of sales increased by only 45 percent. Partially offsetting this
increase was an increase in marketing, general and administrative expense of $199 million and an increase in research and development expenses of $203
million.
Embedded Products
Embedded Products net revenue of $149 million in 2006 increased by $13 million, or 10 percent, compared to net revenue of $136 million in 2005. The
increase was primarily due to a $16 million increase in sales of AMD Geode products, offset by $4 million decrease in legacy networking products.
Embedded Products net revenue of $136 million in 2005 increased by $6 million, or four percent, compared to net revenue of $130 million in 2004. The
increase was primarily due to a $13 million increase in sales of AMD Geode products and an $8 million increase in sales of other embedded processors, partially
offset by a $15 million decrease in sales of legacy networking products and MIPS-architecture based products.
Embedded Products operating loss of $18 million in 2006 decreased $37 million as compared to an operating loss of $55 million in 2005. The decrease in
operating loss was primarily due to a $20 million decrease in research and development expenses and $12 million in sales of products that we had previously
written off.
Embedded Products operating loss of $55 million in 2005 was flat compared to an operating loss of $54 million in 2004. The increase in net revenue of $6
million from 2004 to 2005 was offset by an increase in operating expenses of $6 million.
Graphics and Chipsets
Net revenue and operating loss represents the operating results of this segment for the period of October 25, 2006 through December 31, 2006. We are not
able to provide any comparative information for this segment because prior to the ATI acquisition we did not sell comparable products. Sales of AMD chipsets
are included in the Computation Products segment.
Consumer Electronics
The revenue and operating income represents the operating results of this segment for the period of October 25, 2006 through December 31, 2006. We are
not able to provide any comparative information for this segment because prior to the ATI acquisition we did not sell comparable products.
Memory Products
As a result of Spansion’s IPO in December 2005, we stopped manufacturing and selling memory products. Therefore, we did not have a Memory Products
segment in 2006.
Memory Products net revenue of $1.9 billion in 2005 decreased 18 percent compared to net revenue of $2.3 billion in 2004. In 2005, we consolidated
Spansion’s net revenue into our Memory Product segment only through December 20, 2005. Therefore, approximately $104 million of Spansion’s net revenue
from December 21, 2005 through December 25, 2005 was excluded from Memory Products net revenue in 2005. In addition, Memory Products net revenue was
adversely impacted due to a decrease of 28 percent in average selling prices in 2005 compared to 2004, partially offset by an increase of 14 percent in unit
shipments in 2005 compared to 2004. Net
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2007