AMD 2007 Annual Report Download - page 62

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because we do not consider these expenses and credits in evaluating the performance of the operating segments. Following the ATI acquisition, we began
including employee stock-based compensation expense, profit sharing expense, ATI acquisition-related and integration charges and charges for goodwill and
intangible asset impairment in the All Other category. Also, this category included the sale of Personal Internet Communicator (PIC) products from the third
quarter of 2005 to the third quarter of 2006, when the manufacturing of PIC products ceased.
We use a 52- to 53-week fiscal year. Prior to December 31, 2006, our fiscal year ended on the last Sunday in December. Commencing in 2007, our fiscal
year ends on the last Saturday in December. The years ended December 29, 2007 and December 25, 2005 each included 52 weeks, and the year ended
December 31, 2006 consisted of 53 weeks. References in this report to 2007, 2006 and 2005 shall refer to the fiscal year unless explicitly stated otherwise.
The following is a summary of our net revenue and operating income (loss) by segment for 2007, 2006 and 2005. Prior period segment information has
been reclassified to conform to the current period’s presentation.
2007 2006 2005
(In millions)
Computing Solutions
Net revenue $ 4,702 $ 5,367 $ 3,929
Operating income (loss) (670) 680 586
Graphics
Net revenue 903 166 —
Operating income (loss) (100) (27) —
Consumer Electronics
Net revenue 408 120 —
Operating income (loss) (17) 20 —
Memory Products
Net revenue — — 1,913
Operating income (loss) — — (311)
All Other
Net revenue — (4) 6
Operating income (loss) (2,078) (720) (43)
Total
Net revenue 6,013 5,649 5,848
Operating income (loss) $ (2,865) $ (47) $ 232
Computing Solutions
Computing Solutions net revenue of $4.7 billion in 2007 decreased by $665 million or 12 percent compared to net revenue of $5.4 billion in 2006 despite
the inclusion of revenue from the sale of ATI chipsets for the full fiscal year in 2007 as compared to only nine weeks in 2006. Net revenue decreased as a result
of a 32 percent decrease in average selling prices of products included in our Computing Solutions segment, partially offset by a 30 percent increase in unit
shipments. The decrease in average selling prices was primarily caused by a decrease in the average selling prices of our microprocessor products.
Microprocessor average selling prices decreased due to both competitive market conditions and a higher concentration of sales of processors for desktop and
notebook PCs in 2007, which generally carry lower average selling prices than our processors for servers. In particular, our competitor first offered quad-core
multi-chip module processors for servers and desktop PCs in November 2006, and these products were available throughout 2007. We first introduced our
quad-core products for servers in August 2007 and for desktop PCs in November 2007. However, we did not achieve significant volume shipments of these
products in 2007, and sales of these products did not significantly contribute to 2007
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008