AMD 2011 Annual Report Download - page 45

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated financial statements as of
December 31, 2011 and December 25, 2010 and for each of the three years in the period ended December 31,
2011 and related notes, which are included in this Form 10-K as well as with the other sections of this
Form 10-K, including “Part I, Item 1: Business,” “Part II, Item 6: Selected Financial Data,” and “Part II, Item 8:
Financial Statements and Supplementary Data.”
Introduction
We are a global semiconductor company with facilities around the world. Within the global semiconductor
industry, we offer primarily:
(i) x86 microprocessors, as standalone devices or as incorporated as an APU, for the commercial and
consumer markets, embedded microprocessors for commercial, commercial client and consumer
markets and chipsets for desktop and mobile devices, including mobile PCs and tablets, professional
workstations and servers; and
(ii) graphics, video and multimedia products for desktop and mobile devices, including mobile PCs and
tablets, home media PCs and professional workstations, servers and technology for game consoles.
In MD&A, we will describe the general financial condition and the results of operations for Advanced
Micro Devices, Inc. and its consolidated subsidiaries, including a discussion of our results of operations for 2011
compared to 2010 and 2010 compared to 2009, an analysis of changes in our financial condition and a discussion
of our contractual obligations and off balance sheet arrangements. For accounting purposes, we consolidated the
accounts of GLOBALFOUNDRIES, Inc. (GF) and its consolidated subsidiaries from March 2, 2009 through
December 26, 2009. Accordingly, for this period, references in this Item 7 and in Item 8 “Financial Statements
and Supplementary Data” to “us,” “our,” or “AMD” include the consolidated operating results of AMD and its
consolidated subsidiaries, including GF and its consolidated subsidiaries.
Overview
In 2011, we experienced important changes in our business. First, we continued to develop and deliver
differentiated products. We launched our AMD family of APU products and experienced strong customer
demand, especially for our AMD E-Series and C-Series APUs designed for low-power desktop and mobile
platforms, codenamed “Brazos,” and our AMD A-Series APUs, codenamed “Llano,” for mainstream desktop and
mobile platforms. We introduced a number of competitive graphics products in 2011. In July 2011, we launched
the AMD Radeon™ HD 6990M graphics processor designed for enthusiast mobile gamers. We also launched the
AMD Radeon HD 7970 graphics processor in December 2011, our first graphics processor based on 28nm
process technology and AMD’s Graphic Core Next Technology. We also continued to focus on improving our
competitive position in the server market and believe we regained momentum in the second half of 2011 with the
introduction of our new multi-core AMD Opteron™ 6200 and 4200 series processors, which are based on our
“Bulldozer” x86 architecture.
During 2011, we continued to focus on optimizing our financial model. In November 2011, we implemented
a restructuring plan designed to strengthen our competitive positioning, implement a more competitive cost
structure and conduct a workforce rebalancing to better address faster growing market segments. We expect that
the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $118
million in 2012. We also implemented additional efficiencies across our operations, which we expect will save
approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in
more than $200 million of expected combined operational savings in 2012. We intend to use a significant portion
of the anticipated savings to fund initiatives designed to accelerate our strategies for low power, emerging
markets and the cloud. We also focused on improving our balance sheet. We reduced our outstanding debt by
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