Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
 12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting

NOTE 13: Segment Reporting

Management, including the Chief Operating Decision Maker (CODM), who is the Company's chief executive officer, reviews and assesses operating performance using segment net revenues and operating income (loss) before interest, other income (expense), equity income (loss) and dilution gain in investee, net and income taxes. These performance measures include the allocation of expenses to the operating segments based on management's judgment.

In the first quarter of 2009, as a result of the formation of GF, the Company began reviewing and assessing operating performance using the following reportable segments:

 

  •  

the Computing Solutions segment, which included microprocessors, chipsets and embedded processors and related revenue;

 

  •  

the Graphics segment, which included graphics, video and multimedia products and related revenue as well as revenue received in connection with the development and sale of game console systems that incorporate its graphics technology; and

 

  •  

the Foundry segment, which included the operating results attributable to front end wafer manufacturing operations and related activities, including the operating results of GF from March 2, 2009 to December 26, 2009.

In addition to these reportable segments, the Company had an All Other category, which was not a reportable segment. This category included certain expenses and credits that were not allocated to any of the operating segments because management did not consider these expenses and credits in evaluating the performance of the operating segments. These expenses were non-Foundry segment related expenses and included amortization of acquired intangible assets, stock-based compensation expense and restructuring charges. The Company also had an Intersegment Eliminations category, which was also not a reportable segment. This category included intersegment eliminations for revenue, cost of sales and profits on inventory related to transactions between the Computing Solutions segment and the Foundry segment.

Beginning in the first quarter of 2010, as a result of the deconsolidation of GF, the Company no longer had a Foundry segment or an Intersegment Eliminations category. Therefore, the Company started using the following two reportable segments:

 

  •  

the Computing Solutions segment, which includes microprocessors, as standalone devices or as incorporated as an APU, chipsets and embedded microprocessors and embedded GPUs and related revenue; and

 

  •  

the Graphics segment, which includes graphics, video and multimedia products and related revenue as well as revenue received in connection with the development and sale of game console systems that incorporate the Company's graphics technology.

The Company continues to have an All Other category, as described above.

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 2011, 2010 and 2009.

 

      2011     2010     2009  
     (In millions)  

Net revenue:

       

Computing Solutions

    $ 5,002      $ 4,817      $ 4,170   

Graphics

      1,565        1,663        1,167   

Foundry

      —          —          1,101   

All Other

      1        14        66   

Intersegment eliminations

      —          —          (1,101 ) 

Total net revenue

    $ 6,568      $ 6,494      $ 5,403   

Operating income (loss):

       

Computing Solutions

    $ 556      $ 529      $ 142   

Graphics

      51        149        35   

Foundry

      —          —          (433 ) 

All Other

      (239 )      170        968   

Intersegment eliminations

      —          —          (48 ) 

Total operating income

    $ 368      $ 848      $ 664   

Interest income

      10        11        16   

Interest expense

      (180 )      (199 )      (438 ) 

Other income (expense), net

      (199 )      311        166   

Equity income (loss) and dilution gain in investee, net

      492        (462 )      —     

Income from continuing operations before income taxes

    $ 491      $ 509      $ 408   

The Company does not discretely allocate assets to its operating segments, nor does management evaluate operating segments using discrete asset information.

The Company's operations outside the United States include research and development activities, back end manufacturing and sales, marketing and administrative activities. The Company conducts product and system research and development activities for its products in Canada, India, Great China, Singapore, Taiwan, Germany, United Kingdom, Israel and Japan. The Company's back end manufacturing subsidiaries are located in Malaysia, Singapore and Great China. Its material sales and marketing entities are located in the United States, Europe, Greater China, Singapore and Japan. In 2009, GFs manufacturing facilities were located in Germany.

 

The following table summarizes sales to external customers by country:

 

      2011      2010      2009  
     (In millions)  

United States

    $ 456       $ 747       $ 704   

Europe

      779         985         934   

Greater China

      3,493         3,006         2,445   

Singapore

      1,056         875         692   

Japan

      445         561         306   

Other countries

      339         320         322   

Total sales to external customers

    $ 6,568       $ 6,494       $ 5,403   

The Company had one customer that accounted for more than 10% of the Company's consolidated revenue. Net sales to this customer were approximately 22%, 22% and 24% of consolidated net revenue in 2011, 2010 and 2009, respectively, and were primarily attributable to the Computing Solutions segment in each of these years.

The following table summarizes long-lived assets by geographic areas:

 

      December 31,
2011		      December 25,
2010		  
     (In millions)  

United States

    $ 455       $ 418   

Malaysia

      70         70   

Greater China

      60         51   

Singapore

      56         79   

Other countries

      85         82   

Total long-lived assets

    $ 726       $ 700