Segment Reporting
Management, including the Chief Operating Decision Maker, who is the Company’s Chief Executive Officer, reviews and assesses operating performance using segment net revenue and operating income (loss) before interest, other income (expense), net and income taxes. These performance measures include the allocation of expenses to the operating segments based on management’s judgment. The Company has the following two reportable segments:
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the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete graphics processing units (GPUs), professional graphics processors and licensing portions of its intellectual property (IP) portfolio; and |
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the Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services, technology for game consoles and licensing portions of its IP portfolio. |
In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the reportable segments because management does not consider these expenses and credits in evaluating the performance of the reportable segments. This category also includes employee stock-based compensation expense and restructuring and other special charges, net.
The following table provides a summary of net revenue and operating income (loss) by segment:
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Three Months Ended |
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Nine Months Ended |
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September 30,
2017 |
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September 24,
2016 |
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September 30,
2017 |
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September 24,
2016 |
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(In millions) |
Net revenue: |
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Computing and Graphics |
$ |
819 |
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$ |
472 |
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$ |
2,071 |
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$ |
1,367 |
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Enterprise, Embedded and Semi-Custom |
824 |
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|
835 |
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|
1,778 |
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|
1,799 |
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Total net revenue |
$ |
1,643 |
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$ |
1,307 |
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$ |
3,849 |
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$ |
3,166 |
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Operating income (loss): |
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Computing and Graphics |
$ |
70 |
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$ |
(66 |
) |
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$ |
62 |
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$ |
(217 |
) |
Enterprise, Embedded and Semi-Custom |
84 |
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|
136 |
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|
135 |
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|
236 |
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All Other |
(28 |
) |
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(363 |
) |
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(75 |
) |
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(388 |
) |
Total operating income (loss) |
$ |
126 |
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|
$ |
(293 |
) |
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$ |
122 |
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$ |
(369 |
) |
The following table provides major items included in All Other category:
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Three Months Ended |
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Nine Months Ended |
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September 30,
2017 |
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September 24,
2016 |
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September 30,
2017 |
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September 24,
2016 |
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(In millions) |
Operating loss: |
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Stock-based compensation expense |
$ |
(29 |
) |
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$ |
(23 |
) |
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$ |
(76 |
) |
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$ |
(57 |
) |
Restructuring and other special charges, net |
— |
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— |
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— |
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|
10 |
|
Charge related to the sixth amendment to the WSA with GF |
— |
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(340 |
) |
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— |
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(340 |
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Other |
1 |
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— |
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1 |
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(1 |
) |
Total operating loss |
$ |
(28 |
) |
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$ |
(363 |
) |
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$ |
(75 |
) |
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$ |
(388 |
) |
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