Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.8.0.1
Segment Reporting
 12 Months Ended
Dec. 30, 2017
Segment Reporting [Abstract]  
Segment Reporting
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, income taxes and equity loss of investee. 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:
•
the Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), professional GPUs and licensing portions of its IP portfolio; and
•
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. Also included in this category are employee stock-based compensation expense, the charge related to the Sixth Amendment, restructuring and other special charges, net and amortization of acquired intangible assets. The Company also reported the results of former businesses in the All Other category because the operating results were not material.
The following table provides a summary of net revenue and operating income (loss) by segment for 2017, 2016 and 2015.
 
2017
 
2016
 
2015
 
(In millions)
Net revenue:
 
 
 
 
 
Computing and Graphics
$
3,029

 
$
1,967

 
$
1,805

Enterprise, Embedded and Semi-Custom
2,300

 
2,305

 
2,186

Total net revenue
$
5,329

 
$
4,272

 
$
3,991

Operating income (loss):
 
 
 
 
 
Computing and Graphics
$
147

 
$
(238
)
 
$
(502
)
Enterprise, Embedded and Semi-Custom
154

 
283

 
215

All Other
(97
)
 
(417
)
 
(194
)
Total operating income (loss)
$
204

 
$
(372
)
 
$
(481
)

The following table provides major items included in All Other category:
 
2017
 
2016
 
2015
 
(In millions)
Operating loss:
 
 
 
 
 
Stock-based compensation expense
$
(97
)
 
$
(86
)
 
$
(63
)
Restructuring and other special charges, net
—

 
10

 
(129
)
Amortization of acquired intangible assets
—

 
—

 
(3
)
Charge related to the Sixth Amendment to the WSA with GF
—

 
(340
)
 
—

Other
—

 
(1
)
 
1

Total operating loss
$
(97
)
 
$
(417
)
 
$
(194
)

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 and sales, marketing and administrative activities. The Company conducts product and system research and development activities for its products in the United States with additional design and development engineering teams located in China, Canada, India, Singapore, Australia and Taiwan. The Company’s ATMP facilities located in Malaysia and China were sold in the second quarter of 2016 (see Note 4: Equity Interest Agreement - ATMP Joint Venture). The Company’s material sales and marketing offices are located in the United States, Latin America, Europe and Asia.
The following table summarizes sales to external customers by geographic regions based on billing location of the customer:
 
2017
 
2016
 
2015
 
(In millions)
United States
$
1,364

 
$
923

 
$
984

Europe
263

 
155

 
168

China (including Taiwan)
1,747

 
1,108

 
1,145

Singapore
551

 
571

 
356

Japan
1,242

 
1,443

 
1,254

Other countries
162

 
72

 
84

Total sales to external customers
$
5,329

 
$
4,272

 
$
3,991


The following table summarizes long-lived assets by geographic areas:
 
2017
 
2016
 
(In millions)
United States
$
200

 
$
104

Malaysia
5

 
9

China
7

 
7

Singapore
22

 
24

Other countries
27

 
20

Total long-lived assets
$
261

 
$
164


The following table summarizes sales to major customers that accounted for at least 10% of the Company’s consolidated net revenue for the respective years:
 
2017
 
2016
 
2015
Customer A
23
%
 
33
%
 
31
%
Customer B
15
%
 
16
%
 
18
%
Customer C
6
%
 
10
%
 
8
%

Sales to customers A and B consisted of products from the Company's Enterprise, Embedded and Semi-Custom segment and sales to customer C consisted primarily of products from the Company's Computing and Graphics segment.