AMD 2013 Annual Report Download - page 55

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Computing Solutions operating loss was $231 million in 2012 compared to operating income of $556
million in 2011. The decline in operating results was primarily due to the decrease in net revenue referenced
above, partially offset by a $136 million decrease in marketing, general and administrative expenses, a $45
million decrease in research and development expenses and a $29 million decrease in cost of sales. Cost of sales
decreased primarily due to lower unit shipments, partially offset by the $273 million lower of cost or market
charge related to the fee for GF’s waiver of a portion of our obligations and an inventory write-down of $100
million during the third quarter of 2012 as a result of lower than anticipated future demand for certain products,
mainly first generation A-Series APU products. Marketing, general and administrative expenses and research and
development expenses decreased for the reasons set forth under “Expenses,” below.
Graphics and Visual Solutions
Graphics and Visual Solutions net revenue of $2.2 billion in 2013 increased by 55% compared to net
revenue of $1.4 billion in 2012. The increase was primarily due to net revenue received in connection with sales
of our semi-custom SOC products, which we began shipping in the second quarter of 2013, partially offset by a
16% decrease in net revenue from sales of our GPU products. Net revenue from sales of GPU products decreased
in 2013 compared to 2012 due to lower unit shipments, partially offset by higher average selling price. GPU unit
shipments decreased due to challenging consumer PC market conditions, which adversely impacted demand.
GPU average selling price increased primarily due to improved product mix.
Graphics and Visual Solutions net revenue of $1.4 billion in 2012 decreased by 9% compared to net revenue
of $1.6 billion in 2011. The decrease was primarily due to a decrease in net revenue from sales of GPU products,
partially offset by an increase in net revenue received in connection with the development and sale of game
console systems that incorporate our graphics technology. Net revenue from sales of GPU products decreased
due to lower unit shipments, partially offset by increased average selling price. GPU unit shipments decreased
due to challenging market conditions. GPU average selling price increased primarily due to improved product
mix.
Graphics and Visual Solutions operating income was $216 million in 2013 compared to $105 million in
2012. The improvement in operating results was primarily due to the increase in net revenue referenced above,
partially offset by a $600 million increase in cost of sales, a $36 million increase in marketing, general and
administrative expenses and a $29 million increase in research and development expenses. The increase in cost
of sales was primarily due to the commencement of unit shipments of our semi-custom SOC products in the
second quarter of 2013. Marketing, general and administrative expenses and research and development expenses
increased for the reasons set forth under “Expenses” below.
Graphics and Visual Solutions operating income was $105 million in 2012 compared to $51 million in 2011.
The improvement in operating results was primarily due to a $101 million decrease in cost of sales, a $60 million
decrease in research and development expenses and a $41 million decrease in marketing, general and
administrative expenses, partially offset by the decrease in net revenue referenced above. Cost of sales decreased
primarily due to lower GPU shipments and correspondingly lower manufacturing costs. Marketing, general and
administrative expenses and research and development expenses decreased for the reasons set forth under
“Expenses” below.
All Other
All Other revenue pertains to results from former businesses, which were immaterial in 2013, 2012 and
2011.
All Other operating loss of $91 million in 2013 included stock-based compensation expense of $91 million,
net restructuring and other special charges of $30 million and $18 million related to amortization of acquired
intangible assets. During the fourth quarter of 2013, we entered into licenses and settlements regarding patent-
related matters, for which we received in aggregate $48 million in net cash, which we recorded as a gain in
operating expense.
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