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All Other operating loss of $930 million in 2012 included a $703 million charge related to the limited
waiver of exclusivity from GF, $100 million of net restructuring charges, stock-based compensation expense of
$97 million, $14 million related to amortization of acquired intangible assets and $6 million related to our
acquisition of SeaMicro, Inc. (SeaMicro) in 2012.
All Other operating loss of $239 million in 2011 included $98 million of net restructuring charges, $90
million of stock-based compensation expense, $29 million related to amortization of acquired intangible assets
and a $24 million charge recorded in connection with a payment to GF primarily related to certain GF
manufacturing assets that did not benefit us.
Comparison of Gross Margin, Expenses, Interest Income, Interest Expense, Other Income (Expense), Net,
Income Taxes and Dilution Gain in Investee, Net
The following is a summary of certain consolidated statement of operations data for 2013, 2012 and 2011.
2013 2012 2011
(In millions, except for percentages)
Cost of sales .................................................... $3,321 $4,187 $3,628
Gross margin ................................................... 1,978 1,235 2,940
Gross margin percentage .......................................... 37% 23% 45%
Research and development ......................................... 1,201 1,354 1,453
Marketing, general and administrative ................................ 674 823 992
Legal settlements, net ............................................. (48) — —
Amortization of acquired intangible assets ............................ 18 14 29
Restructuring and other special charges, net ........................... 30 100 98
Interest income .................................................. 5 8 10
Interest expense ................................................. (177) (175) (180)
Other income (expense), net ........................................ (5) 6 (199)
Provision (benefit) for income taxes ................................. 9 (34) (4)
Dilution gain in investee, net ....................................... $ — $ — $ 492
Gross Margin
Gross margin as a percentage of net revenue was 37% in 2013 compared to 23% in 2012. Gross margin in
2012 included a $703 million charge related to the limited waiver of exclusivity from GF, a lower of cost or
market charge of $273 million and a $5 million charge recorded to cost of sales related to a legal settlement.
Absent the effect of these charges, which we believe are not indicative of our ongoing operating performance,
our gross margin would have been 41% in 2012 compared to 37% in 2013. Gross margin in 2013 was adversely
impacted by the lower average gross margins in our Graphics and Visual Solutions segment primarily driven by
lower margin semi-custom SOC products, which we began shipping in the second quarter of 2013. Gross margin
in 2012 was adversely impacted by 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, codenamed “Llano,” which accounted for two gross margin percentage points. Gross margin in 2013
included a $57 million benefit from sales of this previously reserved inventory, which accounted for one gross
margin percentage point.
Gross margin as a percentage of net revenue was 23% in 2012 compared to 45% in 2011. Gross margin in
2012 included a $703 million charge related to the limited waiver of exclusivity from GF, a lower of cost or
market charge of $273 million and a $5 million charge recorded to cost of sales related to a legal settlement.
Gross margin in 2011 included a $24 million charge recorded in connection with a payment to GF primarily
related to certain GF manufacturing assets and a charge of approximately $5 million recorded to cost of sales
related to a legal settlement. Absent the effects of the charges as described above, which we believe are not
indicative of our ongoing operating performance, our gross margin would have been 41% in 2012 compared to
48