AMD 2014 Annual Report Download - page 59

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In 2013, we recognized $5 million of other expense, net, primarily due to a $2 million loss from foreign
currency exchange rate fluctuations and a $2 million realized loss on sale of our auction rate securities (ARS)
investments.
In 2012, we recognized $6 million of other income, net, primarily due to other income recorded in the third
quarter of 2012, partially offset by a $5 million loss from foreign currency exchange rate fluctuations and a $4
million other-than-temporary impairment charge related to one of our ARS investments.
Income Taxes
We recorded an income tax provision of $5 million and $9 million in 2014 and 2013, respectively, and an
income tax benefit of $34 million in 2012.
The income tax provision in 2014 was primarily due to $7 million of foreign taxes in profitable locations,
offset by $2 million of tax benefits for Canadian tax credits and the monetization of certain US tax credits.
The income tax provision in 2013 was primarily due to $9 million of foreign taxes in profitable locations
and $3 million related to the reversal of previously recognized tax benefits associated with other comprehensive
income, offset by $3 million of tax benefits for Canadian tax credits and the monetization of certain U.S. tax
credits.
The income tax benefit in 2012 was primarily due to a tax benefit of $36 million relating to our SeaMicro
acquisition, a $1 million tax benefit for the tax effects of items credited directly to other comprehensive income,
a $2 million tax benefit for Canadian tax credits and a $9 million tax benefit associated with the successful
negotiation of a tax holiday in a foreign jurisdiction net of $14 million of foreign taxes in profitable locations.
As of December 27, 2014, substantially all of our U.S. and foreign deferred tax assets, net of deferred tax
liabilities, continued to be subject to a valuation allowance. The realization of these assets is dependent on
substantial future taxable income which, at December 27, 2014, in management’s estimate, is not more likely
than not to be achieved.
Stock-Based Compensation Expense
Stock-based compensation expense related to employee stock options, restricted stock and restricted stock
units for the years ended December 27, 2014, December 28, 2013 and December 29, 2012 was allocated in our
consolidated statements of operations as follows:
2014 2013 2012
(In millions)
Cost of sales ................................................................. $ 3 $ 5 $ 8
Research and development ...................................................... 44 48 52
Marketing, general and administrative ............................................ 34 38 37
Total stock-based compensation expense, net of tax of $0 ............................. $81 $91 $97
During 2014, 2013 and 2012, we did not realize any excess tax benefits related to stock-based compensation
and therefore we did not record any effects relating to financing cash flows.
Stock-based compensation expense of $81 million in 2014 decreased by $10 million as compared to $91
million in 2013. The decrease was primarily due to lower expense related to stock options and restricted stock
granted in connection with our SeaMicro acquisition as most were becoming fully vested during 2014 and lower
stock compensation expense as a result of our 2014 restructuring plan.
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