AMD 2007 Annual Report Download - page 66

Table of Contents
Expenses
Research and Development Expenses
Research and development expenses increased $642 million, or 53 percent, from $1.2 billion in 2006 to $1.8 billion in 2007. The increase was primarily
attributable to: a $309 million increase in research and development expenses attributable to our Computing Solutions segment, a $186 million increase in
research and development expenses attributable to our Graphics segment and a $149 million increase in research and development expenses attributable to our
Consumer Electronics segment. Research and development expenses attributable to our Computing Solutions segment increased due primarily to higher product
design costs for our next generation microprocessor products. In addition, research and development expenses attributable to ATI’s chipset business were
included for the full year in 2007 compared to only nine weeks in 2006. Research and development expenses attributable to our Graphics and Consumer
Electronics segments increased primarily due to the inclusion of operations related to these segments for the full fiscal year in 2007 compared to nine weeks in
2006.
Research and development expenses increased $61 million, or 5 percent, from $1.1 billion in 2005 to $1.2 billion in 2006. This increase was primarily
attributable to: a $219 million increase in research and development expenses attributable to our Computing Solutions segment primarily due to an increase in
silicon design, platform and product development costs for our microprocessor products partially offset by a $10 million lower corporate bonus expense,
increases of $42 million and $31 million, respectively due to the consolidation of research and development expenses attributable to our Graphics and Consumer
Electronics segments from October 25, 2006 through December 31, 2006, and a $51 million increase in stock-based compensation and profit sharing expenses.
Fiscal 2006 research and development expenses were partially offset by the absence of research and development expenses related to Spansion’s operations
because we did not consolidate Spansion’s results of operations into ours in 2006. In 2005, research and development expenses attributable to our Memory
Products segment were $290 million.
From time to time, we also apply for and obtain subsidies from the State of Saxony, the Federal Republic of Germany and the European Union for certain
research and development projects. We record the amortization of the research and development related grants and allowances, as well as the research and
development subsidies, as a reduction of research and development expenses when all conditions and requirements set forth in the subsidy grant are met. The
credit to research and development expenses totaled $30 million in 2007, $27 million in 2006, and $44 million in 2005.
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses increased $233 million, or 20 percent, from $1.1 billion in 2006 to $1.4 billion in 2007. The increase was
primarily attributable to: a $69 million increase in marketing, general and administrative expenses attributable to our Computing Solutions segment, a $106
million increase in marketing, general and administrative expenses attributable to our Graphics segment, a $45 million increase in marketing, general and
administrative expenses attributable to our Consumer Electronics segment, and an $11 million increase in severance charges for workforce reductions.
Marketing, general and administrative expenses attributable to our Computing Solutions segment increased due to expansion of marketing programs for our
microprocessor products, increased legal expenses and additional investments in information technology, partially offset by a nine million reduction in corporate
bonus expense. Marketing, general and administrative expenses attributable to our Graphics and Consumer Electronics segments increased primarily due to the
inclusion of the operations related to these segments for the full fiscal year in 2007 compared to nine weeks in 2006.
Marketing, general and administrative expenses increased $124 million, or 12 percent, from one billion in 2005 to $1.1 billion in 2006. This increase was
primarily attributable to a $265 million increase in marketing, general and administrative expenses attributable to our Computing Solutions segment primarily
due to: a $215 million increase in marketing, branding and cooperative advertising costs for our microprocessor products,
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008