AMD 2012 Annual Report Download - page 59

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not indicative of our ongoing operating performance, our gross margin would have been 45% in each of 2011 and
2010. Gross margin, as adjusted for the factors described above, remained flat in 2011 compared to 2010. During
2011, unit shipments of our low-cost, margin accretive Brazos APU platforms increased compared to 2010.
However, this improvement in gross margin was offset by an unfavorable mix in supply of microprocessor
products manufactured using the 32nm technology node and a decline in average selling price of our
microprocessor products for servers.
Expenses
Research and Development Expenses
Research and development expenses of $1.4 billion in 2012, decreased by $99 million, or 7%, compared to
$1.5 billion in 2011. The decrease was due to a $60 million decrease in research and development expenses
attributable to our Graphics segment and a $45 million decrease in research and development expenses
attributable to our Computing Solutions segment, partially offset by a $6 million increase in stock-based
compensation expense recorded in the All Other category. Research and development expenses attributable to
our Graphics segment decreased as a result of a $36 million decrease in product engineering and design costs, a
$16 million decrease in other employee compensation and benefit expense and a $9 million decrease in
manufacturing process technology expenses. The decrease in research and development expenses attributable to
our Computing Solutions segment was primarily due to a $26 million decrease in other employee compensation
and benefit expense, an $11 million decrease in manufacturing process technology expenses related to GF for our
future products and a $9 million decrease in product engineering and design costs.
Research and development expenses of $1.5 billion in 2011, increased by $48 million, or 3%, compared to
$1.4 billion in 2010. The increase was primarily due to a $45 million increase in research and development
expenses attributable to our Computing Solutions segment as a result of a $79 million increase in product
engineering and design costs for our future products, partially offset by a $27 million decrease in other employee
compensation and benefit expense and a $7 million decrease in manufacturing process technology expenses
related to GF for our future products.
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses of $823 million in 2012 decreased by $169 million, or 17%,
compared to $992 million in 2011, reflecting the effect of the 2011 restructuring plan and our efforts to reduce
operating expenses. The decrease was primarily due to a $136 million decrease in marketing, general and
administrative expenses attributable to our Computing Solutions segment and a $41 million decrease in
marketing, general and administrative expenses attributable to our Graphics segment, partially offset by a $6
million increase in corporate general and administrative expenses attributable to our acquisition of SeaMicro,
which we recorded in the All Other category. Marketing, general and administrative expenses attributable to our
Computing Solutions segment decreased primarily due to an $111 million decrease in sales and marketing
activities and a $22 million decrease in other general and administrative expenses. The decrease in marketing,
general and administrative expenses attributable to our Graphics segment was a result of a $24 million decrease
in other general and administrative expenses and a $16 million decrease in sales and marketing activities.
Marketing, general and administrative expenses of $992 million in 2011, increased by $58 million, or 6%,
compared to $934 million in 2010. The increase was primarily due to a $42 million increase in marketing,
general and administrative expenses attributable to our Computing Solutions segment and a $20 million increase
in marketing, general and administrative expenses attributable to our Graphics segment. The increase in
marketing, general and administrative expenses attributable to our Computing Solutions segment was primarily
due to a $41 million increase in sales and marketing activities resulting from an increase in regional marketing
programs and labor expenses and a $14 million increase in general and administrative expenses, partially offset
by a $12 million decrease in other employee compensation and benefit expense. The increase in marketing,
general and administrative expenses in our Graphics segment was primarily due to a $22 million increase in sales
and marketing activities resulting from an increase in regional marketing programs and labor expenses.
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