AMD 2012 Annual Report Download - page 63

Equity Income (Loss) and Dilution Gain in Investee, Net
From December 27, 2009 to December 25, 2010, the period during which we applied the equity method of
accounting for our ownership interest in GF, our equity in net loss of investee primarily consisted of our
proportionate share of GF’s losses for the period based on our ownership percentage of GF’s Class A Preferred
Shares, our portion of the non-cash accretion on GF’s Class B Preferred Shares, the elimination of intercompany
profit, reflecting the mark-up on inventory that remained on our consolidated balance sheet at the end of the
period, the amortization of basis differences identified from the purchase price allocation process, based on the
fair value of GF upon deconsolidation, and, to the extent applicable, the gain or loss on dilution of our ownership
interest as a result of the capital contributions into GF by ATIC.
Stock-Based Compensation Expense
Stock-based compensation expense related to employee stock options, restricted stock and restricted stock
units for the years ended December 29, 2012, December 31, 2011 and December 25, 2010 was allocated in our
consolidated statements of operations as follows:
2012 2011 2010
(In millions)
Cost of sales ................................................................. $ 8 $ 6 $ 4
Research and development ...................................................... 52 46 46
Marketing, general and administrative ............................................ 37 38 37
Total stock-based compensation expense, net of tax of $0 ............................. $97 $90 $87
During 2012, 2011 and 2010, we did not realize any excess tax benefits related to stock-based compensation
and therefore we did not record any related financing cash flows.
Stock-based compensation expense of $97 million in 2012 increased by $7 million as compared to $90
million in 2011. The increase was primarily due to the additional expense related to the equity grants made in
connection with our acquisition of SeaMicro and an increase in the number of employee stock options and
restricted stock units that we granted, partially offset by the absence of a charge related to the acceleration of
vesting of all unvested equity incentive awards held by our former Chief Executive Officer in the first quarter of
2011 as a result of his resignation from AMD, effective January 10, 2011 and a lower weighted-average
estimated grant date fair value in 2012 as compared to 2011.
Stock-based compensation expenses of $90 million in 2011 increased $3 million compared to $87 million in
2010. This increase was primarily due to the acceleration of vesting of all unvested equity awards held by our
former Chief Executive Officer in the first quarter of 2011 as a result of his resignation from AMD, effective
January 10, 2011, and an increase in the number of employee stock options and restricted stock units that we
granted in 2011 compared to 2010, partially offset by a lower weighted-average estimated grant date fair value in
2011 as compared to 2010.
As of December 29, 2012, we had $44 million of total unrecognized compensation expense, net of estimated
forfeitures, related to stock options that will be recognized over the weighted-average period of 2.20 years. Also,
as of December 29, 2012, we had $97 million of total unrecognized compensation expense, net of estimated
forfeitures, related to restricted stock and restricted stock units that will be recognized over the weighted-average
period of 1.97 years.
International Sales
International sales as a percentage of net revenue were 92% in 2012, 93% in 2011, and 88% in 2010. We
expect that international sales will continue to be a significant portion of total sales in the foreseeable future.
Substantially all of our sales transactions were denominated in U.S. dollars.
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