AMD 2015 Annual Report Download - page 55

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Enterprise, Embedded and Semi-Custom operating income was $215 million in 2015 compared to $399
million in 2014. The decline in operating results was primarily due to the decrease in net revenue referenced
above and a $16 million increase in research and development expenses, partially offset by a $19 million
decrease in marketing, general and administrative expenses and a $2 million decrease in cost of sales. The
decrease in cost of sales was primarily due to a decrease in unit shipments of our server and embedded products
in 2015 compared to 2014, largely offset by a technology node transition charge of $33 million and an inventory
write-down of $13 million. Marketing, general and administrative expenses decreased and research and
development expenses increased for the reasons set forth under “Expenses” below.
Enterprise, Embedded and Semi-Custom operating income was $399 million in 2014 compared to $295
million in 2013. The improvement in operating results was primarily due to the increase in net revenue
referenced above, partially offset by a $614 million increase in cost of sales, a $64 million increase in research
and development expenses and a $15 million increase in marketing, general and administrative expenses. The
increase in cost of sales was primarily due to an increase in unit shipments of our semi-custom SoC products in
2014 compared to 2013. In addition, operating income in 2014 included an $8 million benefit from technology
license revenue. Research and development expenses and marketing, general and administrative expenses
increased for the reasons set forth under “Expenses” below.
All Other
All Other revenue pertains to results from former businesses, which were immaterial in 2015, 2014 and
2013.
All Other operating loss of $194 million in 2015 primarily included restructuring and other special charges,
net of $129 million and stock-based compensation expense of $63 million. Restructuring and other special
charges, net of $129 million included $76 million related to our decision to exit from the dense server systems
business, $37 million related to our 2015 Restructuring Plan and $16 million related to our 2014 Restructuring
Plan.
All Other operating loss of $478 million in 2014 included a goodwill impairment charge of $233 million,
stock-based compensation expense of $81 million, net restructuring and other special charges of $71 million,
lower of cost or market inventory adjustment of $58 million, $14 million related to workforce rebalancing
severance charges, $14 million related to amortization of acquired intangible assets and $7 million related to
other expenses.
All Other operating loss of $91 million in 2013 included stock-based compensation expense of $91 million,
net restructuring and other special charges of $30 million and $18 million related to amortization of acquired
intangible assets. During the fourth quarter of 2013, we entered into licenses and settlements regarding patent-
related matters, for which we received in aggregate $48 million in net cash, which we recorded as an offset to
operating expenses.
49