AMD 2015 Annual Report Download - page 57

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primarily due to a $116 million decrease in product engineering and design costs and a $4 million decrease in
other employee compensation and benefit expenses. Research and development expenses attributable to our
Enterprise, Embedded and Semi-Custom segment increased primarily due to a $17 million increase in product
engineering and design costs.
Research and development expenses of $1.1 billion in 2014 decreased by $129 million, or 11%, compared
to $1.2 billion in 2013. The decrease was primarily due to a $201 million decrease in research and development
expenses attributable to our Computing and Graphics segment, partially offset by a $64 million increase in
research and development expenses attributable to our Enterprise, Embedded and Semi-Custom segment and a $9
million increase in the All Other category related to a workforce rebalancing severance charge recorded in the
first quarter of 2014. Research and development expenses attributable to our Computing and Graphics segment
decreased primarily due to a $171 million decrease in product engineering and design costs, a $22 million
decrease in other employee compensation and benefit expenses and a $10 million decrease in manufacturing
process technology expenses. Research and development expenses attributable to our Enterprise, Embedded and
Semi-Custom segment, where we expect to continue to increase our investment, increased primarily due to a $59
million increase in product engineering and design costs and a $3 million increase in other employee
compensation and benefit expenses.
Marketing, General and Administrative Expenses
Marketing, general and administrative expenses of $482 million in 2015 decreased by $122 million, or 20%,
compared to $604 million in 2014. The decrease was primarily due to an $84 million decrease in marketing,
general and administrative expenses attributable to our Computing and Graphics segment, a $19 million decrease
in marketing, general and administrative expenses attributable to our Enterprise, Embedded and Semi-Custom
segment and a $19 million decrease in the All Other category primarily related to a $5 million workforce
rebalancing severance charge recorded in 2014 and a $10 million decrease in stock-based compensation
expenses. Marketing, general and administrative expenses attributable to our Computing and Graphics segment
decreased primarily due to a $62 million decrease in sales and marketing expenses and a $22 million decrease in
other general and administrative expenses. Marketing, general and administrative expenses attributable to our
Enterprise, Embedded and Semi-Custom segment decreased primarily due to a $5 million decrease in sales and
marketing expenses and a $14 million decrease in other general and administrative expenses.
Marketing, general and administrative expenses of $604 million in 2014 decreased by $70 million, or 10%,
compared to $674 million in 2013. The decrease was primarily due to an $89 million decrease in marketing,
general and administrative expenses attributable to our Computing and Graphics segment, partially offset by a
$15 million increase in marketing, general and administrative expenses attributable to our Enterprise, Embedded
and Semi-Custom segment and a $5 million increase in the All Other category related to a workforce rebalancing
severance charge recorded in the first quarter of 2014. Marketing, general and administrative expenses
attributable to our Computing and Graphics segment decreased primarily due to a $61 million decrease in sales
and marketing expenses and a $25 million decrease in other general and administrative expenses. Marketing,
general and administrative expenses attributable to our Enterprise, Embedded and Semi-Custom segment
increased primarily due to an $8 million increase in sales and marketing expenses and a $5 million increase in
other general and administrative expenses.
Legal Settlements
As of December 26, 2015, the Italian tax authorities had concluded their audit of our subsidiaries’ activities
in Italy for the years 2003 through 2013. We have agreed to a settlement of $11 million in taxes and penalties,
which was reflected in full in the 2015 tax provision and $2 million in interest.
During the fourth quarter of 2013, we entered into licenses and settlement agreements regarding patent-
related matters for which we received in aggregate $48 million in net cash, which we recorded as an offset to
operating expenses. At the time we entered into the agreements, we did not have any future obligations that we
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