• R&D expenses increased to $46.3 million in 4Q13, compared to $37.6 million in 3Q13. The increase was primarily due to an increase in R&D expenses associated with higher R&D activities from quarter to quarter and a decrease in funding of R&D contracts from the government in 4Q13 of $4.3 million compared to 3Q13.
• General and administrative expenses increased to $36.6 million in 4Q13, up 48.1 % QoQ from $24.7 million in 3Q13, mainly due to 1) increased bad debt expense recognized in 4Q13 and 2) a bonus accrual relating to an increase in employee productivity in 4Q13.
• Other operating income was $6.4 million in 4Q13, compared to $8.2 million in 3Q13. The change was mainly due to 1) a decrease of gain arising from the disposal of part of the Company-owned living quarters in Shanghai, and 2) gain arising from the deconsolidation of Brite Semiconductor Corporation and its subsidiaries due to loss of control.

Other Income (expense), Net

• The change of other gains or losses was mainly due to 1) lower revenue from our schools as a result of summer vacation in 3Q13 and 2) a reversal of impairment loss from an available-for-sale investment which was recognized in 3Q13 due to subsequent recovery of the cost.

Depreciation and Amortization