Adobe 2001 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2001 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

Sales and Marketing
2001 Change 2000 Change 1999
Sales and marketing ............... $403.7 0.6% $401.2 22% $328.5
Percentage of total revenue .......... 32.8% 31.7% 32.3%
Sales and marketing expenses include salary and benefit expenses, bonuses, sales commissions, travel
expenses, and related facilities costs for our sales, marketing, customer support, and distribution personnel.
Sales and marketing expenses also include the costs of programs aimed at increasing revenue, such as
advertising, trade shows, public relations, and other market development programs.
Sales and marketing expenses increased $2.5 million, or 0.6%, in fiscal 2001 compared to fiscal 2000,
as a result of higher salary and benefit expenses related to headcount growth and increased investments in
product-specific marketing activities. These increases were offset by a decrease in incentive compensation
expenses and company bonuses.
Sales and marketing expenses increased $72.7 million, or 22%, in fiscal 2000 compared to fiscal 1999
as a result of higher incentive compensation expenses and higher outsourced technical support and order
management fees. In addition, sales and marketing expenses increased in fiscal 2000 compared to fiscal
1999 due to our focus on general corporate brand advertising, as well as higher marketing, public relations,
and trade show activities associated with new product releases.
We expect sales and marketing expenses to increase in absolute dollars in fiscal 2002 to support
investments in certain areas including digital imaging, digital video, and ePaper-based businesses. As
communicated on December 13, 2001, for the first quarter of fiscal 2002, our sales and marketing expense
target is approximately 34-35% of revenue. For fiscal year 2002, we are targeting such expenditures also to
be approximately 34-35% of revenue.
General and Administrative
2001 Change 2000 Change 1999
General and administrative .......... $115.6 (0.8)% $116.5 12% $103.6
Percentage of total revenue .......... 9.4% 9.2% 10.2%
General and administrative expenses consist principally of salary and benefit expenses, travel
expenses, and related facilities costs for the finance, human resources, legal, information services, and
executive personnel of Adobe. General and administrative expenses also include outside legal and
accounting fees, provision for bad debts, and expenses associated with computer equipment and software
used in the administration of the business.
General and administrative expenses decreased $0.9 million, or 0.8%, in fiscal 2001 compared to fiscal
2000, due to decreased incentive compensation expenses and lower bad debt expense. The decrease was
partially offset by an increase in salary and benefit expenses as a result of increased headcount.
General and administrative expenses increased $13.0 million, or 12%, in fiscal 2000 compared to fiscal
1999, primarily due to higher salary and benefit expenses as a result of increased headcount, and higher
bad debt expense and legal fees. The increase was partially offset by decreases in professional fees and
depreciation expense.
We expect that general and administrative spending will increase in absolute dollars in fiscal 2002. As
communicated on December 13, 2001, for the first quarter of fiscal 2002, our general and administrative
expense target is approximately 10-11% of revenue. For fiscal year 2002, we are targeting such
expenditures to be approximately 9-10% of revenue.
27