Adobe 2012 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 2012 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 136

  • 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
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136

66
Services and Support
Cost of services and support revenue is primarily comprised of employee-related costs and associated costs incurred to
provide consulting services, training and product support.
Cost of services and support revenue increased during fiscal 2012 as compared to fiscal 2011 and fiscal 2011 as compared
to fiscal 2010, primarily due to increases in costs associated with compensation and related benefits driven by additional headcount,
including headcount from our acquisition of Efficient Frontier.
Operating Expenses (dollars in millions)
Fiscal
2012 Fiscal
2011 Fiscal
2010 % Change
2012-2011 % Change
2011-2010
Research and development.......................................... $ 742.8 $ 738.1 $ 680.3 1% 8 %
Percentage of total revenue....................................... 17% 18% 18%
Sales and marketing .................................................... 1,516.1 1,385.8 1,244.2 9% 11 %
Percentage of total revenue....................................... 34% 33% 33%
General and administrative ......................................... 435.0 414.6 383.5 5% 8 %
Percentage of total revenue....................................... 10% 10% 10%
Restructuring and other related charges (credits)........ (2.9) 97.8 23.3 * *
Percentage of total revenue....................................... —% 2% 1%
Amortization of purchased intangibles ....................... 48.7 42.8 72.1 14% (41)%
Percentage of total revenue....................................... 1% 1% 2%
Total operating expenses............................................. $ 2,739.7 $ 2,679.1 $ 2,403.4 2% 11 %
_________________________________________
(*) Percentage is greater than 100%.
Research and Development
Research and development expenses consist primarily of salary and benefit expenses for software developers, contracted
development efforts, related facilities costs and expenses associated with computer equipment used in software development.
Research and development expenses remained relatively stable during fiscal 2012 as compared to fiscal 2011. The increase in
research and development expenses during fiscal 2011 as compared to fiscal 2010 was primarily driven by higher employee
compensation associated with headcount growth.
We believe that investments in research and development, including the recruiting and hiring of software developers, are
critical to remain competitive in the marketplace and are directly related to continued timely development of new and enhanced
products. We will continue to focus on long-term opportunities available in our end markets and make significant investments in
the development of our application, tool and service offerings.
Sales and Marketing
Sales and marketing expenses consist primarily of salary and benefit expenses, sales commissions, travel expenses and
related facilities costs for our sales, marketing, order management and global supply chain management 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 due to the following:
% Change
2012-2011 % Change
2011-2010
Compensation and related benefits associated with headcount.............................................. 2% 5%
Marketing spending related to product launches and overall marketing efforts to further
increase revenue................................................................................................................... 2 3
Compensation associated with incentive compensation and stock-based compensation....... 3 1
Various individually insignificant items................................................................................. 2 2
Total change......................................................................................................................... 9% 11%
Table of Contents