Avid 2009 Annual Report Download - page 36

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The decrease in research and development expenses during 2008 was primarily due to lower hardware development and
computer equipment costs, partially offset by higher facility and information technology infrastructure costs. Hardware
development and computer equipment costs decreased $3.4 million, due to our increased focus on the development of
high-end video-editing products during 2007, and the facility and information technology infrastructure costs increased
by $1.4 million. The increase in research and development expenses as a percentage of revenues in 2008 was the result
of lower 2008 revenues.
Marketing and Selling
Marketing and selling expenses consist primarily of employee salaries and benefits for selling, marketing and pre-sales
customer support personnel; commissions; travel expenses; advertising and promotional expenses; and facilities costs.
Comparison of 2009 to 2008
Years Ended December 31, 2009 and 2008
(dollars in thousands)
2009 Expenses
2008 Expenses
Change
% Change
Marketing and selling
$173,601
$208,735
($35,134)
(16.8%)
As a percentage of net revenues
27.6%
24.7%
2.9%
The decrease in marketing and selling expenses during 2009 was largely due to lower personnel-related costs; decreased
advertising, tradeshow and other promotional expenses; lower facility and information technology infrastructure costs;
decreased travel and entertainment expenses; and favorable foreign exchange translations in 2009. Personnel-related
costs decreased $16.3 million, primarily due to decreased headcount; advertising, tradeshow and other promotional
expenses decreased $7.7 million; facility and information technology infrastructure costs decreased $3.8 million,
primarily resulting from the closure of certain facilities and improved operating efficiencies related to our corporate
transformation initiated in 2008; and travel and entertainment expenses decreased $2.9 million. Also during 2009, net
foreign exchange gains (specifically, remeasurement gains and losses on net monetary assets denominated in foreign
currencies, offset by non-designated foreign currency hedging gains and losses), which are included in marketing and
selling expenses, were $1.4 million, compared to net foreign exchange losses of ($1.0) million in 2008. The increase in
marketing and selling expense as a percentage of revenues for 2009 was the result of lower 2009 revenues.
Comparison of 2008 to 2007
Years Ended December 31, 2008 and 2007
(dollars in thousands)
2008 Expenses
2007 Expenses
Change
% Change
Marketing and selling
$208,735
$210,456
($1,721)
(0.8%)
As a percentage of net revenues
24.7%
22.7%
2.0%
The decrease in marketing and selling expenses during 2008 was largely due to lower advertising, tradeshow and other
promotional expenses and lower facility and information technology infrastructure costs, partially offset by increased
bad debt expenses and unfavorable foreign exchange translations in 2008. The decrease in advertising, tradeshow and
other promotional expenses was $3.7 million, largely attributable to decreased spending on trade shows, while the
decrease in facility and information technology infrastructure costs was $2.0 million. The increase in bad debt expense
was $2.6 million, primarily due to increased payment defaults. Also during 2008, net foreign exchange losses
(specifically, remeasurement gains and losses on net monetary assets denominated in foreign currencies, offset by non-
designated foreign currency hedging gains and losses), which are included in marketing and selling expenses, were
($1.0) million, compared to net foreign exchange gains of $1.3 million in 2007. The increase in marketing and selling
expense as a percentage of revenues for 2008 was the result of lower 2008 revenues.