Avid 2011 Annual Report Download - page 34

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29
Severance-related charges are accrued when it is determined that a liability has been incurred, which is when the expected
severance payments are probable and can be reasonably estimated.
Restructuring charges and accruals require significant estimates and assumptions, including sub-lease income and severance
period assumptions. Our estimates involve a number of risks and uncertainties, some of which are beyond our control, including
future real estate market conditions and our ability to successfully enter into subleases or termination agreements with terms as
favorable as those assumed when arriving at our estimates. The estimates and assumptions are monitored on at least a quarterly
basis for changes in circumstances and any corresponding adjustments to the accrual are recorded in our statement of operations
in the period when such changes are known. If actual results differ significantly from our current estimates, we may be required
to adjust our restructuring accruals in the future.
RESULTS OF OPERATIONS
NET REVENUES
Our net revenues are derived mainly from sales of computer-based digital, nonlinear media-editing and finishing systems and
related peripherals, including shared-storage systems, software licenses, and related professional services and maintenance
contracts. We expect to have low single-digit percentage revenue growth in 2012, compared to 2011.
Net Revenues for the Years Ended December 31, 2011 and 2010
(dollars in thousands)
Video products revenues
Audio products revenues
Products revenues
Services revenues
Total net revenues
2011
Net Revenues
$ 278,979
267,392
546,371
131,565
$ 677,936
Change
$
$(3,284)
(10,252)
(13,536)
12,950
$(586)
%
(1.2)%
(3.7)%
(2.4)%
10.9%
(0.1)%
2010
Net Revenues
$ 282,263
277,644
559,907
118,615
$ 678,522
Net Revenues for the Year Ended December 31, 2010 and 2009
(dollars in thousands)
Video products revenues
Audio products revenues
Products revenues
Services revenues
Total net revenues
2010
Net Revenues
$ 282,263
277,644
559,907
118,615
$ 678,522
Change
$
$ 23,112
27,580
50,692
(1,140)
$ 49,552
%
8.9%
11.0%
10.0%
(1.0)%
7.9%
2009
Net Revenues
$ 259,151
250,064
509,215
119,755
$ 628,970
The $0.6 million decrease in our total revenues for 2011, compared to 2010, consisted of a $3.3 million decrease in our video
products revenues and a $10.3 million decrease in our audio products revenues, partially offset by a $13.0 million increase in our
services revenues. The decrease in total net revenues included approximately $10.9 million for the favorable impact of currency
exchange rates. During 2011, we recognized $6.8 million in products revenues as a result of our January 1, 2011 adoption of new
revenue recognition guidance. See our critical accounting policy disclosure and updated policy for “Revenue Recognition and
Allowances for Product Returns and Exchanges” found previously in this Item 7 under the heading “Critical Accounting Policies
and Estimates” for a further discussion of the impact of adoption of this guidance.
The $49.6 million increase in our total revenues for 2010, compared to 2009, consisted of a $27.6 million increase in our audio
products revenues and a $23.1 million increase in our video products revenues, partially offset by a $1.1 million decrease in our
services revenues. The increase in total net revenues, which was primarily the result of higher sales volumes for many of our
product lines, included a $16.8 million increase resulting from our 2010 acquisitions and a $6.1 million decrease for the