Avid 2011 Annual Report Download - page 38

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Operating Expenses and Operating Loss for the Years Ended December 31, 2010 and 2009
(dollars in thousands)
Research and development expenses
Marketing and selling expenses
General and administrative expenses
Amortization of intangible assets
Restructuring and other costs, net
Gain on sales of assets
Total operating expenses
Operating loss
2010
Expenses
$ 120,229
177,178
64,345
9,743
20,450
(5,029)
$ 386,916
$(36,168)
Change
$
$(760)
3,577
3,258
(768)
(6,423)
(4,874)
$(5,990)
$ 33,716
%
(0.6)%
2.1%
5.3%
(7.3)%
(23.9)%
n/m
(1.5)%
(48.2)%
2009
Expenses
$ 120,989
173,601
61,087
10,511
26,873
(155)
$ 392,906
$ (69,884)
Research and Development Expenses
Research and development, or R&D, expenses include costs associated with the development of new products and the
enhancement of existing products, and consist primarily of employee salaries and benefits; facilities costs; depreciation; costs for
consulting and temporary employees; and prototype and other development expenses. We expect our 2012 R&D expenses to be
slightly lower than those incurred in 2011.
Year-Over-Year Change in Research and Development Expenses for the Years Ended December 31, 2011 and 2010
(dollars in thousands)
Personnel-related expenses
Consulting and outside services expenses
Computer hardware and supplies expenses
Facilities and information technology expenses
Other expenses
Total research and development expenses decrease
2011 (Decrease)
Increase
From 2010
$
$(6,696)
2,109
1,382
1,121
(37)
$(2,121)
%
(8.6)%
13.9%
41.6%
6.1%
(0.7)%
(1.8)%
2010 (Decrease)
Increase
From 2009
$
$(3,599)
5,538
(314)
(1,751)
(634)
$(760)
%
(4.5)%
57.2%
(8.6)%
(8.7)%
(9.4)%
(0.6)%
The decrease in personnel-related expenses and the partially offsetting increase in consulting and outside services costs for 2011,
compared to 2010, primarily resulted from employee headcount reductions and the related increased use of offshore third-party
development resources. The increases in computer hardware and supplies expenses and facilities and information technology
infrastructure costs for 2011 were related to new product development initiatives started in 2010 and the first quarter of 2011.
R&D expenses as a percentage of revenues decreased to 17.4% in 2011, compared to 17.7% in 2010, as a result of the decreased
expenses for 2011.
For 2010, compared to 2009, the decreases in personnel-related expenses and facilities and information technology infrastructure
costs, and the partially offsetting increase in consulting and outside services costs, primarily resulted from our increased use of
offshore development resources. The overall decrease in R&D expenses was also offset by increased expenses resulting from our
2010 acquisitions of Blue Order and Euphonix. R&D expenses as a percentage of revenues decreased to 17.7% in 2010, from
19.2% in 2009, primarily as a result of the increase in revenues for 2010.
Marketing and Selling Expenses
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. We expect our 2012
marketing and selling expenses to be approximately the same as those incurred in 2011.