Avid 2015 Annual Report Download - page 53

47
2015 Compared to 2014
The decrease in facilities and information technology infrastructure expenses for 2015, compared to 2014, was primarily the result
of less usage of facilities and information technology in 2015. The decrease in personnel-related expenses for 2015, compared to
2014, was primarily due to decreased incentive-based compensation accrual, commission expenses and stock-based compensation
costs. The decrease in consulting and outside services expenses was primarily due to our cost reduction initiatives. The web
advertising expenses were related to our large advertising campaigns in 2015, which was not present at the same level during
2014. The net foreign exchange gains (specifically, resulting from foreign currency forward contracts, foreign currency
denominated transactions, and the revaluation of foreign currency denominated assets and liabilities), which are included in
marketing and selling expenses, were $1.3 million for 2015, compared to losses of $(0.9) million in 2014. We classify these gains
and losses within marketing and selling expenses because the gains and losses generally arise from revenue arrangements that are
denominated in foreign currencies to facilitate sales in certain foreign jurisdictions.
2014 Compared to 2013
The decrease in product introduction expenses in 2014 was the result of significant new product introductions during 2013, which
was not present at the same level in 2014. The increase in consulting and outside services expenses for 2014, compared to 2013,
was primarily the result of costs related to our Avid Customer Association, or ACA, which was launched in September 2013, and
the inaugural ACA events, Avid Connect and Avid Connect Europe, which took place in April 2014 and September 2014,
respectively. The increase in personnel-related expenses for 2014, compared to 2013, was primarily due to increased incentive-
based compensation accrual, commission expenses and stock-based compensation costs. The net foreign exchange losses were
$0.9 million for 2014, compared to losses of $0.2 million in the 2013 period.
General and Administrative Expenses
General and administrative expenses consist primarily of employee salaries and benefits for administrative, executive, finance and
legal personnel; audit, legal and strategic consulting fees; and insurance, information systems and facilities costs. Information
systems and facilities costs reported within general and administrative expenses are net of allocations to other expenses
categories. General and administrative expenses decreased $7.1 million, or 8.7%, during the year ended December 31, 2015,
compared to 2014. The table below provides further details regarding the changes in components of general and administrative
expense.
Year-Over-Year Change in General and Administrative Expenses for the Years Ended December 31, 2015 and 2014
(dollars in thousands)
2015 (Decrease)/Increase
From 2014 2014 Increase From 2013
$%$%
Consulting and outside services $ (17,426) (47.4)% $ 256 0.7%
Merger and acquisition 11,162 100.0% — —%
Personnel-related (1,733) (5.5)% 2,325 8.0%
Facilities and information technology 480 4.9% 848 9.4%
Other expenses 445 12.5% 174 5.2%
Total general and administrative expenses (decrease)/increase $ (7,072) (8.7)% $ 3,603 4.6%
2015 Compared to 2014
The decrease in consulting and outside services expenses for 2015, compared to 2014, was primarily the result of a decrease in
restatement-related costs and litigation expenses. The merger and acquisition expenses in 2015 were primarily the professional
and consulting services expenses related to the acquisition and integration of Orad. The decrease in personnel-related expenses for
2015, compared to 2014, was primarily the result of decreased incentive-based compensation accrual.