Avid 2015 Annual Report Download - page 54

48
2014 Compared to 2013
The increase in personnel-related expenses for 2014, compared to 2013, was primarily due to an increase in incentive-based
compensation accrual and stock based compensation expenses, partially offset by a decrease in salaries expenses and management
transition related costs. The increase in facilities and information technology infrastructure costs was primarily the result of
increased usage of facilities costs by the general and administrative function.
Amortization of Intangible Assets
Intangible assets result from acquisitions and include developed technology, customer-related intangibles, trade names and other
identifiable intangible assets with finite lives. These intangible assets are amortized using the straight-line method over the
estimated useful lives of such assets, which are generally two years to twelve years. Amortization of developed technology is
recorded within cost of revenues. Amortization of customer-related intangibles, trade names and other identifiable intangible
assets is recorded within operating expenses.
Year-Over-Year Change in Amortization of Intangible Assets for the Years Ended December 31, 2015 and 2014
(dollars in thousands)
2015 Increase
From 2014 2014 Decrease From 2013
$%$%
Amortization of intangible assets recorded in cost of revenues $ 4,013 8,026.0% $ (1,418) (96.6)%
Amortization of intangible assets recorded in operating expenses 728 44.8% (1,022) (38.6)%
Total amortization of intangible assets $ 4,741 282.9% $ (2,440) (59.3)%
2015 Compared to 2014
The increase in amortization of intangible assets for 2015, compared to 2014, was the result of the intangible assets that we
acquired through our acquisition of Orad in June 2015. We had $32.3 million of unamortized balance of our identifiable intangible
assets related to the Orad acquisition, and $0.9 million of unamortized balance related to all other acquisitions at December 31,
2015. We expect amortization of these intangible assets to be approximately $10.3 million in 2016 and $9.3 million in 2017. See
Note J, Intangible Assets, to our Consolidated Financial Statements in Item 8 for further information regarding our identifiable
intangible assets.
2014 Compared to 2013
The decrease in amortization of intangible assets recorded in cost of revenues and operating expenses during 2014, compared to
2013, was primarily the result of certain acquired intangible assets becoming fully amortized.
Restructuring Costs, Net
2016 Restructuring Plan
In the first quarter of 2016, we commenced restructuring actions that are part of a broad restructuring plan encompassing a series
of measures intended to allow us to more efficiently operate in a leaner, and more directed cost structure. These include reductions
in our workforce, facilities consolidation, transferring certain business processes to lower cost regions, and reducing other third-
party services costs. In connection with this restructuring plan, we expect to incur incremental cash expenditures of approximately
$25 million relating to termination benefits, facility costs, employee overlap expenses and related actions. We anticipate that the
restructuring plan will be substantially complete by the end of the second quarter of 2017 and will result in annualized costs
savings of approximately $68 million.
The restructuring charges of $5.8 million recorded during the quarter ended December 31, 2015, represented an initial elimination
of 111 positions worldwide during January and February of 2016.