Blackberry 2013 Annual Report Download - page 194

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
and lower average selling prices of BlackBerry 7 devices due to the continuation of pricing initiatives to drive sell-through. The
decrease in gross margin was partially offset by the higher average selling prices of BlackBerry 10 devices shipped, favorable
renegotiations of key contracts associated with elements of the Company’s hardware business and benefits from a leaner and re-
architected supply chain.
Operating Expenses
The table below presents a comparison of research and development, selling, marketing and administration, and amortization expense
from continuing operations for fiscal 2013 compared to fiscal 2012.
Operating expenses decreased by $409 million, or 8.1%, to $4.7 billion or 42.1% of consolidated revenue in fiscal 2013, compared to
$5.1 billion or 27.5% of consolidated revenue in fiscal 2012, reflecting the lower consolidated revenue in fiscal 2013. Excluding the
impact of the Q1 Goodwill Impairment Charge and charges incurred as part of the CORE program during fiscal 2013, of which $124
million were attributable to operating expenditures, and the Q1 Goodwill Impairment Charge and charges incurred as part of the
Company’s previous cost optimization program during fiscal 2012, of which $111 million were attributed to operating expenditures,
operating expenses decreased by $402 million. This decrease was primarily attributable to decreased marketing costs, an increase in
foreign exchange gains and cost savings related to vendor contracts and a net reduction in headcount related costs driven by the
CORE program compared to fiscal 2012.
29
For the Fiscal Year Ende
d
(in millions)
March 2, 2013 March 3, 2012 Change Fiscal 2013/2012
% of
Revenue
% of
Revenue
% of
Change
Revenue
$11,073 $18,423 $(7,35
0
) (39.9%)
Operating expenses
Research and develo
p
ment
$1,509 13.6% $1,556 8.4% $(47) (3.
0
%)
Sellin
g
, marketin
g
and administration 2,111 19.1% 2,600 14.1% (489)
(18.8%)
Amortization
714 6.4% 567 3.1% 147 25.9%
Im
p
airment of Goodwill
335 3.0% 355 1.9% (2
0
) (5.6%)
Total
$4,669 42.1% $5,078 27.5% $(409) (8.1%)
Research and development and selling, marketing and administration expenses for fiscal 2013 included charges of
a
pp
roximatel
y
$27 million and $97 million, res
p
ectivel
y
, related to the Cost O
p
timization Pro
g
ram.
(1)
(1)
(1)