Blackberry 2013 Annual Report Download - page 195

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Research and Development Expenses
Research and development expenses consist primarily of salaries and benefits for technical personnel, new product development
costs, travel, office and building infrastructure costs and other employee costs.
Research and development expenses decreased by $47 million, or 3.0%, to $1.5 billion in fiscal 2013, compared to $1.6 billion in
fiscal 2012. Excluding the impact of charges incurred as part of the CORE program during fiscal 2013, of which $27 million were
attributable to research and development expenditures, and the charges incurred as part of the Company’s previous cost optimization
program during fiscal 2012, of which $23 million were attributed to research and development expenditures, research and
development expenses decreased by $51 million. This decrease was primarily attributable to a reduction in materials costs due to
fewer new product introductions as well as a net reduction in headcount related costs driven by the CORE program compared to fiscal
2012. Research and development related headcount decreased by approximately 9%, compared to fiscal 2012.
Selling, Marketing and Administration Expenses
Selling, marketing and administration expenses consist primarily of marketing, advertising and promotion, salaries and benefits,
external advisory fees, information technology costs, office and related staffing infrastructure costs and travel expenses.
Selling, marketing and administration expenses decreased by $489 million, or 18.8%, to $2.1 billion in fiscal 2013 compared to $2.6
billion in fiscal 2012. Excluding the impact of charges incurred as part of the CORE program during fiscal 2013, of which $97 million
was attributable to selling, marketing and administration expenditures, and the charges incurred as part of the Company’s previous
cost optimization program during fiscal 2012, of which $88 million was attributable to selling marketing and administration
expenditures, selling, marketing and administration expenses decreased by $498 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. Headcount related to selling, marketing and
administration functions decreased by approximately 33%, as compared to fiscal 2012.
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