Symantec 2006 Annual Report Download - page 50

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Operating Expenses
Sales and marketing expenses
Year Ended March 31,
2006 2005 2004
($ in thousands)
Sales and marketing ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,486,590 $843,724 $660,573
Percentage of total net revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 36% 33% 35%
Period over period increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 642,866 $183,151
76% 28%
The increase in sales and marketing expenses in fiscal 2006 as compared to fiscal 2005 was due primarily
to the Veritas acquisition, which contributed $579 million in additional sales and marketing expenses. The
remaining increase in sales and marketing expenses was due primarily to an increase in employee headcount,
resulting in additional employee compensation cost.
The increase in sales and marketing expenses in fiscal 2005 as compared to fiscal 2004 was due primarily
to an increase in employee headcount resulting in an additional $118 million of employee compensation cost.
In addition, we spent $44 million more on advertising and promotion activities in fiscal 2005 as compared to
the prior fiscal year.
Research and development expenses
Year Ended March 31,
2006 2005 2004
($ in thousands)
Research and development ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $664,628 $332,266 $252,284
Percentage of total net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16% 13% 13%
Period over period increase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $332,362 $ 79,982
* 32%
* Percentage not meaningful
The increase in research and development expenses in fiscal 2006 as compared to fiscal 2005 was due
primarily to the Veritas acquisition, which contributed $320 million in additional research and development
expenses.
The increase in research and development expenses in fiscal 2005 as compared to fiscal 2004 resulted
primarily from a $34 million increase in employee compensation due to increased headcount. In addition,
research and development expenses increased by $26 million due to additional overhead costs related to
computer labs and IT infrastructure needed to support overall company growth. The remaining increase was
primarily related to increased variable research and development costs due to growth of the company,
including new product offerings from business acquisitions.
General and administrative expenses
Year Ended March 31,
2006 2005 2004
($ in thousands)
General and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $221,412 $115,419 $94,645
Percentage of total net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5% 4% 5%
Period over period increase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $105,993 $ 20,774
92% 22%
The increase in general and administrative expenses in fiscal 2006 as compared to fiscal 2005 was due
primarily to the Veritas acquisition, which contributed $81 million in additional general and administrative
44