Tucows 2013 Annual Report Download - page 45

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Excluding movements in exchange rates, we expect sales and marketing expenses for the fiscal year ending
December 31, 2014 (“Fiscal 2014”) to increase slightly, in absolute dollars, as we adjust our marketing programs and sales
and customer support personnel costs to meet future opportunities in the marketplace.
TECHNICAL OPERATIONS AND DEVELOPMENT
Technical operations and development expenses consist primarily of personnel costs and related expenses required
to support the development of new or enhanced service offerings and the maintenance and upgrading of existing
infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register
domain names, email, retail, domain portfolio and other Internet services, as well as to distribute our digital content services.
Editorial costs relating to the rating and review of the software content libraries are included in the costs of product
development. All technical operations and development costs are expensed as incurred.
Year ended December 31,
2013
2012
Technical operations and development
$
4,158,603
$
4,302,820
Decrease over prior period
$
(144,217
)
Decrease - percentage
(3
)%
Percentage of net revenues
3
%
4
%
Technical operations and development expenses for Fiscal 2013 decreased by $0.1 million, or 3%, to $4.2 million
when compared to Fiscal 2012. These decreases primarily resulted from a decrease in workforce costs. This decrease resulted
from payment received for a 2010 Ontario Interactive Digital Media Tax Credit (“OIDMTC”) of $0.4 million, primarily
related to eligible personnel costs, during Fiscal 2013. This was partially offset by an increase in workforce related costs in
the amount of $0.3 million.
We expect technical operations and development expenses for Fiscal 2014, in absolute dollars, to increase slightly
when compared to Fiscal 2013.
46
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for managerial and
administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general
corporate expenses.
Year ended December 31,
2013
2012
General and administrative
$
7,204,895
$
6,610,819
Increase over prior period
$
594,076
Increase - percentage
9
%
Percentage of net revenues
6
%
6
%
General and administrative expenses for Fiscal 2013 increased by $0.6 million, or 9%, to $7.2 million as compared
to Fiscal 2012. This increase was primarily the result of incremental workforce related costs as well as additional costs
incurred in processing a higher volume of credit cards.
We expect general and administrative expenses for Fiscal 2014, in absolute dollars, to increase slightly when
compared to Fiscal 2013.
DEPRECIATION OF PROPERTY AND EQUIPMENT
Property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets.
Year ended December 31,
2013
2012
Depreciation of property and equipment
$
215,447
$
190,420
Increase over prior period
$
25,027
Increase - percentage
13
%
Percentage of net revenues
0
%
0
%