Adobe 2002 Annual Report Download - page 62

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31
Services and Support
Cost of services and support is composed primarily of employee-related costs and the related infrastructure
costs incurred to provide consulting services, training, and product support for our Accelio business.
Cost of services and support increased in absolute dollars and as a percentage of revenue in fiscal 2002
compared to fiscal 2001 due to the acquisition of the Accelio business in April 2002.
Operating Expenses
Research and Development
2002 Change 2001 Change 2000
Research and development ............................ $ 246.1 10% $ 224.1 (7)% $ 240.2
Percentage of total revenue............................ 21.1% 18.2% 19.0%
Research and development expenses consist principally of salary and benefit expenses for software developers,
contracted development efforts, related facilities costs, and expenses associated with computer equipment used in
software development.
Research and development expenses increased $22.0 million, or 10%, in fiscal 2002 compared to fiscal 2001,
primarily due to higher compensation and related benefits related to headcount growth from the acquisition of
Accelio to support product development efforts.
Research and development expenses decreased $16.1 million, or 7%, in fiscal 2001 compared to fiscal 2000. Of
the 7% change, 3% was due to a decrease in compensation and related benefits due to lower incentive compensation
expenses and 2% was due to a decrease in contractor and professional fees as less development work was performed
through outside sources.
We believe that investments in research and development, including the recruiting and hiring of software
developers, are critical to remain competitive in the marketplace and are directly related to continued timely
development of new and enhanced products. We will continue to focus on long-term opportunities available in our
end markets and make significant investments in the development of our desktop application and server-based
software products.
Sales and Marketing
2002 Change 2001 Change 2000
Sales and marketing......................................... $ 380.
4
(6)% $ 403.7 1% $ 401.
2
Percentage of total revenue.............................. 32.7% 32.8% 31.7%
Sales and marketing expenses include salary and benefit expenses, sales commissions, travel expenses, and
related facilities costs for our sales, marketing, customer support, order management, and order fulfillment
personnel. Sales and marketing expenses also include the costs of programs aimed at increasing revenue, such as
advertising, trade shows, public relations, and other market development programs.
Sales and marketing expenses decreased $23.3 million, or 6%, in fiscal 2002 compared to fiscal 2001, primarily
due to decreased marketing and advertising spending.
Sales and marketing expenses increased $2.5 million, or 1%, in fiscal 2001 compared to fiscal 2000. The 1%
increase was primarily made up of a 6% increase from marketing spending, which was partially offset by a 3%
decrease from compensation and related benefits due to lower incentive compensation.
General and Administrative
2002 Change 2001 Change 2000
General and administrative .......................... $ 108.1 (7)% $ 115.
6
(1)% $ 116.
5
Percentage of total revenue.......................... 9.3% 9.4% 9.2%
General and administrative expenses consist principally of salary and benefit expenses, travel expenses, and
related facilities costs for our finance, human resources, legal, information services, and executive personnel.