Adobe 2013 Annual Report Download - page 47

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47
Research and Development, Sales and Marketing and General and Administrative Expenses
The increase in research and development, sales and marketing and general and administrative expenses during fiscal 2013
as compared to fiscal 2012 is primarily due to higher incentive compensation program achievement in fiscal 2013, increases in
stock-based compensation expense due to higher share prices during fiscal 2013 as compared to fiscal 2012 as well as a shorter
vesting term, which decreased from four years to three years, for stock awards granted as part of our annual review process during
the first quarter of fiscal 2013.
Research and Development
Research and development expenses consist primarily 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 during fiscal 2013 as compared to fiscal 2012 due to the following:
% Change
2013-2012
Compensation and related benefits associated with headcount 3%
Compensation associated with incentive compensation and stock-based compensation 7
Various individually insignificant items 1
Total change 11%
Research and development expenses remained relatively stable during fiscal 2012 as compared to fiscal 2011.
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 application, tool and service offerings.
Sales and Marketing
Sales and marketing expenses consist primarily of salary and benefit expenses, sales commissions, travel expenses and
related facilities costs for our sales, marketing, order management and global supply chain management 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 increased due to the following:
% Change
2013-2012 % Change
2012-2011
Compensation and related benefits associated with headcount 4% 2%
Marketing spending related to product launches and overall marketing efforts to further
increase revenue — 2
Compensation associated with incentive compensation and stock-based compensation 4 3
Various individually insignificant items (1) 2
Total change 7% 9%
General and Administrative
General and administrative expenses consist primarily of compensation and benefit expenses, travel expenses and related
facilities costs for our finance, facilities, human resources, legal, information services and executive personnel. General and
administrative expenses also include outside legal and accounting fees, provision for bad debts, expenses associated with computer
equipment and software used in the administration of the business, charitable contributions and various forms of insurance.
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