Autodesk 2003 Annual Report Download - page 30

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Cost of Revenues
Fiscal 2003
Increase (decrease)
compared to prior
fiscal year
Increase (decrease)
compared to
prior fiscal year
Fiscal 2001$percent Fiscal 2002 $percent
(in millions)
Costofrevenues .................. $140.2 $(11.0) (7%) $151.2 $1.0 1% $150.2
As a percentage of net revenues ...... 17% 16% 16%
Cost of revenues includes direct material and overhead charges, royalties, amortization of purchased
technology and capitalized software and the labor cost of processing orders and fulfilling service contracts.
Direct material and overhead charges include the cost of hardware sold (mainly workstations manufactured by
SGI for the Discreet Segment), costs associated with transferring our software to electronic media, printing of
user manuals and packaging materials, and shipping and handling costs.
The decrease of $11.0 million between fiscal years 2003 and 2002 was due primarily to the mix of product
sales and overall lower revenue between years.
The cost of revenues in fiscal year 2002 was the same as a percentage of net revenues and similar in
absolute dollars to cost of revenues in fiscal year 2001.
In the future, cost of revenues as a percentage of net revenues is likely to continue to be impacted by the mix
of product sales, increased consulting and hosted service costs, software amortization costs, royalty rates for
licensed technology embedded in our products and the geographic distribution of sales. However, we expect
future cost of revenues as a percentage of net revenues to remain within our historical range of 16 to 20 percent.
Marketing and Sales Expenses
Fiscal 2003
Increase (decrease)
compared to prior
fiscal year
Fiscal 2002
Increase (decrease)
compared to prior
fiscal year
Fiscal 2001$percent $percent
(in millions)
Marketing and sales ................. $331.7 $(11.8) (3%) $343.5 $25.7 8% $317.8
As a percentage of net revenues ....... 40% 36% 34%
Marketing and sales expenses include salaries, dealer and sales commissions, and travel and facility costs
for our marketing, sales, dealer training and support personnel. These expenses also include programs aimed at
increasing revenues, such as advertising, trade shows and expositions, as well as various sales and promotional
programs designed for specific sales channels and end users.
The decrease of $11.8 million between fiscal years 2003 and 2002 was due primarily to lower dealer and
sales commissions of $4.6 million due to lower revenue, lower rent and occupancy charges of $1.4 million,
which resulted from cost saving initiatives, and lower professional services of $4.5 million.
The increase of $25.7 million between fiscal years 2002 and 2001 was primarily due to higher employee-
related expenses resulting from an increasing focus on direct sales to major accounts.
We expect to continue to invest in marketing and sales of our products, to develop market opportunities and
to promote our competitive position. Accordingly, we expect marketing and sales expenses to continue to be
significant, both in absolute dollars and as a percentage of net revenues.
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