SanDisk 2012 Annual Report Download - page 150

Our fiscal year 2011 research and development expense increased from fiscal year 2010 primarily due to
higher third-party engineering costs of $69 million, employee-related costs of $39 million related to increased
headcount and compensation expense, and technology license amortization expense of $17 million.
Sales and Marketing.
FY 2012
Percent
Change FY 2011
Percent
Change FY 2010
(In millions, except percentages)
Sales and marketing ................... $ 224.1 12% $ 199.4 (5%) $ 209.8
Percent of revenue ..................... 4.4% 3.5% 4.4%
Our fiscal year 2012 sales and marketing expense increased from fiscal year 2011 primarily due to a net
compensation expense increase of $14 million driven by higher headcount, partially offset by lower incentive
compensation. In addition, we incurred higher marketing and promotional costs of $11 million.
Our fiscal year 2011 sales and marketing expense decreased from fiscal year 2010 primarily due to lower
retail promotional and marketing costs of ($9) million.
General and Administrative.
FY 2012
Percent
Change FY 2011
Percent
Change FY 2010
(In millions, except percentages)
General and administrative .............. $ 150.4 (5%) $ 157.8 (5%) $ 166.5
Percent of revenue ..................... 3.0% 2.8% 3.5%
Our fiscal year 2012 general and administrative expense decreased from fiscal year 2011 primarily due to
insurance recoveries of legal fees of ($5) million.
Our fiscal year 2011 general and administrative expense decreased from fiscal year 2010 primarily due to
lower employee costs of ($21) million related to the modification of stock awards and benefits pursuant to the
retirement agreement of our former Chief Executive Officer in fiscal year 2010 that did not recur in fiscal year
2011, offset by higher legal costs of $8 million.
Amortization and Write-off of Acquisition-Related Intangible Assets.
FY 2012
Percent
Change FY 2011
Percent
Change FY 2010
(In millions, except percentages)
Amortization and write-off of acquisition-
related intangible assets ............... $ 9.9 125% $ 4.4 175% $ 1.6
Percent of revenue ..................... 0.2% 0.1% 0.0%
Amortization and write-off of acquisition-related intangible assets in fiscal year 2012, compared to fiscal
year 2011, was higher due to increased amortization of intangible assets from the acquisitions of FlashSoft
Corporation, or FlashSoft, and Schooner Information Technology, Inc., or Schooner, as well as a full year of
amortization related to the acquisition of Pliant, offset by a reduction in the amortization of intangible assets
from a prior acquisition, which became fully amortized during the first quarter of fiscal year 2012. Amortization
of acquisition-related intangible assets associated with these acquisitions will continue to be amortized through
fiscal year 2016.
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