Seagate 2014 Annual Report Download - page 54

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TableofContents
GrossMargin
Forfiscalyear2014,grossmarginasapercentageofrevenueincreasedto28%from27%inthepriorfiscalyear,asaresultofimprovedproductmixandcost
savingsduetoincreasesinoperationalefficiencies,offsetbymodestpriceerosion.
OperatingExpenses
ProductDevelopmentExpense.Productdevelopmentexpensesforfiscalyear2014increasedfromfiscalyear2013duetoincreasedinvestmentsinHDD
andalternativestoragetechnologiesofapproximately$35millionandheadcountrelatedcostsofapproximately$36million,netofadecreaseinvariable
performancebasedcompensationexpensesof$26million.Inaddition,theconsolidationofXyratex,acquiredonMarch31,2014contributedapproximately
$23milliontoProductdevelopmentexpense.
MarketingandAdministrativeExpense.Marketingandadministrativeexpensesforfiscalyear2014increasedfromfiscalyear2013duetoa$40million
increaseinheadcountrelatedexpensesduetoannualfocalincreasesandincreasedinvestmentsincertainstrategicinitiativesaswellasenhancementofcore
businessesof$25million.Inaddition,theconsolidationofXyratexcontributedapproximately$15milliontoMarketingandadministrativeexpense.
AmortizationofIntangibles.Amortizationofintangiblesforfiscalyear2014increasedfromfiscalyear2013duetothecommencementofamortizationof
certainin-processresearchanddevelopmentassetsacquiredfromSamsung'sHDDbusinessinDecemberof2011andLaCieinAugustof2012.
RestructuringandOther,net.Restructuringandother,netforfiscalyears2014increasedfromfiscalyear2013primarilyduetoarestructuringcharge
recordedduringtheDecember2013quarterassociatedwithareductioninworkforce.
OtherExpense,net
51
 FiscalYearsEnded
(Dollarsinmillions) 
June27,
2014
June28,
2013 Change
%
Change
Costofrevenue  $ 9,878 $ 10,411 $ (533) (5)%
Grossmargin  $ 3,846 $ 3,940 $ (94) (2)%
Grossmarginpercentage   28% 27%   
 FiscalYearsEnded
(Dollarsinmillions) 
June27,
2014
June28,
2013 Change
%
Change
Productdevelopment  $ 1,226 $ 1,133 $ 93  8%
Marketingandadministrative   722  635  87  14%
Amortizationofintangibles   98  79  19  24%
Restructuringandother,net   24  2  22  1,100%
Operatingexpenses  $ 2,070 $ 1,849 $ 221  
 FiscalYearsEnded
(Dollarsinmillions) 
June27,
2014
June28,
2013 Change
%
Change
Otherincome(expense),net $ (220) $ (260) $ 40 (15)%