Seagate 2015 Annual Report Download - page 55
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Forfiscalyear2015,grossmarginasapercentageofrevenueremainedflatfromthepriorfiscalyearasaresultofimprovedproductmixandcostsavingsdue
toincreasedoperationalefficiencies,offsetbymoderatepriceerosion.
OperatingExpenses
ProductDevelopmentExpense.Productdevelopmentexpensesforfiscalyear2015increasedfromfiscalyear2014mostlyduetoanincreaseinheadcount
relatedcostsof$111millionattributedtotheconsolidationofXyratexandLSI'sFlashBusinessaswellasa53-weekfiscalyearin2015comparedto52weeksin
2014.
MarketingandAdministrativeExpense.Marketingandadministrativeexpensesforfiscalyear2015increasedfromfiscalyear2014primarilyduetoan
increaseinheadcountrelatedcostsof$50millionattributedtotheconsolidationofXyratexandLSI'sFlashBusiness,non-recurringlegalcostreimbursement
receivedinfiscalyear2014of$24million,aswellasa53-weekfiscalyearin2015comparedto52weeksin2014.
AmortizationofIntangibles.Amortizationofintangiblesforfiscalyear2015increasedby$31million,ascomparedtofiscalyear2014,asaresultofthe
acquisitionsofLSI'sFlashBusinessandXyratex.
RestructuringandOther,net.Restructuringandother,netforfiscalyear2015increasedby$8million,ascomparedtofiscalyear2014primarilyduetoa
restructuringchargerecordedduringtheMarch2015quartertoreduceworkforceasaresultofourongoingfocusoncostefficienciesinallareasofourbusiness.
Gainonarbitrationaward,net.Gainonarbitrationaward,netforfiscalyear2015increasedfromfiscalyear2014duetofinalawardreceivedinthe
amountof$630million,lesslitigationandotherrelatedcostsof$10million,intheCompany'scaseagainstWesternDigitalforthemisappropriationofthe
Company'stradesecrets.
Otherincome(expense),net
Otherincome(expense),netforfiscalyear2015decreasedby$132million,ascomparedtofiscalyear2014primarilyduetothepartialpaymentof
$143millionforinterestaccruedonthefinalarbitrationawardamountinourcaseagainstWesternDigitalandadecreaseinlossesfromearlyredemptionand
repurchaseofdebtof$15million,partiallyoffsetbya$12millionincreaseininterestexpense.
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FiscalYearsEnded
(Dollarsinmillions)
July3,
2015
June27,
2014 Change
%
Change
Productdevelopment $ 1,353 $ 1,226 $ 127 10%
Marketingandadministrative 857 722 135 19%
Amortizationofintangibles 129 98 31 32%
Restructuringandother,net 32 24 8 33%
Gainonarbitrationaward,net (620) — (620) (100)%
Operatingexpenses $ 1,751 $ 2,070 $ (319)
FiscalYearsEnded
(Dollarsinmillions)
July3,
2015
June27,
2014 Change
%
Change
Otherincome(expense),net $ (88) $ (220) $ 132 (60)%