Microsoft 2013 Annual Report Download - page 27

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OPERATING EXPENSES
Research and Development
(In millions, except percentages)
2013
2012
2011
Percentage
Change 2013
Versus 2012
Percentage
Change
2012
Versus 2011
Research and development
$ 10,411
$ 9,811
$ 9,043
6%
8%
As a percent of revenue
13%
13%
13%
0ppt
0ppt
Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other
headcount-related expenses associated with product development. Research and development expenses also include
third-party development and programming costs, localization costs incurred to translate software for international markets,
and the amortization of purchased software code.
Fiscal year 2013 compared with fiscal year 2012
Research and development expenses increased, reflecting a $460 million or 6% increase in headcount-related expenses,
largely related to the Entertainment and Devices Division.
Fiscal year 2012 compared with fiscal year 2011
Research and development expenses increased, primarily reflecting a 10% increase in headcount-related expenses.
Sales and Marketing
(In millions, except percentages)
2013
2012
2011
Percentage
Change 2013
Versus 2012
Percentage
Change
2012
Versus 2011
Sales and marketing
$ 15,276
$ 13,857
$ 13,940
10%
(1)%
As a percent of revenue
20%
19%
20%
1ppt
(1)ppt
Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other
headcount-related expenses associated with sales and marketing personnel and the costs of advertising, promotions,
trade shows, seminars, and other programs.
Fiscal year 2013 compared with fiscal year 2012
Sales and marketing expenses grew, reflecting an $898 million increase in advertising costs associated primarily with
Windows 8 and Surface, $181 million higher fees paid to third-party software advisors, and a $145 million or 2% increase
in headcount-related expenses.
Fiscal year 2012 compared with fiscal year 2011
Sales and marketing expenses decreased slightly, primarily reflecting decreased advertising and marketing of the Xbox
360 platform, Windows Phone, and Bing, offset in part by a 5% increase in headcount-related expenses.
General and Administrative
(In millions, except percentages)
2013
2012
2011
Percentage
Change 2013
Versus 2012
Percentage
Change
2012
Versus 2011
General and administrative
$ 5,149
$ 4,569
$ 4,222
13%
8%
As a percent of revenue
7%
6%
6%
1ppt
0ppt