Symantec 2014 Annual Report Download - page 121

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Fluctuations in the U.S. dollar compared to foreign currencies unfavorably impacted our international
revenue by approximately $20 million for fiscal 2014 as compared to fiscal 2013. This was due to a $90 million
unfavorable foreign currency fluctuation in the Asia Pacific and Japan region partially offset by a favorable
foreign currency fluctuation of $70 million in the EMEA region. For fiscal 2013 as compared 2012, we had an
unfavorable foreign currency exchange effect of $141 million, $118 million from the EMEA region, while the
remainder of the variance was from the Asia Pacific and Japan region.
Our international sales are and are expected to continue to be a significant portion of our revenue. As a
result, revenue is expected to continue to be affected by foreign currency exchange rates as compared to the U.S.
dollar. We are unable to predict the extent to which revenue in future periods will be impacted by changes in
foreign currency exchange rates. If international sales become a greater portion of our total sales in the future,
changes in foreign currency exchange rates may have a potentially greater impact on our revenue and operating
results.
Cost of revenue
Fiscal
2014
Change in Fiscal
2013
Change in Fiscal
2012$ % $ %
(Dollars in millions)
Cost of content, subscription, and
maintenance $ 1,008 $ (9) (1)% $ 1,017 $ 74 8 % $ 943
As a percentage of related revenue 17 % 17 % 16 %
Cost of license $ 87 $ (2) (2)% $ 89 $ 41 85 % $ 48
As a percentage of related revenue 12 % 10 % 5 %
Amortization of intangible assets $ 54 $ (15) (22)% $ 69 $ (22) (24)% $ 91
As a percentage of total net revenue 1 % 1 % 1 %
Total $ 1,149 $ (26) (2)% $ 1,175 $ 93 9 % $ 1,082
Gross margin 83 % 83 % 84 %
Fiscal 2014 compared to Fiscal 2013:
Cost of content, subscription, and maintenance consists primarily of technical support costs, costs of billable
services, and fees to OEMs under revenue-sharing agreements. Cost of license consists primarily of royalties
paid to third parties under technology licensing agreements, appliance manufacturing costs, and other direct
material costs.
Intangible assets are primarily comprised of developed technologies and patents from acquired companies.
Amortization decreased for fiscal 2014 as certain developed technologies became fully amortized early in fiscal
2014.
Fiscal 2013 compared to Fiscal 2012:
Cost of content, subscription, and maintenance increased for fiscal 2013 primarily due to higher technical
support, services, and OEM royalty costs. The increased costs were due to growth in our business and higher
royalty payments to major OEM partners as part of revenue-sharing arrangements. Cost of license increased
primarily due to higher direct costs associated with the appliance business.
Amortization decreased for fiscal 2013 due to certain developed technologies becoming fully amortized,
partially offset by the incremental amortization associated with our fiscal 2012 acquisitions.
42