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Fiscal 2013 Compared with Fiscal 2012
G&A expenses decreased in fiscal 2013, as compared with fiscal 2012, primarily due to the absence in fiscal 2013 of $202
million of impairment charges on real estate held for sale recorded in the fourth quarter of fiscal 2012. Lower share-based
compensation expense in fiscal 2013 and a recovery in the market value of property held for sale recorded during fiscal 2013
also contributed to the decrease. These decreases were partially offset by higher headcount-related expenses resulting in part
from our acquisitions and also by higher corporate-level expenses. Corporate-level expenses, which tend to vary from period
to period, included operational infrastructure activities such as IT project implementations, which included investments in our
global data center infrastructure, and investments related to operational and financial systems.
Effect of Foreign Currency
In fiscal 2014, foreign currency fluctuations, net of hedging, decreased the combined R&D, sales and marketing, and G&A
expenses by $153 million, or approximately 0.9%, compared with fiscal 2013. In fiscal 2013, foreign currency fluctuations, net
of hedging, decreased the combined R&D, sales and marketing, and G&A expenses by $227 million, or approximately 1.3%,
compared with fiscal 2012.
Headcount
Fiscal 2014 Compared with Fiscal 2013
Our headcount decreased by approximately 1,000 employees in fiscal 2014. The decrease was due to headcount reductions
from attrition and from our workforce reduction plan announced in August 2013. These headcount reductions were partially
offset by the increase in headcount from targeted hiring in engineering, services, sales, and also by increased headcount from
our recent acquisitions.
In August 2014, we announced a restructuring plan that will impact up to 6,000 employees, representing approximately 8% of
our global workforce. We expect to reinvest substantially all of the cost savings from the restructuring actions in our key
growth areas such as data center, software, security, and cloud.
Fiscal 2013 Compared with Fiscal 2012
Our headcount increased by 8,410 employees in fiscal 2013. The increase was attributable to the headcount from acquisitions,
the largest of which was NDS, as well as targeted hiring in engineering and services.
Share-Based Compensation Expense
The following table presents share-based compensation expense (in millions):
Years Ended July 26, 2014 July 27, 2013 July 28, 2012
Cost of sales—product ................................................... $45 $40 $53
Cost of sales—service ................................................... 150 138 156
Share-based compensation expense in cost of sales ............................. 195 178 209
Research and development ................................................ 411 286 401
Sales and marketing ..................................................... 549 484 588
General and administrative ................................................ 198 175 203
Restructuring and other charges ............................................ (5) (3) —
Share-based compensation expense in operating expenses ....................... 1,153 942 1,192
Total share-based compensation expense .................................... $1,348 $1,120 $1,401
The increase in share-based compensation expense for fiscal 2014, as compared with fiscal 2013, was due primarily to share-
based compensation expense attributable to equity awards assumed with respect to our recent acquisitions and higher forfeiture
credits in fiscal 2013.
The decrease in share-based compensation expense for fiscal 2013, as compared with fiscal 2012, was due primarily to a
decrease in the aggregate value of share-based awards granted in recent periods, higher forfeiture credits in fiscal 2013, and
the effect of stock options awards from prior years becoming fully amortized and replaced with restricted stock units with a
lower aggregate value.
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