Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
DIRECTORS’ REPORT FOR THE YEAR ENDED DECEMBER 31, 2011
Table 2
Q4 Q4 % Full Year Full Year %
Figures in million euros 2011 2010 Change 2011 2010 Change
Ordinary depreciation and amortisation (45.2) (44.4) 1.8% (168.7) (170.0) (0.8%)
Amortisation derived from PPA (17.8) (40.0) (55.7%) (71.0) (161.5) (56.0%)
Impairments (1.6) (8.2) (80.7%) (2.5) (10.7) (76.3%)
Depreciation and amortisation (64.6) (92.7) (30.4%) (242.2) (342.2) (29.2%)
Depreciation and amortisation capitalised (1)
0.8 0.8 (2.3%) 3.6 3.3 8.4%
Depreciation and amortisation post-capitalisations (63.8) (91.9) (30.6%) (238.6) (338.9) (29.6%)
(1) Included within the caption Other operating expenses in the Group Income Statement
Other Operating Expenses
Other operating expenses decreased by 7.9% to €82.6 million in the fourth quarter of 2011.
For the full year period, Other operating expenses declined by €14.8 million or 4.6%.
This decrease was driven by the positive effect of certain cost control measures put in place
during the year, a higher rate of full time hirings vs. contractors during the year (slightly
reduced externalization rate and therefore lower number of contractors in certain areas), as
well as a reduction in costs of operations, mainly driven by the positive impact of the TPF
decommissioning. In addition, there was a positive impact from the sale in 2010 of
Vacation.com and Hospitality Group. Finally, certain operating costs also benefit from the
translational impact of a stronger Euro vs. USD. These positive effects were partially offset
by an increase in certain G&A expenses such as building and facilities expenses (driven by
growth in FTEs and development activities) and local taxes.
R&D expenditure
As a leading and differentiated technology provider for the travel industry, Amadeus
undertakes significant R&D activities, which are the main driver for growth. As described
below, our R&D efforts can be classified in various categories, including customer
implementations, portfolio expansion / product evolution, diversification into non-air IT and
internal technological projects.
In the fourth quarter of 2011, total R&D expenditure (including both capitalised and noncapitalised
expenses) decreased by 9.2% vs. the same period in 2010. Total R&D for the
year amounted to €344.4 million, 5.7% higher than in 2010. As a percentage of revenue,
R&D costs amounted to 12.7% in 2011, in line with the level of 12.6% in 2010.
This increase in R&D expenditure reflects the full year impact of certain initiatives
undertaken during 2010 (driving higher growth in the first half of the year) and higher
investment carried out during the year as a result of certain new projects.
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