Following are income statements for Life Technologies Corporation and Affymetrix Inc., competitors in the life sciences and clinical healthcare industry. Use these financial statements to answer the required.

Life Technologies Corporation Consolidated Statements of Operations
(In thousands)
For the Years Ended December 31,	2012	2011	2010
Revenues	$3,798,510	$3,775,672	$3,588,094
Cost of revenues	1,372,277	1,356,967	1,188,199
Purchased intangibles amortization	291,756	308,728	293,754
Gross profit	2,134,477	2,109,977	2,106,141
Selling, general and administrative	1,054,616	1,008,973	1,023,179
Research and development	341,892	377,924	375,465
Purchased in-process research and development	---	--	1,650
Business consolidation costs	72,732	75,324	93,450
Total operating expenses	1,469,240	1,462,221	1,493,744
Operating income	665,237	647,756	612,397
Other income (expense):
Interest income	2,401	3,932	4,266
Interest expense	(123,915)	(162,073)	(152,322)
Loss on early extinguishment of debt	---	--	(54,185)
Gain on divestiture of equity investments	---	--	37,260
Other income (expense), net	(11,898)	(10,913)	(5,864)
Total other expense, net	(133,412)	(169,054)	(170,845)
Income before provision for income taxes	531,825	478,702	441,552
Income tax provision	(101,376)	(100,868)	(63,694)
Net income	430,449	377,834	377,858
Net loss attributable to noncontrolling interests	406	658	437
Net income attributable to Life Technologies	$430,855	$ 378,492	$ 378,295

Affymetrix Inc. Consolidated Statements of Operations
(In thousands)
Year Ended December 31,	2012	2011	2010
Product sales	$266,063	$241,273	$277,743
Services	29,560	26,201	33,003
Total revenue	295,623	267,474	310,746
Cost of product sales	116,261	97,815	117,384
Cost of services and other	15,874	13,137	15,822
Research and development	57,881	63,591	67,934
Selling, general and administrative	142,853	109,572	114,773
Restructuring charges	1,845	--	--
Total costs and expenses	334,714	284,115	315,913
Loss from operations	(39,091)	(16,641)	(5,167)
Interest income/(expense) and other, net	(265)	(6,302)	(1,487)
Interest expense	7,193	3,813	7,706
Gain from repurchase of convertible notes	---	--	6,297
Loss before income taxes	(46,549)	(26,756)	(8,063)
Income tax provision (benefit)	(35,853)	1,405	2,170
Net loss	$(10,696)	$ (28,161)	$ (10,233)

Required:

1. How do Life Technologies and Affymetrix account for R&D expenditures?

1. Life Technologies and Affymetrix R&D expense includes many different types of costs. List three specific costs included in R&D expense on the income statement.

1. Compare R&D expenses of the two companies. (Hint: prepare common-size R&D expenses. Consider both direct R&D expenses as well as acquired R&D.)

d. What trend do you notice in the R&D expenses of each company over time?