Adobe 2001 Annual Report Download - page 30

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Amortization of Goodwill and Purchased Intangibles
2001 Change 2000 Change 1999
Amortization of goodwill and purchased
intangibles ......................... $14.3 104% $7.0 45% $4.8
Percentage of total revenue .............. 1.2% 0.6% 0.5%
Amortization of goodwill and purchased intangibles increased $7.3 million, or 104%, in fiscal 2001
compared to fiscal 2000, due to a full year of amortization of Glassbook goodwill and purchased
intangibles.
Amortization of goodwill and purchased intangibles in fiscal 2000 and 1999 primarily related to the
acquisition of substantially all of the assets of GoLive Systems, Inc. and a related partnership (together
‘‘GoLive Systems’’) in December 1998. Amortization of goodwill and purchased intangibles was higher in
fiscal 2000 compared to fiscal 1999 primarily due to the additional amortization related to the acquisition
of Glassbook in September 2000. (For further information, see Note 2 of our Notes to Consolidated
Financial Statements.)
Nonoperating Income (Loss)
Investment Gain (Loss)
2001 Change 2000 Change 1999
Investment gain (loss) .............. $(93.4) (751)% $14.3 (84)% $88.9
Percentage of total revenue .......... (7.6)% 1.1% 8.8%
Investment gain (loss) consists principally of realized gains or losses from the sale of marketable
equity investments, other-than-temporary declines in the value of marketable equity securities, and equity
method gains and losses of Adobe Ventures.
During fiscal 2001, investment losses consisted of other-than-temporary writedowns related to our
short-term investments in Tumbleweed Communications Corp. (‘‘Tumbleweed’’), Salon.com, Engage, Inc.,
Liquent, Inc. (formerly ESPS, Inc.), Avantgo, Inc., Viewpoint Corp., and Virage, Inc. of $53.1 million.
These losses were partially offset by gains from the sale of our marketable equity securities totaling
$20.1 million, of which $0.6 million of premiums were recorded in interest and other income. We also
recorded net investment losses related to investments in Adobe Ventures and our cost method investments
totaling $59.8 million. As of November 30, 2001, our short-term investments included marketable equity
securities of $37.8 million and our long-term investments included investments in Adobe Ventures and
other cost method investments of $31.7 million. These securities are inherently risky and we may
experience further deterioration in fair value in the future.
During fiscal 2000, we recorded investment gains related to the sale of a portion of our investment in
Tumbleweed Communications Corp. (‘‘Tumbleweed’’) and Digimarc Corporation for $10.4 million and
$2.2 million, respectively. Additionally, we recorded investment gains related to the mark-to-market
valuation adjustment for AvantGo, Inc. totaling $13.0 million and other net gains related to various other
Adobe Ventures investments activities totaling approximately $15.0 million. These gains were partially
offset by investment losses related to the writedown of our investments in Engage, Inc.; Classmates
Online, Inc. (formerly eCircles, Inc.); Salon.com; and Impresse Corporation, totaling approximately
$26.3 million.
In fiscal 1999, we recorded a realized gain of $58.4 million related to the sale of our investment in
Vignette Corporation. We also recorded investment gains from mark-to-market adjustments totaling
$17.8 million, $10.4 million, and $7.0 million related to investments in ESPS, Inc.; DigitalThink, Inc.; and
Tumbleweed, respectively. These gains were partially offset by an investment loss of $5.2 million related to
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