Adobe 2009 Annual Report Download - page 102

Download and view the complete annual report

Please find page 102 of the 2009 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 139

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
102
We file income tax returns in the U.S. on a federal basis and in many U.S. state and foreign jurisdictions. We are subject
to the continual examination of our income tax returns by the IRS and other domestic and foreign tax authorities. Our major
tax jurisdictions are the U.S., Ireland and California. For California, Ireland and the U.S., the earliest fiscal years open for
examination are 2001, 2004 and 2005, respectively. We regularly assess the likelihood of outcomes resulting from these
examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that
may result from the current examination. We believe such estimates to be reasonable; however, there can be no assurance that
the final determination of any of these examinations will not have an adverse effect on our operating results and financial
position.
The timing of the resolution of income tax examinations is highly uncertain as are the amounts and timing of tax
payments that are part of any audit settlement process. These events could cause large fluctuations in the balance sheet
classification of current and non-current assets and liabilities. The Company believes that before the end of fiscal 2010, it is
reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax examination
periods will expire, or both. Given the uncertainties described above, we can only determine a range of estimated potential
decreases in underlying unrecognized tax benefits equal to $0 to approximately $10 million. These amounts would decrease
income tax expense under current GAAP related to income taxes and as a result of our adoption of new accounting standards
related to business combinations in fiscal 2010 (see Note 1). Under the new guidance related to business combinations,
adjustments to acquired income tax liabilities (including adjustments for acquisitions completed prior to the effective date)
that are recorded subsequent to the acquisition date will be recognized in income from continuing operations, with certain
exceptions, if such changes occur after the measurement period.
NOTE 11. RESTRUCTURING
2009 Restructuring Plan Charges
On November 10, 2009, we initiated a restructuring plan to appropriately align our costs in connection with our fiscal
2010 operating plan impacting up to approximately 630 full-time positions worldwide. In connection with this restructuring
plan, in the fourth quarter of fiscal 2009, we recorded restructuring charges of approximately $25.5 million related to ongoing
termination benefits for the elimination of approximately 340 of these full-time positions worldwide. As of November 27,
2009, approximately $2.5 million was paid. The remaining accrual associated with these ongoing termination benefits is
expected to be paid during fiscal 2010. The restructuring activities related to this program affect only those employees that
were associated with Adobe prior to the acquisition of Omniture, Inc. on October 23, 2009.
Beginning in the first quarter of fiscal 2010, we expect to incur up to approximately $18 million related to the
consolidation of leased facilities.
The following table sets forth a summary of Adobe restructuring activities during fiscal 2009 (in thousands):
November 28,
2008
Costs
Incurred
Cash
Payments
Other
Adjustments
November 27,
2009
Termination benefits ....................
$
—
$
25,521
$
(2,537
)
$
—
$
22,984
Accrued restructuring charges of approximately $23.0 million at November 27, 2009 is recorded in accrued
restructuring, current in our Consolidated Balance Sheets.
Omniture Restructuring Charges
We completed our acquisition of Omniture on October 23, 2009. In the fourth quarter of fiscal 2009, we initiated a plan
to restructure the pre-merger operations of Omniture to eliminate certain duplicative activities, focus our resources on future
growth opportunities and reduce our cost structure. In connection with this restructuring plan, we accrued a total of
approximately $10.6 million in costs related to termination benefits for the elimination of approximately 100 regular
positions and for the closure of duplicative facilities. We also accrued approximately $0.2 million in costs related to the
cancellation of certain contracts associated with the wind-down of subsidiaries and other service contracts held by Omniture.
Restructuring charges related to the Omniture acquisition were recorded as a part of the purchase price allocation, as
discussed in Note 2 and have been accrued for as of November 27, 2009.