Adobe 2009 Annual Report Download - page 53

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto.
In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements, including
statements regarding product plans, future growth and market opportunities which involve risks and uncertainties that could
cause actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to
such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part 1, Item 1A of this
report. You should carefully review the risks described herein and in other documents we file from time to time with the SEC,
including the Quarterly Reports on Form 10-Q to be filed in fiscal 2010. When used in this report, the words “expects,”
“could,” “would,” “may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “looks for,”
“looks to” and similar expressions, as well as statements regarding our focus for the future, are generally intended to
identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak
only as of the date of this Annual Report on Form 10-K. We undertake no obligation to publicly release any revisions to the
forward-looking statements or reflect events or circumstances after the date of this document.
BUSINESS OVERVIEW
Founded in 1982, Adobe Systems Incorporated is one of the largest and most diversified software companies in the
world. We offer a line of creative, business, Web and mobile software and services used by creative professionals, knowledge
workers, consumers, OEMs, developers and enterprises for creating, managing, delivering, optimizing and engaging with
compelling content and experiences across multiple operating systems, devices and media. We distribute our products
through a network of distributors, VARs, systems integrators, ISVs and OEMs, direct to end users and through our own
Website at www.adobe.com. We also license our technology to hardware manufacturers, software developers and service
providers, and we offer integrated software solutions to businesses of all sizes. We have operations in the Americas, Europe,
EMEA and Asia. Our software runs on personal computers with Microsoft Windows, Apple OS, Linux, UNIX and various
non-PC platforms, depending on the product.
ACQUISITION OF OMNITURE
On October 23, 2009, we completed the acquisition of Omniture, an industry leader in Web analytics and online
business optimization based in Orem, Utah, for approximately $1.8 billion. Accordingly, we have included the results of the
business operations acquired from Omniture in our consolidated results of operations beginning on October 24, 2009. We
expect the acquisition to have a significant impact on our consolidated financial position, results of operations and cash
flows. We expect our revenues, cost of revenues and operating expenses to increase in the future, but we also anticipate both
revenue and cost saving synergies. Coinciding with the integration of Omniture, we created a new reportable segment for
financial reporting purposes. See Note 2 of our Notes to Consolidated Financial Statements for further information regarding
this acquisition.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing our consolidated financial statements in accordance with GAAP and pursuant to the rules and regulations of
the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and
expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on
historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could
differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our
assumptions, judgments and estimates. We also discuss our critical accounting policies and estimates with the Audit
Committee of the Board of Directors.
We believe that the assumptions, judgments and estimates involved in the accounting for revenue recognition,
stock-based compensation, business combinations, goodwill impairment and income taxes have the greatest potential impact
on our consolidated financial statements. These areas are key components of our results of operations and are based on
complex rules which require us to make judgments and estimates, so we consider these to be our critical accounting policies.
Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially
from actual results.