Adobe 2009 Annual Report Download - page 68

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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. Under the terms of the agreement, we completed
our tender offer to acquire all of the outstanding shares of Omniture common stock at a price of $21.50 per share, net to the
seller in cash, without interest. We expect to incur significant incremental costs, such as direct costs related to the acquisition
and costs associated with restructuring our operations. We believe that our existing cash and cash equivalents, short-term
investments and cash generated from operations will be sufficient to meet these cash outlays.
Restructuring
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 are only to those employees and
facilities that were associated with Adobe prior to the acquisition of Omniture on October 23, 2009.
Beginning in the first quarter of fiscal 2010, we expect to record approximately $15 million to $18 million primarily
related to the consolidation of leased facilities and up to approximately $26 million related to employee severance
arrangements for the elimination of the remaining full-time positions worldwide. We expect to accrue the facility related
liabilities beginning in the first quarter of fiscal 2010 and pay these liabilities through fiscal 2021 based on current lease
terms. Substantially all of these charges will result in cash expenditures.
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.
These costs were recorded as a part of the purchase price allocation, as discussed in Note 2 of our Notes to Consolidated
Financial Statements, and have been accrued for as of November 27, 2009. We expect to pay the termination benefits and
facility related liabilities through fiscal 2010 and fiscal 2013, respectively.
Additionally, approximately $1.5 million of restructuring costs related to facilities were included in the liabilities
assumed by us upon acquisition of Omniture on October 23, 2009.
In the fourth quarter of fiscal 2008, we initiated a restructuring program, consisting of reductions in workforce of
approximately 560 full-time positions globally and the consolidation of facilities, in order to reduce our operating costs and
focus our resources on key strategic priorities. In connection with this restructuring program, we recorded restructuring
charges in the fourth quarter of fiscal 2008 totaling $29.2 million related to termination benefits for the elimination of
approximately 460 of the 560 full-time positions globally.
During fiscal 2009, we continued to implement restructuring activities under this program. We vacated approximately
89,000 square feet of research and development and sales facilities in the U.S., the United Kingdom and Canada. We accrued
$8.5 million for the fair value of our future contractual obligations under these operating leases using our credit-adjusted risk-
free interest rate, estimated at approximately 6% as of the date we ceased to use the leased properties. This amount is net of
the fair value of future estimated sublease income of approximately $4.4 million. We also recorded charges of $6.7 million
for ongoing termination benefits for the elimination of substantially all of the remaining 100 full-time positions expected to
be terminated. We have paid substantially all of the accrued termination benefits during fiscal 2009 with and expect to pay
the remaining amounts in fiscal 2010. We expect to pay facilities-related liabilities through fiscal 2013.
We believe that our existing cash and cash equivalents, short-term investments and cash generated from operations will
be sufficient to meet the cash outlays for the restructuring changes described above.