Adobe 2012 Annual Report Download - page 67

Download and view the complete annual report

Please find page 67 of the 2012 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 136

  • 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

67
General and Administrative
General and administrative expenses consist primarily of compensation and benefit expenses, travel expenses and related
facilities costs for our finance, facilities, human resources, legal, information services and executive personnel. General and
administrative expenses also include outside legal and accounting fees, provision for bad debts, expenses associated with computer
equipment and software used in the administration of the business, charitable contributions and various forms of insurance.
General and administrative expenses increased due to the following:
% Change
2012-2011 % Change
2011-2010
Compensation and related benefits associated with headcount growth.................................. 4% 3%
Professional and consulting fees............................................................................................. (3) 5
Compensation associated with incentive compensation and stock-based compensation....... 1 2
Various individually insignificant items................................................................................. 3 (2)
Total change......................................................................................................................... 5% 8%
Professional and consulting fees decreased during fiscal 2012 as compared to fiscal 2011 primarily due to decreased litigation
expense. Professional and consulting fees increased during fiscal 2011 as compared to fiscal 2010 primarily due to increase in
fees for various technology projects and increased litigation expense.
Restructuring and Other Related Charges (Credits)
During the past several years, we have initiated various restructuring plans. During fiscal 2012, in connection with our
Fiscal 2011 Restructuring Plan and Other Restructuring Plans, we recorded $17.4 million associated with termination benefits and
closing redundant facilities. We also recorded $20.3 million in net favorable employee termination and facility related adjustments
for changes in previous estimates during the fiscal year. During fiscal 2011, in connection with our 2011 Restructuring Plan and
Other Restructuring Plans, we recorded $85.6 million associated with termination benefits and closing redundant facilities as well
as $12.7 million related to the write-off of certain assets that were no longer useful to the company based on changes in our
business. We also recorded minor favorable adjustments for changes in previous estimates. During 2010, in connection with our
Fiscal 2009 Restructuring Plan we recorded $23.3 million associated with termination benefits and closing redundant facilities
which is net of minor favorable adjustments for changes in previous estimates.
See Note 10 of our Notes to Consolidated Financial Statements for further information regarding our restructuring plans.
Amortization of Purchased Intangibles
During the last several years, we have completed a number of business combinations and asset acquisitions including
Macromedia in fiscal 2006, Omniture in fiscal 2009, Day in fiscal 2010, eight smaller acquisitions in fiscal 2011 and Efficient
Frontier in fiscal 2012. As a result of these acquisitions, we purchased intangible assets that are being amortized over their estimated
useful lives ranging from one to twelve years.
Amortization expense increased 14% during fiscal 2012 as compared to fiscal 2011 primarily due to amortization expense
associated with intangible assets purchased through our smaller acquisitions in fiscal 2011 and Efficient Frontier in fiscal 2012.
Amortization expense decreased 41% during fiscal 2011 as compared to fiscal 2010 primarily due to amortization expense
associated with certain intangible assets purchased through our acquisition of Macromedia that were fully amortized at the end
of fiscal 2010. This decrease was offset in part by an increase in amortization expense as a result of intangible assets purchased
through our acquisition of Day in the fourth quarter of fiscal 2010 as well as an increase in intangible assets purchased through
our fiscal 2011 acquisitions.
Table of Contents