Avid 2008 Annual Report Download

Download and view the complete annual report

Please find the complete 2008 Avid 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 102

  • 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

AVID 2008 ANNUAL REPORT

Table of contents

  • Page 1
    AVID 2008 ANNUAL REPORT

  • Page 2
    ...video editing line-up that offers professional customers greater performance, quality and value. We introduced a more efficient, open and intuitive version of our award-winning audio creation and production system - Pro Tools® 8. Similarly, the latest release of our consumer video editing software...

  • Page 3
    ..., Massachusetts 01876 (Address of Principal Executive Offices, Including Zip Code) (978) 640-6789 (Registrant's Telephone Number, Including Area Code) Securities Registered Pursuant to Section 12(b) of the Act: Name of Exchange on which registered Title of Each Class Common Stock, $.01 Par...

  • Page 4
    ... to a Vote of Security Holders Executive Officers of the Registrant 1 9 15 15 16 16 16 PART II. ITEM 5. ITEM 6. ITEM 7. ITEM 7A. ITEM 8. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and...

  • Page 5
    ...amended, or the Securities Act. For this purpose, any statements contained in this annual report regarding our strategy, future plans or operations, financial position, future revenues, projected costs, prospects, and objectives of management, other than statements of historical facts, may be deemed...

  • Page 6
    ... Awards, winners in the Best Motion Picture, Sound Editing, Sound Mixing, Film Editing and Music (Song and Score) categories were all created with a variety of Avid audio and video solutions. As has been the case in the past, our Avid Media Composer system was the common tool of choice for the...

  • Page 7
    ...-friendly video and audio solutions at an affordable price. These solutions are specifically designed for the home desktop or studio and have rich feature sets but minimal learning curves. We sell into this market segment through storefront and on-line retailers, through specialized resellers and...

  • Page 8
    ...direct sales force, system integrators and resellers, as well as via e-commerce. Video-Editing Solutions We offer a wide range of professional digital, nonlinear software and hardware video-editing solutions. Our Media Composer product line is widely used to edit television programs, commercials and...

  • Page 9
    ...2008, we divested our Softimage 3D animation product line, which was reported as part of our Professional Video segment prior to the divestiture. This product line accounted for approximately 1% of our consolidated net revenues in 2008. Support, Professional Services and Training We provide software...

  • Page 10
    ..., editing and mixing; and live performance for a broad range of customers, from consumers to professionals. We sell our Audio solutions through resellers and via e-commerce, and to a lesser extent through our direct sales force. Digital Audio Software and Workstation Solutions Our Pro Tools digital...

  • Page 11
    ... of our digital audio software and workstation solutions include Apple and Steinberg Media Technologies GmbH (a subsidiary of Yamaha Corporation). Other companies that compete with many of our Audio offerings include Loud Technologies, Inc. and Roland Corporation. SALES AND SERVICE CHANNELS We...

  • Page 12
    ... U.S. Patent and Trademark Office. We have also registered or applied to register various trademarks and service marks in the United States and a number of foreign countries, including Avid, Media Composer, NewsCutter, Digidesign, Pro Tools, M-Audio, Sibelius and Pinnacle Systems. As a technology 7

  • Page 13
    ... best-in-class digital media content-creation solutions market-tailored to the unique needs, skills and sophistication levels of our target customer market segments. We are known as a pioneer and innovator of digital media content-creation solutions with research and development, or R&D, centers...

  • Page 14
    ... things, establishing a new management team, developing a new corporate strategy, reorganizing our internal structure, improving operational efficiencies, divesting non-core product lines and reducing the size of our workforce. Although the majority of our transformation activities are complete, the...

  • Page 15
    ... customers, we have seen, and expect to continue to see, an increase in past-due accounts receivable. We may consequently be unable to maintain our historical collection rates, which would negatively affect our revenues, or, in some circumstances, we may have to consider extended or alternative...

  • Page 16
    ... more quickly to new or emerging technologies and changes in market demand, devote more resources to the development, marketing and sale of their products, or price their products more aggressively than we can. Our products may experience quality issues that could negatively impact our customer...

  • Page 17
    ... open source software code that if used in combination with our own software may jeopardize our intellectual property rights. If any third-party technology license expires, is terminated or ceases to be available on commercially reasonable terms, we may be required to expend considerable resources...

  • Page 18
    ... than half of our revenues from customers outside of the United States. Our international sales are, for the most part, transacted through foreign subsidiaries and generally in the currency of the end-user customers. We consequently are exposed to currency exchange risks that may adversely affect...

  • Page 19
    ... products have not differed materially from our management's estimates. To the extent returns exceed estimates, our revenues and operating results may be adversely affected. Our success depends in part on our ability to retain competent and skilled management and technical personnel. As part of our...

  • Page 20
    ... in an office park located in Tewksbury, Massachusetts. Our leases on these buildings expire in June 2010. We also lease office space in Daly City, California, primarily for Audio R&D and sales and marketing activities, and in Mountain View, California, primarily for Consumer Video R&D, sales and...

  • Page 21
    ...of the board of directors of Vocus, Inc., a provider of public relations management software. KIRK E. ARNOLD. Ms. Arnold has served as Executive Vice President of Customer Operations since July 2008. Prior to that, she served as Executive Vice President and General Manager of Professional Video from...

  • Page 22
    ..., Inc., a private software company focused on enterprise resource planning software solutions. From 2004 to 2005, Mr. Sexton was Chief Executive Officer and Chairman of the Board of Axentis, Inc., a privately held provider of enterprise governance, risk and compliance management software. From 2002...

  • Page 23
    ... cash dividends in the foreseeable future. Issuer Purchases of Equity Securities The following table is a summary of our stock repurchases during the quarter ended December 31, 2008: Total Number of Shares Repurchased as Part of the Publicly Announced Program Dollar Value of Shares That May Yet be...

  • Page 24
    ...compares the cumulative stockholder return on our common stock during the period from December 31, 2003 through December 31, 2008 with the cumulative return during the period for: • • the NASDAQ Computer, Data Processing Index, and the NASDAQ Index (all companies traded on NASDAQ Capital, Global...

  • Page 25
    ... 2004 Net revenues Cost of revenues Gross profit Operating expenses: Research and development Marketing and selling General and administrative Amortization of intangible assets Impairment of goodwill and intangible assets Restructuring costs, net In-process research and development Gain on sale of...

  • Page 26
    ... units, Professional Video, Audio and Consumer Video, with each corresponding to a reportable segment. As part of our transformation, we transitioned to a new business unit and reporting model on January 1, 2009. This new model, which includes a single customer-facing organization, better aligns us...

  • Page 27
    ... intangible assets of $11.1 million. See Note G to our Consolidated Financial Statements in Item 8 for further information regarding our 2008 impairment losses. In November 2008, we sold our Softimage 3D animation product line, which was part of our Professional Video segment, to Autodesk, Inc. We...

  • Page 28
    ... and expect the inventory to be sold during the next twelve months. The PCTV product line accounted for approximately $42.4 million of our 2008 revenues. During 2008, we initiated restructuring plans that included reductions in force of approximately 600 positions, including employees related to...

  • Page 29
    ... and Allowances for Product Returns and Exchanges We generally recognize revenues from sales of software and software-related products upon receipt of a signed purchase order or contract and product shipment to distributors or end users, provided that collection is reasonably assured, the fee is...

  • Page 30
    ...related revenues are recorded. Management estimates must be made and used in connection with establishing and maintaining a sales allowance for expected returns and other credits. In making these estimates, we analyze historical returns and credits and the amounts of products held by major resellers...

  • Page 31
    ... (six-month trailing) implied volatility calculations. These calculations are performed on exchange traded options of our common stock. We believe that using a forward-looking market-driven volatility assumption will result in the best estimate of expected volatility. The assumed risk-free interest...

  • Page 32
    ... trends, current budgets, operating plans and industry data. The model also includes assumptions for, among others, working capital cash flow, growth rates, income tax rates, expected tax benefits and long term discount rates, all of which require significant judgments by management. We estimate...

  • Page 33
    ... for, among others, customer retention rates, trademark royalty rates, costs to complete in-process technology and long-term discount rates, all of which require significant judgments by management. Because the book values of the Audio goodwill and Consumer Video goodwill exceeded their implied...

  • Page 34
    ... quoted market prices in active markets and classified as Level 1 are primarily money market securities. Investments valued based on other observable inputs and classified as Level 2 include commercial paper, certificates of deposit, asset-backed obligations, discount notes, and corporate and agency...

  • Page 35
    ... is determined using the unadjusted quoted price from an active market of identical assets. Commercial Paper and Certificates of Deposit: The fair values for our commercial paper holdings and certificates of deposit are derived from a pricing model, using the straight-line amortized cost method, and...

  • Page 36
    ... broadcast deals in 2008. Professional Video services revenues are derived primarily from maintenance contracts, professional and installation services, and training. The increase in services revenues in 2008 was due to increased revenues generated from maintenance contracts sold in connection with...

  • Page 37
    ...caused longer than expected customer transitions to the latest versions of that product, as well as a shift in product mix to a software-only version of our Media Composer product. The decrease in revenues for our broadcast products was related to our transmission server product line. As part of our...

  • Page 38
    ...; customer support costs related to maintenance contract revenues and other services; and royalties for third-party software and hardware included in our products. Cost of revenues also includes amortization of technology, which represents the amortization of developed technology assets acquired as...

  • Page 39
    ... the write-down of inventory related to the discontinuation of a product line. These negative influences on gross margin were partially offset by a shift in product mix to increased revenues from higher margin software products and increased sales volumes. During 2007, a few large Professional Video...

  • Page 40
    ... transferred to cost of product revenues in connection with work performed on complex solution sales. The increase in hardware development and computer equipment costs was primarily the result of expenses for the development of highend video-editing products during 2007. The increase in research and...

  • Page 41
    ...revenues for 2007 was also related to the spending increases noted. General and Administrative General and administrative expenses consist primarily of employee salaries and benefits for administrative, executive, finance and legal personnel; audit, legal and strategic consulting fees; and insurance...

  • Page 42
    ... of certain developed technologies related to our acquisitions of Pinnacle, M-Audio and Medea, as well as lower amortization expenses due to the decrease and resulting write-down of the fair values of Consumer Video trade name and customer relationships intangible assets during 2008. The unamortized...

  • Page 43
    ... in our stock price, increased uncertainty of future revenue levels due to unfavorable macroeconomic conditions and the divestiture of our PCTV product line, our annual testing determined that the carrying values of the Audio and Consumer Video reporting units exceeded their fair values, indicating...

  • Page 44
    ... selling teams and general and administrative teams. During the second quarter of 2008, we recorded restructuring charges of $1.0 million under these plans primarily related to employee termination costs for 26 employees, primarily in the research and development teams and sales and marketing teams...

  • Page 45
    ... of the valuation. For purposes of valuing the in-process R&D of Sibelius and Medea, we used discount rates of 19% and 20%, respectively. Gain on Sale of Assets In the fourth quarter of 2008, we sold our Softimage 3D animation product line, which was part of our Professional Video segment, and our...

  • Page 46
    ...tax charge of $7.9 million related to the utilization of acquired net operating loss carryforwards and other acquired timing differences, partially offset by a $3.4 million deferred tax benefit related to the foreign amortization of non-deductible acquisition-related intangible assets. Our effective...

  • Page 47
    ... the gain on the sale of our Softimage and PCTV product lines, as well as changes in working capital items, in particular decreases in accounts receivable and inventories and an increase in accrued expenses. In 2007, cash provided by operating activities primarily reflected non-cash adjustments to...

  • Page 48
    ...our common stock under a stock repurchase program approved and completed in 2006, partially offset by proceeds of $8.2 million from the issuance of stock related to the exercise of stock options and our employee stock purchase plan. In connection with non-acquisition-related restructuring activities...

  • Page 49
    ... term of the lease, which expires in 2010. All payments related to restructuring actions are expected to be funded through working capital. See Note N to our Consolidated Financial Statements in Item 8 for the activity in the restructuring and other costs accrual for 2008. Our cash requirements vary...

  • Page 50
    ... cases, amounts of unpaid balances. As of December 31, 2008, our maximum exposure under these programs was $4.6 million. We have a stand-by letter of credit at a bank that is used as a security deposit in connection with our Daly City, California office space lease. In the event of a default on this...

  • Page 51
    ..., payables and cash balances, we enter into short-term foreign currency forward contracts. There are two objectives of our foreign currency forward-contract program: (1) to offset any foreign exchange currency risk associated with cash receipts expected to be received from our customers over...

  • Page 52
    ... FINANCIAL INFORMATION AVID TECHNOLOGY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Page CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN ITEM 8: Management's Report on Internal Control Over Financial Reporting Reports of Independent Registered Public Accounting...

  • Page 53
    ... financial officers and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting...

  • Page 54
    ... in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our...

  • Page 55
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the...

  • Page 56
    ... 2008 2007 2006 Net revenues: Products Services Total net revenues Cost of revenues: Products Services Amortization of intangible assets Restructuring costs Total cost of revenues Gross profit Operating expenses: Research and development Marketing and selling General and administrative Amortization...

  • Page 57
    ... Long-term liabilities Total liabilities Commitments and contingencies (Notes H and J) Stockholders' equity: Preferred stock, $0.01 par value, 1,000 shares authorized; no shares issued or outstanding Common stock, $0.01 par value, 100,000 shares authorized; 42,339 shares and 42,339 shares issued...

  • Page 58
    ... Issued Treasury Stock Equity Balances at December 31, 2005 Stock repurchased Stock issued pursuant to employee stock plans Stock-based compensation Tax benefit associated with stock option exercises and forfeitures Issuance (recovery) of common stock in connection with acquisitions Stock recovery...

  • Page 59
    ...from sales of marketable securities Net cash (used in) provided by investing activities Cash flows from financing activities: Payments on capital lease obligations Purchases of common stock for treasury Proceeds from issuance of common stock under employee stock plans, net Tax benefits (deficiencies...

  • Page 60
    .... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. ORGANIZATION AND OPERATIONS Avid Technology, Inc. ("Avid" or the "Company") develops, markets, sells and supports a wide range of software and hardware for digital media content production, management and distribution. Digital media are video, audio or...

  • Page 61
    ... with an original maturity of three months or less to be cash equivalents. Marketable securities consist of certificates of deposit, commercial paper, asset-backed securities, agency bonds and discount notes (see Note C). The Company generally invests in securities that mature within one year from...

  • Page 62
    ... quoted market prices in active markets and classified as Level 1 are primarily money market securities. Investments valued based on other observable inputs and classified as Level 2 include commercial paper, certificates of deposit, asset-backed obligations, discount notes, and corporate and agency...

  • Page 63
    ... primarily of customer relationships, trade names and developed technology, resulted from the Company's acquisitions of the following companies or their assets: Sibelius Software Limited ("Sibelius"), Sundance Digital, Inc. ("Sundance Digital"), Medea Corporation ("Medea"), Pinnacle Systems, Inc...

  • Page 64
    ... Allowance for Doubtful Accounts The Company generally recognizes revenues from sales of software and software-related products upon receipt of a signed purchase order or contract and product shipment to distributors or end users, provided that collection is reasonably assured, the fee is fixed or...

  • Page 65
    ... for services used for revenue recognition purposes to ensure that it reflects the Company's recent pricing experience. In most cases, the products the Company sells do not require significant production, modification or customization of software. Installation of the products is generally routine...

  • Page 66
    ...for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed. Upon general release, these costs are amortized using the straight-line method over the expected life of the related products, generally 12 to 36 months. The straight-line method generally results in approximately the same...

  • Page 67
    ... under SFAS 123(R), the Company generally uses the Black-Scholes option pricing model to estimate the fair value of stock option grants. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. The Company recognizes stock-compensation expense using the...

  • Page 68
    ... the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. The expected stock-price volatility assumption used by the Company is based on recent (six-month trailing) implied volatility calculations. These calculations are performed on exchange-traded...

  • Page 69
    ... Company's consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006, respectively (in thousands): 2008 2007 2006 Cost of products revenues Cost of services revenues Research and development expenses Marketing and selling expenses General and administrative expenses...

  • Page 70
    ...Gains (Losses) Cost 2008 Fair Value Certificates of deposit Commercial paper Asset-backed securities Agency bonds Agency discount notes $ $ 2007 6,255 13,474 2,224 1,000 2,994 25,947 $ $ 8 14 (73 ) - 6 (45 ) $ $ 6,263 13,488 2,151 1,000 3,000 25,902 Corporate obligations Certificates of...

  • Page 71
    ... shipped to customers for which revenues had not yet been recognized. F. PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): Depreciable Life December 31, 2008 December 31, 2007 Computer and video equipment and software Manufacturing tooling and testbeds Office...

  • Page 72
    ... related to the Pinnacle acquisition was $213.8 million, with $82.7 million assigned to the Company's Professional Video segment and $78.1 million assigned to its Consumer Video segment. 2006 Acquisitions In 2006, the Company acquired Sibelius, Sundance Digital and Medea. As of December 31, 2008...

  • Page 73
    ... completes its annual budget for the upcoming year. Due to the significant decline in the Company's stock price, increased uncertainty of future revenue levels due to unfavorable macroeconomic conditions and the divestiture of the PCTV product line, the Company's SFAS No. 142 step one testing in the...

  • Page 74
    ... 2008. Previously, in December 2006, the Company's annual goodwill impairment testing determined that the carrying value of the Consumer Video segment goodwill, which is all the result of the Pinnacle acquisition, exceeded its implied fair value. In connection with the preparation of the 2007 budget...

  • Page 75
    ..., the Company determined that the trade name intangible asset was impaired and recorded an impairment loss of $4.7 million to write this asset down to its current fair value. In connection with the goodwill impairment loss recorded for the Consumer Video reporting unit in 2006, we also reviewed the...

  • Page 76
    ... the Company's adoption of SFAS No. 141 (revised 2007), or SFAS 141(R), Business Combinations, on January 1, 2009, changes in valuation allowances related to acquisitions will affect income tax expense. For 2008 and 2007, there was no impact to goodwill resulting from the utilization of the acquired...

  • Page 77
    ... federal tax rate for the years ended December 31, 2008, 2007 and 2006: 2008 2007 2006 Statutory rate Tax credits Foreign operations State taxes, net of federal benefit Other Goodwill impairment Divestiture of Softimage product line Increase (decrease) in valuation allowance Effective tax rate (35...

  • Page 78
    ... period Increases for tax positions taken during the current period Decreases for tax positions taken during a prior period Decreases related to settlements Unrecognized tax benefits at December 31, 2008 $6,200 400 200 - (2,800 ) $4,000 900 - (1,100 ) (700 ) $3,100 The Company recognizes interest...

  • Page 79
    ... or pricing structures, the Company's ability to sell and service its products may be impaired. The Company procures product components and builds inventory based on forecasts of product life cycle and customer demand. If the Company is unable to provide accurate forecasts or manage inventory levels...

  • Page 80
    ... this insurance coverage, the Company believes the estimated fair value of these indemnification obligations is minimal. The Company provides warranties on externally sourced and internally developed hardware. For internally developed hardware and in cases where the warranty granted to customers for...

  • Page 81
    ... by the Company's board of directors. Common Stock A stock repurchase program was approved by the Company's board of directors in April 2007, which authorized the Company to repurchase up to $100 million of the Company's common stock through transactions on the open market, in block trades or...

  • Page 82
    ... granted under the Existing Plans from and after May 21, 2008. Under the Plan, the Company may grant stock awards or options to purchase the Company's common stock to employees, officers, directors (subject to certain restrictions) and consultants, generally at the market price on the date of grant...

  • Page 83
    ...the Company's Second Amended and Restated 1996 Employee Stock Purchase Plan (as amended, the "ESPP"). The amended plan became effective May 1, 2008, the first day of the next offering period under the plan, and offers shares for purchase at a price equal to 85% of the closing price on the applicable...

  • Page 84
    ... 31, 2008 Expected dividend yield Risk-free interest rate Expected volatility Expected life (in years) Weighted-average fair value of shares issued 0.00% 2.21% 45.1% 0.25 $3.11 At the 2008 Annual Stockholder Meeting held on May 21, 2008, the Company's stockholders authorized an additional 800,000...

  • Page 85
    ... and selling teams and general and administrative teams. During the second quarter of 2008, the Company recorded restructuring charges of $1.0 million under these plans primarily related to employee termination costs for 26 employees, primarily in the research and development teams and sales and...

  • Page 86
    ... in the period when such changes are known. In connection with the 2005 Pinnacle and 2006 Medea acquisitions, the Company recorded accruals of $14.4 million and $1.1 million, respectively, related to severance agreements and lease or other contract terminations in accordance with EITF Issue No. 95...

  • Page 87
    ... and manage media assets throughout a project or organization. Professional Video storage and workflow solutions accounted for approximately 16%, 15% and 14% of the Company's consolidated net revenues in 2008, 2007 and 2006, respectively. The Audio segment hardware and software for digital audio...

  • Page 88
    ... 31, 2008 2007 2006 Revenues: Professional Video Audio Consumer Video Total revenues Contribution Margin: Professional Video Audio Consumer Video Segment contribution margin Less unallocated costs and expenses: Common costs and operating expenses Amortization of acquisition-related intangible...

  • Page 89
    ... into short-term foreign currency forward contracts. There are two objectives of the Company's foreign currency forward contract program: (1) to offset any foreign exchange currency risk associated with cash receipts expected to be received from the Company's customers over the next 30-day period...

  • Page 90
    ...177 3,911 (a) In connection with the acquisition of Softimage Inc. in 1998, the Company issued a ten-year warrant to purchase 1,155,235 shares of the Company's common stock at a price of $47.65 per share. The weighted-average potential common share amount for 2008 reflects expiration of the warrant...

  • Page 91
    ... related to the acquisitions of Sibelius, Sundance Digital and Medea in 2006 and a contingency payment in 2007 related to the 2005 acquisition of Wizoo (in thousands). There were no supplemental cash flow investing activities in 2008. Year Ended December 31, 2007 2006 Fair value of: Assets acquired...

  • Page 92
    ...of large enterprise sales to customers; marketing expenditures; promotional programs; and periodic discounting due to competitive factors. The Company's operating results may fluctuate in the future as a result of these and other factors, including the Company's success in developing and introducing...

  • Page 93
    ... were effective at the reasonable assurance level. Management's report on our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) and the independent registered public accounting firm's related audit report are included in Item 8 of...

  • Page 94
    ..., MA 01876, Attention: Corporate Secretary. Our Code of Business Conduct and Ethics is also available in the Investor Relations section of our website at www.avid.com. The remainder of the response to this item is contained under the caption "Executive Officers of the Registrant" in Part I of...

  • Page 95
    ... financial statements are included in Item 8: Management's Report on Internal Control Over Financial Reporting Reports of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 Consolidated Balance Sheets as...

  • Page 96
    ... the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AVID TECHNOLOGY, INC. (Registrant) By: /s/ Gary G. Greenfield Gary G. Greenfield Chairman of the Board...

  • Page 97
    ... receivable acquired in business combinations. (b) Amount represents write-offs, net of recoveries and foreign exchange gains (losses). (c) Provisions for sales returns and volume rebates are charged directly against revenues. (d) Amount represents credits for returns, volume rebates and promotions...

  • Page 98
    ... Stock Incentive Plan Rules of the Sibelius Software Limited Unapproved Discretionary Share Option Scheme 2000 Rules of the Sibelius Software Limited Enterprise Management Incentive Scheme Form of Incentive Stock Option Agreement under the Registrant's Amended and Restated 2005 Stock Incentive Plan...

  • Page 99
    ...Amended and Restated 2005 Stock Incentive Plan Form of Restricted Stock Unit Agreement for Outside Directors under the Registrant's Amended and Restated 2005 Stock Incentive Plan Form of Stock Option Agreement for UK Employees under the HM Revenue and Customs Approved Sub-Plan for UK Employees under...

  • Page 100
    ... Agreement dated July 15, 2007 between the Registrant and David A. Krall 21 Subsidiaries of the Registrant 23.1 Consent of Ernst & Young LLP 31.1 Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to...

  • Page 101
    ..., Avid, Avid Unity, Avid Unity ISIS, D-Command, D-Control, Deko, Digidesign, Film Composer, iNews, Instinct, Interplay, M-Audio, Media Composer, NewsCutter, Nitris, Pinnacle Studio, Pinnacle Systems, Pro Tools, Pro Tools|HD, Pro Tools LE, Pro Tools M-Powered, Sibelius, Sundance Digital, Symphony...

  • Page 102
    Avid One Park West Tewksbury, MA 01876 USA www.avid.com 1174-AR-09