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85
The following table depicts the activity for the liabilities recognized in connection with the acquisition of
Accelio through November 29, 2002:
Initial liability
recognized at
April 12, 2002
Cash
Payments Adjustments
Balance at
November 29,
2002
Severance and related charges ........... $ 6,03
4
$ (4,973) $ (41
4
)$ 64
7
Transaction costs ............................... 3,095 (3,53
7
)1,06
9
62
7
Cost of closing redundant facilities ... 2,845 (62
0
)2,21
7
4,44
2
Contract termination costs ................. 1,41
2
(1,05
7
)(28
8
)6
7
Other exit costs .................................. 1,11
6
(471) (25
0
)395
$ 14,50
2
$(10,65
8
) $ 2,33
4
$6,178
The following pro forma results of operations reflect the combined results of Adobe and Accelio for years
ended November 29, 2002 and November 30, 2001, as if the business combination occurred as of the beginning of
each respective fiscal year. The information used for Accelio’s fiscal year 2002 pro forma disclosure was obtained
from reports filed by Accelio with the Securities and Exchange Commission (“SEC”) for the period ended January
31, 2002 and internal financial reports prepared by Accelio from January 31, 2002 through the date of acquisition,
April 12, 2002. The information used for Accelio’s fiscal year 2001 pro forma disclosure was obtained from reports
filed by Accelio with the SEC for the periods ended January 31, 2001, April 30, 2001, July 31, 2001, and October
31, 2001. Accelio’s fiscal quarters did not coincide with Adobe’s fiscal quarters. Nonetheless, we combined the
results of operations from Accelio’s fiscal quarters that are closest to Adobe’s fiscal quarters to arrive at the pro
forma amounts disclosed below.
Years Ended
November 29,
2002
November 30,
2001
Revenue............................................................................... $ 1,189,60
4
$ 1,309,643
Net income ......................................................................... $ 178,665 $ 172,942
Basic net income per share .................................................. $ .75 $ .72
Shares used in computing basic net income per share......... 237,492 240,276
Diluted net income per share............................................... $ .73 $ .69
Shares used in computing diluted net income per share...... 243,777 250,960
In December 2001, we acquired Fotiva, Inc. (“Fotiva”). The acquisition was accounted for using the purchase
method of accounting in accordance with Statement of Financial Accounting Standards No. 141 ("SFAS No. 141"),
"Business Combinations." Substantially all of Fotiva’s assets were intellectual property. Fotiva was a development
stage software company that created solutions to help consumers manage, store, enrich, and share digital
photographs and other related personal media. In connection with the acquisition, substantially all of the purchase
price of $5.4 million cash was allocated to in-process research and development and expensed at the time of
acquisition due to the in-process state of the technology. At the date we acquired Fotiva, it was estimated that 50%
of the development effort had been completed and that the remaining 50% of the development effort would take
approximately eleven months to complete. The efforts required to complete the development of the technology
primarily include finalization of coding, localization, and extensive quality assurance testing. Adobe combined
Fotiva's image management technology with Adobe's digital imaging and ePaper technologies to develop a new
product, Adobe Photoshop Album, that was released in the first quarter of fiscal 2003.
During the fourth quarter of fiscal 2000, we acquired Boston, Massachusetts-based Glassbook, Inc.
(“Glassbook”). Glassbook was a developer of consumer and commercial software for the eBook market, automating
the supply chain for publishers, booksellers, distributors, and libraries. The acquisition was accounted for using the
purchase method of accounting in accordance with Accounting Principles Board Opinion No. 16 (“APB No. 16”),
“Business Combinations.” The purchase price of the acquisition was approximately $24.4 million cash plus