Adobe 2002 Annual Report Download - page 119

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88
Note 5. Goodwill and Other Intangible Assets
Goodwill and other intangible assets consisted of the following:
November 29,
2002
November 30,
2001
Goodwill..................................................................................................................... $ 100,91
5
$ 53,679
Purchased technology and licensing agreements........................................................ 26,304 16,754
Other intangible assets................................................................................................ 13,978 11,036
141,197 81,469
Less accumulated amortization................................................................................... 41,425 45,067
$ 99,77
2
$ 36,402
Amortization of goodwill and purchased intangibles for fiscal 2002 and 2001 primarily relates to the
acquisitions of Glassbook, Inc. (“Glassbook”) and GoLive Systems, Inc., a Delaware corporation, and GoLive
Systems GmbH and Co. KG, a German limited partnership (together “GoLive”).
As part of the acquisition of Accelio in April 2002, we allocated $75.0 million to goodwill which, in accordance
with SFAS No. 142, will not be amortized. During the fourth quarter of fiscal 2002, we revised our estimate of
certain costs associated with our acquisition of Accelio, resulting in an increase to goodwill of approximately $2.6
million. The adjustment primarily reflected higher than estimated transaction costs and costs related to closing
redundant facilities. The goodwill associated with the acquisitions of Accelio and GoLive will be reviewed for
impairment on an annual basis.
During the fourth quarter of fiscal 2002, we recognized a $6.8 million goodwill impairment charge for the
remaining book value related to the Glassbook acquisition. This impairment charge is presented under amortization
and impairment of goodwill and purchased intangibles on our consolidated statement of income. The impairment
charge was determined based on discounted future cash flows.
As of November 29, 2002, other intangible assets consisted primarily of capitalized localization costs of $10.0
million and other intangible assets of $4.0 million. As of November 30, 2001, intangibles and other assets consisted
primarily of capitalized localization costs of $9.1 million and other intangible assets of $1.9 million. Amortization
expense related to goodwill, purchased technology, capitalized localization, and other intangible assets was $28.8
million, $26.8 million, and $14.0 million in fiscal 2002, 2001, and 2000, respectively.
Note 6. Other Assets
Other assets consisted of the following:
November 29,
2002
November 30,
2001
Investments................................................................................................................. $ 35,61
7
$ 31,703
Security deposits......................................................................................................... 3,186 2,567
Land deposit ............................................................................................................... 3,3233,382
$ 42,12
6
$ 37,652
We own limited partnership interests in Adobe Ventures. The limited partnership investments are accounted for
under the equity method, as contractually the partnerships are controlled by Granite Ventures, an independent
venture capital firm and sole general partner of Adobe Ventures.
In March 1997, as part of our venture investing program, we established an internal limited partnership, Adobe
Incentive Partners, L.P. (“AIP”), which allowed certain of Adobe’s executive officers to participate in cash or stock
distributions from Adobe’s venture investments. In November 2002, the partnership was liquidated. Immediately
prior to the liquidation, assets held by AIP included Adobe’s entire interests in Adobe Ventures L.P. and Adobe
Ventures II, L.P. and certain equity securities of privately-held companies. Adobe was both the general partner and a
limited partner of AIP. Other limited partners were executive officers and former executive officers of Adobe who
were involved in Adobe’s venture investing activities and whose participation was deemed critical to the success of
the program. In fiscal 2002, the participating officers received cash distributions with an aggregate fair value of $0.6
million, including a $0.3 million distribution related to the partnership liquidation. At November 29, 2002, due to