Adobe 2004 Annual Report Download - page 75

Download and view the complete annual report

Please find page 75 of the 2004 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 108

  • 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

75
with Multiple Deliverables.” SAB 104 also incorporated certain sections of the SEC’s “Revenue
Recognition in Financial Statements — Frequently Asked Questions and Answers” document. While the
wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles
of SAB 101, as they apply to us, remain largely unchanged by the issuance of SAB 104. The adoption of
SAB 104 did not have a material impact on our consolidated financial position, results of operations or cash
flows.
Note 2. Acquisitions
On May 3, 2004, we acquired Q-Link Technologies, Inc (“Q-Link”), a privately held company, for
$15.9 million in cash. Q-Link provides Java-based workflow technology that was integrated with our
Intelligent Documents platform to enable customers to integrate document process management with core
applications. Goodwill has been allocated to our Intelligent Documents segment. Purchased technology is
being amortized to cost of product revenue over its estimated useful life of three years. The consolidated
financial statements include the operating results of Q-Link from the date of purchase. Pro forma results of
operations have not been presented because the effect of this acquisition was not material.
The following table summarizes the purchase price allocation:
Cash and cash equivalents................................................................................. $ 312
Accounts receivable, net.................................................................................... 398
Other current assets ........................................................................................... 18
Purchased technology........................................................................................ 1,380
Goodwill............................................................................................................ 14,316
Other intangible assets....................................................................................... 290
Total assets acquired ..................................................................................... 16,714
Current liabilities............................................................................................... (109)
Liabilities recognized in connection with the business combination................. (748)
Total liabilities assumed................................................................................ (857)
Net assets acquired..................................................................................... $ 15,857
On May 19, 2003, we purchased the technology assets of Syntrillium, a privately held company, for
$16.5 million cash. Syntrillium developed, published and marketed digital audio tools including its
recording application, Cool Edit Pro (renamed Adobe Audition), all of which have been added to our
existing line of professional digital imaging and video products. By adding Adobe Audition and the other
tools to our existing line of products, we have improved the Adobe video workflow and expanded the
products and tools available to videographers, DVD authors and independent filmmakers. In connection
with the purchase, we allocated $13.7 million to goodwill, $2.7 million to purchased technology and $0.1
million to tangible assets. We also accrued $0.1 million in acquisition-related legal and accounting fees.
Goodwill has been allocated to our Digital Imaging and Video segment. Purchased technology is being
amortized to cost of product revenue over its estimated useful life of three years. The consolidated financial
statements include the operating results of the purchased technology assets from the date of purchase. Pro
forma results of operations have not been presented because the effect of this acquisition was not material.