Adobe 2005 Annual Report Download - page 78

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78
Note 6. Other Assets
Other assets consisted of the following as of December 2, 2005 and December 3, 2004:
2005 2004
Investments.................................. $ 51,707 $ 41,382
Security deposits and other.......... 7,419 5,768
Land deposit ................................ 3,301 3,340
Prepaid rent.................................. 3,801 4,838
Total other assets ..................... $ 66,228 $ 55,328
We own limited partnership interests in Adobe Ventures which are consolidated in accordance with
FASB Interpretation No. 46R a revision to FASB Interpretation No. 46, “Consolidation of Variable Interest
Entities.” The partnerships are controlled by Granite Ventures, an independent venture capital firm and sole
general partner of Adobe Ventures.
The following table summarizes the net realized gains and losses from our investments for fiscal 2005,
2004 and 2003.
2005 2004 2003
Net losses related to our investments in
Adobe Ventures and cost method
investments...............................................
$ (1,021)
$ (81)
$ (11,981)
Write-downs due to other-than-temporary
declines in value of our marketable equit
y
securities ..................................................
(558)
—
(3,984)
Gains from sale of short-term investments... 104 2,493 3,090
Gains on stock warrants ............................... 153 94 —
Other investment gains................................. 21 — —
Total investment gain (loss) ..................... $ (1,301) $ 2,506 $ (12,875)
During fiscal 2004, we restructured the lease for two of our headquarter office buildings. See Note 14
for additional information. The lease agreement provides for a residual value guarantee. In accordance with
FIN 45, we recognized the fair value of the residual value guarantee of $5.2 million as a long-term liability
on our balance sheet with the offsetting entry to prepaid rent in other assets. The balance will be amortized
to the income statement over five years, the life of the lease. As of December 2, 2005, the unamortized
portion of the fair value of the residual value guarantee remaining in prepaid rent was $3.8 million.
Note 7. Accrued Expenses
Accrued expenses consisted of the following as of December 2, 2005 and December 3, 2004:
2005 2004
Accrued compensation and benefits ............ $ 112,362 $ 98,108
Sales and marketing allowances .................. 16,306 11,857
Other............................................................ 98,317 92,797
Total accrued expenses ............................ $ 226,985 $ 202,762
Note 8. Income Taxes
Income before income taxes includes income from foreign operations of approximately $348.7 million,
$298.0 million and $197.0 million for fiscal 2005, 2004 and 2003, respectively.