Adobe 2006 Annual Report Download - page 53

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53
Amortization of Purchased Technology
Fiscal
2006
% Change
2006 to 2005
Fiscal
2005
% Change
2005 to 2004 Fiscal
2004
Expenses.................................... $ 69.9 —% $ — *% $ —
Percentage of total revenues .. 3% — —
As a result of acquiring Macromedia, we acquired purchased intangibles which will be amortized over their
estimated useful lives of two to four years. See Note 2 of Notes to Consolidated Financial Statements for further
information regarding these purchased intangibles.
Non-operating Income
Fiscal
2006
% Change
2006 to 2005
Fiscal
2005
% Change
2005 to 2004 Fiscal
2004
Investment gain (loss) ............... $ 61.2 *% $ (1.3) *% $ 2.5
Percentage of total revenues .. 2% *% *%
Interest and other income .......... 67.2 74% 38.6 *% 14.3
Percentage of total revenues .. 3% 2% 1%
Total non-operating income... $ 128.4 244% $ 37.3 *% $ 16.8
* Percentage is not meaningful.
Investment Gain (Loss)
Investment gain (loss) consists principally of realized gains or losses from the sale of marketable equity
investments, other-than-temporary declines in the value of marketable and non-marketable equity securities, gains
and losses of Adobe Ventures, and other direct investments.
2006 2005 2004
Net losses related to our investments in Adobe
Ventures and cost method investments.....
$ (6.5)
$ (1.0)
$ (0.1)
Write-downs due to other-than-temporary
declines in value of our marketable equity
securities ..................................................
—
(0.6)
—
Gains from sale of short-term investments ... — 0.1 2.5
Gains from sale of equity investments.......... 67.9 — —
Gains (losses) on stock warrants................... (0.2) 0.2 0.1
Total investment gain (loss)...................... $ 61.2 $ (1.3) $ 2.5
The increase in our investment gain from fiscal 2005 to fiscal 2006 is primarily due to the sale of our
investment in Atom Entertainment, Inc. during the fourth quarter of fiscal 2006. We are uncertain of future
investment gains or losses as they are primarily dependent upon market conditions and the operations of the
underlying investee companies.
Interest and Other Income
The largest component of interest and other income is interest earned on cash, cash equivalents and
short-term fixed income investments, but also includes gains and losses on the sale of fixed income investments,
foreign exchange transactions including hedging gains and losses, and interest expense.
Interest and other income increased during fiscal 2006 compared to fiscal 2005 due to higher levels of cash
and short term investments and higher rates of return during fiscal 2006. These gains were partially offset by
increased costs of our foreign currency hedging program.