Adobe 2006 Annual Report Download - page 83

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83
traded stock options as of December 2, 2005 was used for volatility. The fair value of the unvested
restricted stock of $4.8 million was based on the fair value of the underlying shares on the acquisition date.
The assumptions used to value unvested Macromedia stock options are as follows:
2006
Expected term (in years).................................................... 0.17 – 6.67
Volatility............................................................................ 32.9 – 35.2%
Risk free interest rate ......................................................... 3.97 – 4.48%
Total deferred stock-based compensation, of $122.1 million, is being amortized to expenses over the
remaining vesting periods of the underlying options or restricted stock. See Note 11 for the amortization of
deferred stock-based compensation during fiscal 2006.
Pro Forma Results
The unaudited financial information in the table below summarizes the combined results of operations
of Adobe and Macromedia, on a pro forma basis, as though the companies had been combined as of the
beginning of the period presented. The pro forma financial information is presented for informational
purposes only and is not indicative of the results of operations that would have been achieved if the
acquisition had taken place on December 4, 2004 or of results that may occur in the future. The pro forma
financial information for fiscal 2005 includes the following items:
Fiscal 2005
Amortization of intangible assets .......... $ 204,678
Amortization of deferred stock-based
compensation.........................................
63,686
Restructuring costs ................................ 19,733
Business combination accounting
effect on historical support revenue ...... 39,504
The unaudited pro forma financial information for fiscal 2005 combines the historical results for
Adobe for the year ended December 2, 2005 and the historical results for Macromedia for the year ended
September 30, 2005.
Fiscal 2005
Net revenues........................................ $ 2,353,168
Net income .......................................... 400,853
Basic net income per share .................. 0.68
Shares used in computing basic net
income per share.................................. 592,110
Shares used in computing basic net
income per share.................................. 0.65
Diluted net income per share ............... 619,270
Shares used in computing diluted net
income per share.................................. $ 2,353,168