Adobe 2006 Annual Report Download - page 89

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89
Note 6. Other Assets
Other assets consisted of the following as of December 1, 2006 and December 2, 2005:
2006 2005
Investments ..................................... $ 46,273 $ 51,707
Security deposits and other ............. 13,304 7,419
Prepaid land lease............................ 3,263 3,301
Prepaid rent..................................... 2,943 3,801
Unbilled receivables........................ 2,400 —
Total other assets......................... $ 68,183 $ 66,228
Included in investments are our 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. Investments also include our direct investments
which are accounted for under the cost method.
The following table summarizes the net realized gains and losses from our investments for fiscal 2006,
2005, and 2004.
2006 2005 2004
Net losses related to our investments in
Adobe Ventures and cost method
investments...............................................
$ (6,487)
$ (1,021)
$ (81)
Write-downs due to other-than-temporary
declines in value of our marketable equit
y
securities ..................................................
—
(558)
—
Gains from sale of short-term investments... — 104 2,493
Gains (losses) on stock warrants .................. (226) 153 94
Other investment gains................................. 67,962 21 —
Total investment gain (loss) ..................... $ 61,249 $ (1,301) $ 2,506
The increase in our investment gain from fiscal 2005 to fiscal 2006 is due to our sale of our investment
in Atom Entertainment, Inc. during the fourth quarter of fiscal 2006. As a result of the sale, we received
$82.3 million in cash. Our carrying value was $13.2 million at the date of sale.
During fiscal 2004, we restructured the lease for two of our headquarter office buildings. See Note 15
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 1, 2006, the unamortized
portion of the fair value of the residual value guarantee remaining in prepaid rent was $2.8 million.