Adobe 2007 Annual Report Download - page 55

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55
General and administrative expenses fluctuated due to the following:
% Change
2007 to 2006
% Change
2006 to 2005
Increased compensation associated with incentive compensation and
stock-based compensation...................................... 8 % 14%
Increased compensation and related benefits associated with headcount
growth...................................................... 3 7
Increased professional fees and contractor fees....................... 2 10
Increased depreciation and amortization............................. 2 5
Increased repairs and maintenance ................................. — 4
Increased provision for bad debt................................... — 1
Various individually insignificant items............................. 2 —
Total change ................................................. 17 % 41%
The increase in compensation for fiscal 2007 relates to higher expense for profit sharing and employee bonuses based on
company performance.
The increase in professional and contractor fees in fiscal 2006 as compared to fiscal 2005 relates primarily to legal fees.
Restructuring and Other Charges
Fiscal
2007
% Change
2007 to 2006
Fiscal
2006
% Change
2006 to 2005
Fiscal
2005
Expenses................................. $0.6 (97)% $ 20.3 * $ —
Percentage of total revenue................ * 1% *
* Percentage is not meaningful.
In the first quarter of fiscal 2006, pursuant to Board of Directors’ approval, we implemented a restructuring plan to
eliminate approximately 313 positions held by Adobe employees worldwide, which impacted all functional areas. The
reduction in force was completed in fiscal 2006. The restructuring plan also includes costs related to the world-wide
consolidation of facilities, the cancellation of certain contracts and the write-off of fixed assets located at facilities that have
been vacated. See Note 9 of our Notes to Consolidated Financial Statements for further information regarding the Adobe
restructuring charges.
Additionally, we have a $17.7 million liability for restructuring as of November 30, 2007 primarily associated with the
Macromedia restructured facilities. We expect to pay this liability through fiscal 2011.
We did not incur any restructuring and other charges in fiscal 2005.
Amortization of Purchased Technology
Fiscal
2007
% Change
2007 to 2006
Fiscal
2006
% Change
2006 to 2005
Fiscal
2005
Expenses................................ $ 72.4 4% $ 69.9 * $ —
Percentage of total revenue ............... 2% 3% *
* Percentage is not meaningful.
As a result of our acquisition of Macromedia, we acquired purchased intangibles which will be amortized over their
estimated useful lives of two to four years. In addition, during fiscal 2007, we completed three acquisitions and acquired
purchased intangibles which will be amortized over their estimated useful lives.
Included in the amortization of purchased intangibles for fiscal 2007, is $1.5 million related to the write-off of in-
process research and development from an acquisition that occurred during the second quarter of fiscal 2007.