Adobe 2007 Annual Report Download - page 85

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85
Below is a summary of our income tax payable activity for fiscal 2007 and 2006:
2007 2006
Beginning balance................................................ $ 178,368 $ 154,529
Current year liability. ............................................. 96,250 50,804
Macromedia acquisition. .......................................... — 22,972
Payments and reclassifications...................................... (59,560 ) (49,937)
Ending balance................................................... $ 215,058 $ 178,368
Note 9. Restructuring
In the first quarter of fiscal 2006, pursuant to the Board of Directors’ approval, we initiated plans to restructure both the
pre-merger operations of Adobe and Macromedia to eliminate certain duplicative activities, focus our resources on future
growth opportunities and reduce our cost structure. In connection with the worldwide restructuring plan, we recognized costs
related to termination benefits for employee positions that were eliminated and for the closure of duplicative facilities. We
also recognized costs related to the cancellation of certain contracts associated with the wind-down of subsidiaries and other
service contracts held by Macromedia.
Macromedia Merger Restructuring Charges
The following table sets forth a summary of Macromedia restructuring activity, including any costs incurred during
fiscal 2006 and 2007 and the cumulative costs incurred through November 30, 2007 for each major type of cost associated
with the restructuring plan:
2006 Cash Payments Adjustments 2007
Total Costs
Incurred To
Date
Termination benefits ............ $ 1,002 $ (370) $ (632) $ — $ 26,986
Cost of closing redundant facilities. 28,934 (12,052) (599) 16,283 22,961
Cost of contract termination ...... 46 (8) (38) — 3,238
Other......................... 1,444 1 (10) 1,435 1,222
Total ......................... $ 31,426 $ (12,429) $ (1,279) $ 17,718 $ 54,407
Accrued restructuring charges of $17.7 million at November 30, 2007 includes $3.7 million recorded in accrued
restructuring, current and $14.0 million, related to long-term facilities obligations, recorded in accrued restructuring, non-
current in the accompanying consolidated balance sheets. We expect to pay these liabilities through fiscal 2011.
The following table sets forth a summary of Macromedia restructuring activity ending fiscal 2006:
Initial
Restructuring
Charges Cash Payments Adjustments 2006
Termination benefits............. $ 26,608 $ (26,459) $ 853 $ 1,002
Cost of closing redundant facilities . 32,083 (10,547) 7,398 28,934
Cost of contract termination....... 3,969 (3,224) (699 ) 46
Other ......................... 2,500 (1,072) 16 1,444
Total.......................... $ 65,160 $ (41,302) $ 7,568 $ 31,426
We completed our acquisition of Macromedia on December 3, 2005. Pursuant to EITF Issue No. 95-3, “Recognition of
Liabilities in Connection with a Purchase Business Combination,” all restructuring charges related to the Macromedia
acquisition are recognized as a part of the purchase price allocation. See Note 2 for information regarding the Macromedia
acquisition.