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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
87
Direct transaction costs of approximately $14.0 million include estimated investment banking, legal and accounting
fees, and other external costs directly related to the acquisition. As of November 27, 2009, substantially all costs for
accounting, legal, and other professional services have been paid.
Preliminary Purchase Price Allocation
Under the purchase accounting method, the total preliminary purchase price was allocated to Omniture’s net tangible
and intangible assets based upon their estimated fair values as of October 23, 2009. The excess purchase price over the value
of the net tangible and identifiable intangible assets was recorded as goodwill.
The table below represents the allocation of the preliminary purchase price to the acquired net assets of Omniture based
on their estimated fair values as of October 23, 2009 and the associated estimated useful lives at that date. The preliminary
allocation of the purchase price was based upon a preliminary valuation and our estimates and assumptions are subject to
change within the purchase price allocation period as valuations are finalized.
(in thousands)
Amount
Weighted
Average
Useful Life
(years)
Net tangible assets ..........................................................
$
31,138
N/A
Identifiable intangible assets:
Existing technology .......................................................
176,100
6
Customer contracts and relationships ........................................
167,900
11
Contract backlog .........................................................
52,100
2
Non-competition agreements ...............................................
900
2
Trademarks .............................................................
41,000
8
In-process research and development ........................................
4,600
N/A
Goodwill .................................................................
1,334,980
N/A
Restructuring liability .......................................................
(10,860
)
N/A
Total estimated purchase price allocation .....................................
$
1,797,858
Net tangible assets—Omniture’s tangible assets and liabilities as of October 23, 2009 were reviewed and adjusted to their
fair value as necessary. Among the net tangible assets assumed were $137.4 million in cash and cash equivalents, $119.1
million in trade receivables, $40.9 million in property, plant and equipment, $46.0 million in accrued expenses and $110.9
million in deferred tax liabilities.
Deferred revenue—Included in net tangible assets is Omniture’s deferred revenue which represents advance payments
from customers related to subscription contracts and professional services. We estimated our obligation related to the
deferred revenue using the cost build-up approach. The cost build-up approach determines fair value by estimating the costs
relating to supporting the obligation plus an assumed profit. The sum of the costs and assumed profit approximates, in theory,
the amount that we would be required to pay a third party to assume the obligation. The estimated costs to fulfill the
obligation were based on the near-term projected cost structure for subscription and professional services. As a result, we
recorded an adjustment to reduce Omniture’s carrying value of deferred revenue by $39.7 million to $87.4 million, which
represents our estimate of the fair value of the contractual obligations assumed based on a preliminary valuation.
Identifiable intangible assets—Existing technology acquired primarily consists of Omniture’s SiteCatalyst Web
analytics, Omniture Test & Target, and HBX subscription service offerings and also consists of Omniture SiteSearch,
Omniture Merchandising and Omniture Insight products and subscription services. The preliminary estimated fair value of
the existing technology was determined based on the present value of the expected cash flows to be generated by each
existing technology. Customer relationships consist of Omniture’s contractual relationships and customer loyalty related to
their enterprise and mid-market customers as well as partner customers that resell Omniture’s services to end users. Contract
backlog relates to subscription contracts and professional services. We will amortize the fair value of the contract backlog
based on the pattern in which the economic benefits will be consumed. Trademarks include the Omniture trade name as well