Adobe 2010 Annual Report Download - page 93

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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are acquired individually or with a group of other assets in business combinations and asset acquisitions. These standards
were effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years and was effective for us beginning in the first quarter of fiscal 2010. The adoption of the new standards did
not have a material impact on our consolidated financial position, results of operations or cash flows.
Business Combinations and Non-Controlling Interests
In December 2007, the FASB revised their guidance for business combinations and non-controlling interests. The new
standards change how business acquisitions are accounted for and impact financial statements both on the acquisition date
and in subsequent periods. The changes also impact the accounting and reporting for minority interests, which are
recharacterized as non-controlling interests and classified as a component of equity. The new standards were effective for us
beginning in the first quarter of fiscal 2010 and we applied the revised guidance to any business combination completed in or
after the first quarter of fiscal 2010. The adoption of the new standards did not have a material impact on our consolidated
financial position, results of operations or cash flows.
NOTE 2. ACQUISITIONS
Fiscal 2010 Acquisitions
On October 28, 2010, we completed our acquisition of Day Software Holding AG (“Day”). Under the terms of the
agreement, we completed our public tender offer to acquire all of the publicly held registered shares of Day for 139 Swiss
Francs per share in cash in a transaction valued at approximately $248.3 million on a fully diluted equity-value basis. In order
to hedge the economic exposure related to this acquisition, we entered into a forward contract to purchase 254.7 million
Swiss Francs for $242.5 million U.S. dollars maturing near the expected closing date of the acquisition. Upon maturity of the
forward contract, we recorded a $20.8 million gain to interest and other income (expense), net. This forward contract is
accounted for as a separate transaction apart from the acquisition.
Day is a provider of Web content management solutions that leading global enterprises rely on for Web 2.0 content
application and content infrastructure, based in Basel, Switzerland and Boston, Massachusetts. We believe that our
acquisition of Day will provide comprehensive solutions to create, manage, deliver and optimize content. Following the
closing, we integrated Day as a product line within our Enterprise segment for financial reporting purposes. We have
included the financial results of Day in our Consolidated Financial Statements beginning on the acquisition date.
Under the acquisition method, the total preliminary purchase price was allocated to Day’ s net tangible and intangible
assets based upon their estimated fair values as of October 28, 2010. The excess purchase price over the value of the net
tangible and identifiable intangible assets was recorded as goodwill. Goodwill represents the excess of the purchase price over
the fair value of the underlying acquired net tangible and intangible assets. The factors that contributed to the recognition of
goodwill included securing buyer-specific synergies to increase revenue and profits and are not otherwise available to a
marketplace participant in addition to acquiring a talented workforce.
The total preliminary purchase price for Day was approximately $248.3 million of which approximately $159.9 million
was allocated to goodwill, $79.2 million for substantially all of the identifiable intangible assets, and $6.1 million to net
tangible assets. The impact of this acquisition was not material to our consolidated balance sheets and results of operations.
Subsequent to December 3, 2010, we acquired privately held Demdex, a leading data management platform company.
This acquisition will not have a material impact to our consolidated balance sheets and results of operations.
Fiscal 2009 Acquisitions
On October 23, 2009, we completed the acquisition of Omniture, Inc. (“Omniture”), an industry leader in Web analytics
and online business optimization based in Orem, Utah, for approximately $1.8 billion. Under the terms of the agreement, we
completed our tender offer to acquire all of the outstanding shares of Omniture common stock at a price of $21.50 per share,
net to the seller in cash, without interest. Acquiring Omniture accelerates our strategy of delivering more effective solutions
for creating, delivering, measuring and optimizing Web content and applications. The transaction was accounted for using the
purchase method of accounting. We have included the financial results of Omniture in our Consolidated Financial Statements
beginning on the acquisition date. Following the closing, we disclosed Omniture as a new segment for financial reporting
purposes.