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87
(in thousands)
Net tangible assets
Identifiable intangible assets:
Existing technology
Customer contracts and relationships
Contract backlog
Non-competition agreements
Trademarks
In-process research and development
Goodwill
Restructuring liability
Total purchase price allocation
Amount
$ 33,397
176,200
168,600
44,800
900
41,000
4,600
1,340,021
(11,259)
$ 1,798,259
Weighted
Average
Useful Life
(years)
6
11
2
2
8
N/A
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, $119.2 million
in trade receivables, $40.9 million in property, plant and equipment, $44.8 million in accrued expenses and $109.6 million in net
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 recorded an adjustment to reduce Omniture’s carrying
value of deferred revenue by $40.8 million to $86.3 million, which represents the fair value of the contractual obligations assumed.
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 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 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 as SiteCatalyst, Omniture SearchCenter, Omniture Discover, Omniture Genesis, and
HBX product names. Non-compete agreements include agreements with key Omniture employees that preclude them from
competing against Omniture for a period of two years. With the exception of contract backlog, we amortize the fair value of these
intangible assets on a straight-line basis over their respective estimated useful lives.
In-process research and development—In-process research and development (“IPR&D”) was expensed to amortization of
purchased intangibles and incomplete technology in our Consolidated Statements of Income upon acquisition as it represents
incomplete Omniture research and development projects that had not reached technological feasibility and had no alternative
future use as of the date of the acquisition. Technological feasibility is established when an enterprise has completed all planning,
designing, coding, and testing activities that are necessary to establish that a product can be produced to meet its design specifications
including functions, features, and technical performance requirements. The estimated fair value of $4.6 million was determined
by estimating the net cash flows expected to be generated from the project and discounting the net cash flows to their present
value.
Goodwill—Approximately $1.3 billion has been allocated to 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 that increase revenue and profits and are not otherwise available to a
marketplace participant, acquiring a talented workforce, and cost savings opportunities. The goodwill recorded in connection with
Omniture has been allocated to the Omniture and Creative Solutions reportable segments of $1.1 billion and $0.2 billion,
respectively, based on expected revenue and cost synergies to be gained as a result of the acquisition.
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)