Adobe 2012 Annual Report Download - page 55

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes thereto.
In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements, including
statements regarding product plans, future growth and market opportunities which involve risks and uncertainties that could cause
actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences
include, but are not limited to, those discussed in the section titled Risk Factors in Part 1, Item 1A of this report. You should
carefully review the risks described herein and in other documents we file from time to time with the Securities and Exchange
Commission (“SEC”), including our Quarterly Reports on Form 10-Q to be filed in fiscal 2013. When used in this report, the
words “will,” “expects,” “could,” “would,” “may,” “anticipates,” “intends,” “plans,” “believes,” seeks,” “targets,” “estimates,”
“looks for,” “looks to,” “continues” and similar expressions, as well as statements regarding our focus for the future, are generally
intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements which
speak only as of the date of this Annual Report on Form 10-K. We undertake no obligation to publicly release any revisions to the
forward-looking statements or reflect events or circumstances after the date of this document.
BUSINESS OVERVIEW
Founded in 1982, Adobe Systems Incorporated is one of the largest and most diversified software companies in the world.
We offer a line of software and services used by creative professionals, marketers, knowledge workers, application developers,
enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and
experiences across multiple operating systems, devices and media. We market and license our software directly to enterprise
customers through our sales force and to end users through app stores and our own website at www.adobe.com. We also distribute
our products through a network of distributors, value-added resellers (“VARs”), systems integrators, independent software vendors
(“ISVs”), retailers and original equipment manufacturers (“OEMs”). In addition, we license our technology to hardware
manufacturers, software developers and service providers for use in their products and solutions. We offer some of our products
via a Software-as-a-Service (“SaaS”) model (also known as a hosted or “cloud-based” model) as well as through term subscription
and pay-per-use models. Our software runs on personal computers (“PCs”) and server-based computers, as well as on smartphones,
tablets and other devices, depending on the product. We have operations in the Americas, Europe, Middle East and Africa (“EMEA”)
and Asia-Pacific (“APAC”).
ACQUISITIONS
On January 13, 2012, we completed the acquisition of privately held Efficient Frontier, a multi-channel digital ad buying
and optimization company. During the first quarter of fiscal 2012, we began integrating Efficient Frontier into our Digital Marketing
segment, however, the impact of this acquisition was not material to our consolidated balance sheets and results of operations.
During fiscal 2011, we completed six business combinations and two asset acquisitions with aggregate purchase prices
totaling approximately $328.3 million. We have included the financial results of the business combinations in our consolidated
results of operations beginning on the respective acquisition dates, however, the impact of these acquisitions was not material to
our consolidated balance sheets and results of operations.
On October 28, 2010, we completed the acquisition of Day, a provider of Web Experience Management (“WEM”), digital
asset management and social collaboration solutions based in Basel, Switzerland and Boston, Massachusetts for approximately
$248.3 million. We have included the financial results of Day in our consolidated results of operations beginning on the acquisition
date, however, the impact of this acquisition was not material to our consolidated balance sheets and results of operations in fiscal
2010. Following the closing, we integrated Day as a product line within our Digital Marketing segment for financial reporting
purposes.
See Note 2 of our Notes to Consolidated Financial Statements for further information regarding these acquisitions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing our consolidated financial statements in accordance with GAAP and pursuant to the rules and regulations of
the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses,
and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical
experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially
from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and
estimates. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.
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