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80
NOTE 7. GOODWILL AND PURCHASED AND OTHER INTANGIBLES
During fiscal 2013, 2012 and 2011, we modified our segments due to changes in how we operate our business. See Note
18 for further information regarding our segment changes. Prior year information in the tables below has been reclassified to
reflect these changes.
Goodwill by reportable segment and activity for the years ended November 29, 2013 and November 30, 2012 was as follows
(in thousands):
2011 Acquisitions Other(1) 2012 Acquisitions Other(1) 2013
Digital Media $1,958,941 $ — $ (611) $1,958,330 $ 91,355 $ 41 $2,049,726
Digital Marketing 1,631,725 291,422 (6,679) 1,916,468 526,739 20,621 2,463,828
Print and Publishing 258,551 — (90) 258,461 — (34) 258,427
Goodwill $3,849,217 $ 291,422 $ (7,380) $4,133,259 $ 618,094 $ 20,628 $4,771,981
_________________________________________
(1) Amounts primarily consist of foreign currency translation adjustments.
Purchased and other intangible assets, net by reportable segment as of November 29, 2013 and November 30, 2012 were
as follows (in thousands):
2013 2012
Digital Media $ 170,213 $ 148,215
Digital Marketing 433,245 396,786
Print and Publishing 1,796 35
Purchased and other intangible assets, net $ 605,254 $ 545,036
Purchased and other intangible assets subject to amortization as of November 29, 2013 and November 30, 2012 were as
follows (in thousands):
2013 2012
Cost Accumulated
Amortization Net Cost Accumulated
Amortization Net
Purchased technology $ 423,237 $ (220,414) $ 202,823 $ 366,574 $ (161,538) $ 205,036
Customer contracts and relationships $ 389,800 $ (111,416) $ 278,384 $ 318,027 $ (74,214) $ 243,813
Trademarks 67,546 (27,933) 39,613 53,293 (19,171) 34,122
Acquired rights to use technology 155,322 (76,740) 78,582 104,402 (56,782) 47,620
Localization 3,404 (2,172) 1,232 8,586 (4,654) 3,932
Other intangibles 16,447 (11,827) 4,620 18,742 (8,229) 10,513
Total other intangible assets $ 632,519 $ (230,088) $ 402,431 $ 503,050 $ (163,050) $ 340,000
Purchased and other intangible
assets, net $ 1,055,756 $ (450,502) $ 605,254 $ 869,624 $ (324,588) $ 545,036
In the first quarter of fiscal 2013, we acquired rights to use certain technology for approximately $51.8 million. Of this
cost, an estimated $25.3 million was related to future licensing rights and has been capitalized and will be amortized on a straight-
line basis over the estimated useful lives ranging from five to ten years. We estimated that the remaining cost of approximately
$26.5 million was related to historical use of licensing rights and was expensed as cost of product revenue.
Purchased intangibles associated with certain of our prior year acquisitions became fully amortized and were removed from
the balance sheet in the first quarter of fiscal 2013. Excluding the expense associated with historical use of the acquired rights to
use the technology discussed in the paragraph above, amortization expense related to purchased and other intangible assets was
$156.9 million, $146.2 million and $131.5 million for fiscal 2013, 2012 and 2011, respectively. Of these amounts, for fiscal 2013,
2012 and 2011, $111.0 million, $98.3 million and $88.3 million, respectively, were included in cost of sales.
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)