Adobe 2014 Annual Report Download - page 50

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50
Amortization of Purchased Intangibles
During the last several years, we have completed a number of business combinations and asset acquisitions. As a result of
these acquisitions, we purchased intangible assets that are being amortized over their estimated useful lives ranging from one to
fourteen years.
Amortization expense remained stable during fiscal 2014 as compared to fiscal 2013.
Amortization expense increased 7% during fiscal 2013 as compared to fiscal 2012 primarily due to amortization expense
associated with intangible assets purchased through our acquisitions of Behance and Neolane in fiscal 2013.
Non-Operating Income (Expense), Net (dollars in millions)
Fiscal
2014 Fiscal
2013 Fiscal
2012 % Change
2014-2013 % Change
2013-2012
Interest and other income (expense), net..................... $ 7.3 $ 4.9 $ (3.4) 49 % *
Percentage of total revenue....................................... ** ** **
Interest expense........................................................... (59.7) (67.5) (67.5) (12)% —%
Percentage of total revenue....................................... (1)% (2)% (2)%
Investment gains (losses), net ..................................... 1.1 (4.0) 9.5 * *
Percentage of total revenue....................................... ** ** **
Total non-operating income (expense), net................. $ (51.3) $ (66.6) $ (61.4) (23)% 8%
_________________________________________
(*) Percentage is not meaningful.
(**) Percentage is less than 1%.
Interest and Other Income (Expense), Net
Interest and other income (expense), net consists primarily of interest earned on cash, cash equivalents and short-term fixed
income investments. Interest and other income (expense), net also includes gains and losses on fixed income investments and
foreign exchange gains and losses other than any gains recorded to revenue from hedging Euros, British Pounds and Yen currencies.
Interest and other income (expense), net increased in fiscal 2014 as compared to fiscal 2013 primarily due to decreased
foreign currency losses and increased realized gains on fixed income investments. The increases were partially offset by decreased
interest income on our investment in lease receivable due to the purchase of the East and West Towers during fiscal 2014. See
Note 15 of our Notes to Consolidated Financial Statements for further details regarding our investment in lease receivables.
Interest and other income (expense), net increased in fiscal 2013 as compared to fiscal 2012 primarily due to decreased
foreign exchange losses.
Interest Expense
Interest expense primarily represents interest associated with our senior notes and interest rate swaps. Interest on our senior
notes is payable semi-annually, in arrears, on February 1 and August 1. Floating interest payments on the interest rate swaps are
paid monthly. The fixed-rate interest receivable on the swaps is received semi-annually concurrent with the senior notes interest
payments.
Interest expense decreased during fiscal 2014 as compared to fiscal 2013 due to the favorable impact of the interest rate
swaps. See Notes 5 and 13 of our Notes to Consolidated Financial Statements for further details regarding our interest rate swaps.
Interest expense remained relatively stable during fiscal 2013 as compared to fiscal 2012.
Investment Gains (Losses), Net
Investment gains (losses), net consists principally of realized gains or losses from the sale of marketable equity investments,
other-than-temporary declines in the value of marketable and non-marketable equity securities and unrealized holding gains and
losses associated with our deferred compensation plan assets (classified as trading securities) and gains and losses associated with
our direct and indirect investments in privately held companies.