Adobe 2001 Annual Report Download - page 41

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effective for fiscal years beginning after June 15, 2002. We do not expect the adoption of SFAS 143 to have
a material impact on our financial position or results of operations.
In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144 (‘‘SFAS 144’’),
‘‘Accounting for the Impairment or Disposal of Long-Lived Assets.’’ This Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121,
‘‘Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,’’ and
the accounting and reporting provisions of APB No. 30, ‘‘Reporting the Results of Operations for a
Disposal of a Segment of a Business.’’ SFAS 144 is effective for fiscal years beginning after December 15,
2001. We will adopt SFAS 144 beginning in our fiscal year 2003. We do not expect the adoption of
SFAS 144 to have a material impact on our financial position or results of operations.
In November 2001, the Emerging Issues Task Force (‘‘EITF’’) reached a consensus on EITF
No. 01-09, ‘‘Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s
Products.’’ EITF No. 01-09 addresses the accounting for consideration given by a vendor to a customer and
is a codification of EITF No. 00-14, ‘‘Accounting for Certain Sales Incentives,’’ EITF No. 00-22,
‘‘Accounting for ‘‘Points’ and Certain Other Time-Based or Volume-Based Sales Incentives Offers and
Offers for Free Products or Services to be Delivered in the Future’’ and EITF No. 00-25, ‘‘Vendor Income
Statement Characterization of Consideration Paid to a Reseller of the Vendor’s Products.’’ We are
evaluating the impact of EITF No. 01-09 and do not believe the adoption will have a material impact on
our financial statements.
LIQUIDITY AND CAPITAL RESOURCES
2001 Change 2000 Change 1999
Cash, cash equivalents, and short-term investments .... $581.6 (14)% $679.9 36% $498.7
Working capital .............................. $453.7 (19)% $563.3 59% $355.4
Stockholders’ equity ........................... $617.0 (18)% $752.5 47% $512.2
Our cash, cash equivalents, and short-term investments consist principally of money market funds,
municipal bonds, and marketable equity securities. All of our short-term investments are classified as
available-for-sale under the provisions of SFAS 115, ‘‘Accounting for Certain Investments in Debt and
Equity Securities.’’ The securities are carried at fair market value with the unrealized gains and losses, net
of tax, included in accumulated other comprehensive income, which is reflected as a separate component
of stockholders’ equity. Realized gains and losses are recognized when realized on the consolidated
statements of income.
Our cash, cash equivalents, and short-term investments decreased $98.3 million, or 14%, from
December 1, 2000, primarily due to the purchase of treasury stock in the amount of $485.1 million, the
purchase of long-term investments and other assets for $32.0 million, capital expenditures of $46.6 million,
and the payment of dividends totaling $12.0 million. In addition, our short-term investments decreased due
to the writedown of certain short-term marketable equity investments totaling $53.1 million and the sale of
marketable equity investments with a cost basis of $7.8 million.
These decreases were partially offset by cash generated from operations of $418.7 million and
proceeds from the issuance of treasury stock related to the exercise of stock options under our stock option
plans and sale of stock under the Employee Stock Purchase Plan of $87.5 million. Another source of cash
included proceeds from the sale of equity securities of $31.5 million.
Our existing cash, cash equivalent and investment balances may decline further during fiscal 2002,
although we believe that our existing balances together with our anticipated cash flows from operations will
be sufficient to meet our working capital and operating resource expenditure requirements for the next
12 months. If the global economy weakens further, the decline in cash, cash equivalents and investments
balances may be greater than presently anticipated.
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