Adobe 2003 Annual Report Download - page 38

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38
General and Administrative
Year Ended
November 28, 2003
% Change
2002 to 2003
Year Ended
November 29, 2002
% Change
2001 to 2002
Year Ended
November 30, 2001
Expenses..................................... 122.4 13% $ 108.1 (7)% $ 115.6
Percentage of total revenues ... 9% 9% 9%
General and administrative expenses consist principally of salary and benefit expenses, directors and officers’
insurance, travel expenses, and related facilities costs for our finance, human resources, legal, information services
and executive personnel. General and administrative expenses also include outside legal and accounting fees,
provision for bad debts, and expenses associated with computer equipment and software used in the administration
of the business.
General and administrative expenses increased in fiscal 2003 as compared to fiscal 2002. Of the 13% overall
increase in general and administrative expenses, 12 percentage points of the increase were due to compensation and
related benefits associated with headcount growth and higher incentive compensation and 4 percentage points were
due to increased insurance costs. These increases were slightly offset by 3 percentage points due to a decrease in
depreciation related to assets that were written off in the prior fiscal year.
General and administrative expenses decreased in fiscal 2002 compared to fiscal 2001. Of the 7% overall
decrease, 3 percentage points were due to a decrease in contractor and professional fees, 3 percentage points were
due to a decrease in facility expenses as a result of lower rent expenses, and 3 percentage points were due to a
decrease in compensation and related benefits due to reduced headcount. These decreases were partially offset by 2
percentage points due to an increase in depreciation expenses.
Restructuring and Other Charges
Year Ended
November 28, 2003
% Change
2002 to 2003
Year Ended
November 29, 2002
% Change
2001 to 2002
Year Ended
November 30, 2001
Expenses..................................... $ (0.5) *% $ 12.1 1% $ 12.1
Percentage of total revenues ... ― 1% 1%
* Percentage is not meaningful.
During fiscal 2003, we revised our estimates of certain costs associated with our restructuring program that was
implemented in the fourth quarter of fiscal 2002. As a result, during the third and fourth quarters of fiscal 2003, we
reversed the excess accrual related to severance and other charges and facilities.
In the fourth quarter of fiscal 2002, we incurred a restructuring charge of $11.1 million, which included
severance and related charges and the closure of a facility. The related restructuring program eliminated 239
engineering, sales and marketing, and general and administrative positions worldwide in order to realign our
resources for our future business plans. This restructuring plan was completed during the fourth quarter of fiscal
2003.
Also, in the second quarter of fiscal 2002, we implemented a restructuring plan to eliminate 39 redundant sales
and marketing positions, held by Adobe employees worldwide, as a result of the acquisition of Accelio. The total
restructuring charges, of $1.6 million, included severance and related charges associated with the reduction in force
and the cost of vacating a leased facility. This restructuring plan was completed during the second quarter of fiscal
2003.
In the fourth quarter of fiscal 2001, we implemented a restructuring plan to realign our workforce to our future
strategic goals and to align our resources with our lower fiscal 2002 revenue targets due to adverse economic
conditions resulting in part from the events of September 11, 2001. This restructuring also enabled us to increase our
investment in digital imaging, digital video and ePaper-based businesses in fiscal 2002. The restructuring charge in
the fourth quarter of fiscal 2001 was $12.1 million, all of which related to severance and related charges associated
with the reduction in force. During fiscal 2002, we lowered our estimate of the total costs associated with this