Adobe 2003 Annual Report Download - page 50

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internally and invested primarily in money market funds for working capital purposes. All investments are made
according to guidelines and within compliance of policies approved by the Board of Directors.
Our existing cash, cash equivalents, and investment balances may decline during fiscal 2004 in the event of
further weakening of the economy or changes in our planned cash outlay. However, based on our current business
plan and revenue prospects, 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 twelve months. Cash from operations could be affected by various risks and uncertainties, including, but not
limited to the risks detailed in the section “Factors That May Affect Future Performance.” Also, while we currently
have no committed lines of credit, we believe that our banking relationships and good credit should afford us the
opportunity to raise sufficient debt in the bank or public market, if required.
Stock Repurchase Program I – On-going Dilution Coverage
To facilitate our stock repurchase program designed to minimize dilution from stock issuance primarily from
employee stock plans, we have historically repurchased shares in the open market, sold put warrants and purchased
call options.
Authorization to repurchase shares to cover on-going dilution is not subject to expiration. However, this
repurchase program is limited to covering net dilution from stock issuances and is subject to business conditions and
cash flow requirements as determined by our Board of Directors from time to time.
In fiscal 2003, we did not sell any put warrants. In fiscal 2002 and 2001, we sold approximately 7.5 million and
5.6 million put warrants, respectively. Each put warrant entitled the holder to sell one share of Adobe’s common
stock to Adobe at a specified price for cash or stock at Adobe’s option. At November 28, 2003, no put warrants were
outstanding.
In fiscal 2003, we did not purchase any call options. In fiscal 2002 and 2001, we purchased call options that
entitled us to buy 4.9 million and 3.9 million shares, respectively, of our common stock on certain dates at specified
prices. At November 28, 2003, no call options were outstanding.
Stock Repurchase Program II – Additional Authorization above Dilution Coverage
In April 1999, the Board authorized a 5.0 million share repurchase program, which allowed us to purchase
shares in the open market and enter into contracts to repurchase shares during future quarters by selling put warrants
and buying call options. This program expired in fiscal 2001.
In March 2001, our Board of Directors authorized a program to purchase up to an additional 5.0 million shares
of our common stock over a two-year period, subject to certain business and cash flow requirements. The program
expired on March 2, 2003.
On September 25, 2002, our Board of Directors authorized a program to purchase up to an additional 5.0
million shares of our common stock over a three-year period, subject to certain business and cash flow requirements.
The authorization for this program will expire in September 2005.