Adobe 2003 Annual Report Download - page 57

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57
Our swaps mature at various dates through the third quarter of fiscal 2004, consistent with the expiration of the
underlying lease obligations. The total amount of lease obligations subject to interest rate risk is $245.5 million. We
have hedged $121.8 million using interest rate swaps.
A sensitivity analysis was performed on our interest rate hedges as of November 28, 2003. This sensitivity
analysis was based on a modeling technique that measures the hypothetical market value changes that would result
from a parallel shift in the yield curve of minus 50, 100, or 150 basis points over a six-month time horizon. The
following table represents the potential decrease to the value of our interest rate hedges given a negative shift in the
yield curve used in our sensitivity analysis.
0.5% 1.0% 1.5%
6 month horizon ............................. $ (0.1) $ (0.2) $ (0.2)
See also Note 15 in our Notes to Consolidated Financial Statements.
Privately Held Investments
We have direct investments, as well as indirect investments through Adobe Ventures, in several privately held
companies, many of which can still be considered in the start-up or development stages. These investments are
inherently risky, as the technologies or products these companies have under development are typically in the early
stages and may never materialize, and we could lose a substantial part of our initial investment in these companies.
It is our policy to review privately-held investments on a regular basis to evaluate the carrying amount and
economic viability of these companies. This policy includes, but is not limited to, reviewing each of the companies’
cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes
and competition. The evaluation process is based on information that we request from these privately-held
companies. This information is not subject to the same disclosure regulations as U.S. publicly traded companies, and
as such, the basis for these evaluations is subject to the timing and the accuracy of the data received from these
companies.
See also Note 1 in our Notes to Consolidated Financial Statements.