Adobe 2000 Annual Report Download - page 44

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Liquidity and Capital Resources
2000 CHANGE 1999 CHANGE 1998
Cash, cash equivalents, and
short-term investments $ 679.9 36% $ 498.7 83% $ 272.5
Working capital $ 563.3 59% $ 355.4 73% $ 205.0
Stockholders’ equity $ 752.5 47% $ 512.2 (1)% $ 516.4
Our cash, cash equivalents, and short-term investments consist principally of money
market mutual funds, municipal bonds, United States government agency securities, and
marketable equity securities. All of our cash equivalents and 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 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.
Our cash, cash equivalents, and short-term investments increased $181.1 million, or
36%, in fiscal 2000, primarily due to cash generated from operations of $444.6 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 $119.1 million. Other sources of cash include the proceeds from the sale of equity
securities and the sale of a building in the amounts of $17.8 million and $5.4 million,
respectively. In addition, short-term investments increased due to a reclassification of
$73.3 million of investments previously classified as long-term to short-term.
These increases were partially offset by the purchase of treasury stock in the amount of
$255.5 million, the purchase of long-term investments and other assets for $59.1 million,
the purchase of Glassbook for $24.4 million, capital expenditures of $29.8 million, and
the payment of dividends totaling $12.0 million. In addition, our short-term investments
decreased as a result of mark-to-market adjustments totaling $74.2 million, the write-down
of certain short-term marketable equity investments totaling $18.4 million, and the sale of
marketable equity investments with a cost basis of $5.1 million.
We expect to continue our investing activities, including expenditures for computer
systems for research and development, sales and marketing, product support, and
administrative staff. Furthermore, cash reserves may be used to purchase treasury stock
and acquire software companies, products, or technologies that are complementary to
our business.
Under our existing plan to repurchase shares to offset issuances under employee stock
plans, we repurchased approximately 7.2 million, 22.4 million, and 1.4 million shares in
fiscal 2000, 1999, and 1998, respectively, at a cost of $255.5 million, $448.7 million, and
$16.8 million, respectively.
In April 1999, Adobe’s Board of Directors authorized, subject to certain business and
market conditions, the purchase of up to an additional 5.0 million shares of our common
stock over a two-year period. This new stock repurchase program was in addition to an
existing program whereby we have been authorized to repurchase shares to offset
issuances under employee stock option and stock purchase plans. No purchases have been
made under the 5.0 million share repurchase program.
In September 1997, Adobe’s Board of Directors authorized, subject to certain business and
market conditions, the purchase of up to 60.0 million shares of our common stock over a
two-year period. This program was completed in the first quarter of fiscal 1999. Under
this program, we repurchased approximately 3.3 million shares in fiscal 1999, 40.7 million
shares in fiscal 1998, and 16.0 million shares in fiscal 1997, at a cost of $30.5 million,
$362.4 million, and $188.6 million, respectively.
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