Adobe 2002 Annual Report Download - page 135

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104
The following table depicts the activity for the fiscal year ended November 29, 2002 and November 30, 2001.
Gain (loss) on Hedges of Forecasted Transactions:
Balance Sheet Income Statement
As of Year ended Year ended
November 29, 2002 November 29, 2002 November 30, 2001
Other
Comprehensive
Income (Loss) Revenue
Other
Income
(Loss) Revenue
Other
Income
(Loss)
Realized – Closed Transactions:
Realized net gain (loss) reclassified from
other comprehensive income (loss) to
revenue ……………………………… $
$ (463) $
$7,84
8
$
Realized net loss from the cost of
purchased options and gains or losses
from any ineffective portion of hedges
(5,251)
(4,78
6
)
Recognized but Unrealized – Open
Transactions:
Unrealized net loss remaining in other
comprehensive income (loss)………... (75
9
)
Unrealized net loss from time value
degradation and any ineffective
portion of hedges……………………..
(2
9
)
(73
0
)
$(75
9
) $ (463) $ (5,28
0
) $ 7,84
8
$ (5,51
6
)
As of November 29, 2002, $0.8 million in other comprehensive income (loss) represents the total intrinsic
value loss of our outstanding economic hedges on forecasted revenue.
During the fiscal year ended November 29, 2002, a $0.5 million loss was recognized in revenue relating to
hedged transactions that occurred. The total loss recognized in other income (loss) was $5.3 million, which consisted
of a $5.3 million realized net loss relating to the cost of purchased options and the gains or losses realized on any
ineffective portion of hedges of forecasted transactions. Additionally, we recognized a $0.03 million unrealized net
loss for the ineffective portion of hedges of forecasted transactions, the majority of which was related to the time
value degradation of outstanding purchased options at November 29, 2002.
During the fiscal year ended November 30, 2001, $7.8 million was recognized in revenue relating to hedged
transactions that occurred. The total loss recognized in other income (loss) was $5.5 million, which consisted of a
$4.8 million realized net loss relating to the cost of purchased options and the gains or losses realized on any
ineffective portion of hedges of forecasted transactions. Additionally, we recognized a $0.7 million unrealized net
loss for the ineffective portion of hedges of forecasted transactions, the majority of which was related to the time
value degradation of outstanding purchased options at November 30, 2001.
Balance Sheet Hedging - Hedging of Foreign Currency Assets and Liabilities
We hedge certain recognized foreign currency assets and liabilities with forward foreign exchange contracts to
reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange
rates. These derivative instruments hedge assets and liabilities that are denominated in foreign currencies and are
carried at fair value with changes in the fair value recorded as other income (loss). These derivative instruments do
not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these
derivatives offset gains and losses on the assets and liabilities being hedged. At November 29, 2002, the outstanding
balance sheet hedging derivatives had maturities of 90 days or less.