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27
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion (presented in millions, except per share amounts) should be read in conjunction with
the consolidated financial statements and notes thereto.
In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements
including, but not limited to, those related to product and marketing plans, that involve risks and uncertainties that
could cause actual results to differ materially. Factors that might cause or contribute to such differences include,
but are not limited to, those discussed in the section entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations - Factors That May Affect Our Future Performance.” You should carefully
review the risks described in other documents we file from time to time with the Securities and Exchange
Commission, including the Quarterly Reports on Form 10-Q to be filed in 2003. When used in this report, the words
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “looks for,” “looks to,”
and similar expressions, as well as statements regarding Adobe’s focus for the future, are generally intended to
identify forward-looking statements. You should not place undue reliance on these forward-looking statements,
which speak only as of the date of this Annual Report on Form 10-K. We undertake no obligation to publicly release
any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
RESULTS OF OPERATIONS
Overview
Founded in 1982, Adobe Systems Incorporated (“Adobe” or the “Company”) offers a line of software for
consumers, businesses, and creative professional customers. Our products enable customers to create, manage and
deliver visually rich, compelling and reliable content. We license our technology to hardware manufacturers,
software developers, and service providers, and we offer integrated software solutions to businesses of all sizes. We
distribute our products through a network of distributors and dealers, value-added resellers (“VARs”), systems
integrators, and original equipment manufacturers (“OEMs”); direct to end users; and through our own website at
www.adobe.com. We have operations in the Americas; Europe, Middle East, and Africa (“EMEA”); and Asia. Our
software runs on Microsoft Windows, Apple Macintosh, Linux, UNIX, Palm OS, Pocket PC, and
Symbian platforms.
Revenue
2002 Change 2001 Change 2000
Revenue
Products.......................................... $ 1,153.2 (6)% $ 1,229.7 (3)% $ 1,266.4
Services and support ....................... 11.6 100
—
—
—
$ 1,164.8 (5)% $ 1,229.7 (3)% $ 1,266.4
We have four reportable segments that offer different product lines: Graphics, Cross-media Publishing, ePaper
Solutions, and OEM PostScript and Other. The Graphics segment provides users with software for creating, editing
and enhancing digital images and photographs, digital video, animations, graphics, and illustrations. The Cross-
media Publishing segment provides software for professional page layout, professional Web page layout, technical
document publishing, and business publishing. The ePaper Solutions segment provides electronic document
distribution software that allows users to create, enhance, annotate, and securely send Adobe PDF files that can be
shared, viewed, navigated, and printed exactly as intended on a broad range of hardware and software platforms. In
addition, our recently-acquired Accelio business focusing on electronic forms is included in our ePaper segment.
The OEM PostScript and Other segment includes printing technology to create and print simple or visually rich
documents with precision.
Revenue from our Graphics segment is derived primarily from the licensing of the following application
products: Photoshop, Illustrator, Adobe Premiere, Photoshop Elements, After Effects, Adobe Graphics Server
(formerly called Adobe AlterCast), Digital Video Collection, Adobe PhotoDeluxe, Atmosphere, and LiveMotion.
Cross-media Publishing includes the following application products: Web Collection, GoLive, Design Collection,
Adobe Publishing Collection, PageMaker, FrameMaker, Adobe Type products, InDesign, Adobe Creative Suites,