Adobe 2005 Annual Report Download - page 36

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36
had previously been the target of a criminal anti-piracy enforcement action carried out by the Mexican police
authorities on the basis of a piracy complaint filed by the Defendants based on evidence provided to the Defendants.
CCC alleged in the lawsuit that it had suffered damages to its reputation as a result of the enforcement action. CCC
did not claim economic damages. On November 11, 2002, the trial court judge ruled in favor of the Defendants,
holding that no moral damage occurred. After subsequent appeals which were favorable to the Defendants, a court
of appeals held that the Defendants were liable to CCC for “moral” damages, and the court remanded the case to the
Court of First Instance for a determination of the amount. In December 2005, the Court of First Instance awarded
CCC $90 million in damages. The Defendants are appealing the verdict, as are the plaintiffs who seek additional
damages. If, after all appeals have been exhausted, the existing verdict stands and is enforceable, Adobe would be
responsible for approximately $15 million of the judgment.
From time to time, in addition to those identified above, Adobe is subject to legal proceedings, claims,
investigations and proceedings in the ordinary course of business, including claims of alleged infringement of third-
party patents and other intellectual property rights, commercial, employment and other matters. In accordance with
U.S. generally accepted accounting principles, Adobe makes a provision for a liability when it is both probable that
a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed
at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and
other information and events pertaining to a particular case. Litigation is inherently unpredictable. However, we
believe that we have valid defenses with respect to the legal matters pending against Adobe. It is possible,
nevertheless, that our consolidated financial position, cash flows or results of operations could be affected by the
resolution of one or more of such contingencies.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the quarter ended December 2, 2005.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Our common stock is traded on the Nasdaq National Market under the symbol “ADBE.” On January 27, 2006,
there were 1,758 holders of record of our common stock. Because many of such shares are held by brokers and other
institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by
these record holders. The following table sets forth the high and low sales price per share of our common stock and
the cash dividends paid per share, for the periods indicated. All per share amounts in the following table have been
adjusted to reflect the two-for-one stock split in the form of a stock dividend effected May 23, 2005.
Price Range
High Low
Cash Dividend
Per Share
Fiscal 2005:
First Quarter ....................... $ 32.56 $ 27.40 $ 0.00625
Second Quarter................... 34.48 26.57 —
Third Quarter...................... 32.92 25.80 —
Fourth Quarter.................... 35.68 26.67 —
Fiscal Year ......................... 35.68 25.80 0.00625
Fiscal 2004:
First Quarter ....................... $ 21.50 $ 17.78 $ 0.00625
Second Quarter................... 23.44 17.15 0.00625
Third Quarter...................... 23.68 19.66 0.00625
Fourth Quarter.................... 31.57 23.27 0.00625
Fiscal Year ......................... 31.57 17.15 0.02500