Adobe 2006 Annual Report Download - page 38

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personnel. Experienced personnel in the information technology industry are in high demand and competition for
their talents is intense, especially in the Silicon Valley, where the majority of our employees are located. We have
relied on our ability to grant equity compensation as one mechanism for recruiting and retaining such highly
skilled personnel. Recently enacted accounting regulations requiring the expensing of equity compensation may
impair our ability to provide these incentives without incurring significant compensation costs. If we are unable to
continue to successfully attract and retain key personnel, our business may be harmed.
We may suffer losses from our equity investments which could harm our business.
We hold equity investments in public companies that have experienced significant declines in market value.
We also have investments and plan to continue to make future investments in privately held companies, many of
which are considered in the start-up or development stages. These investments are inherently risky, as the market
for the technologies or products these companies have under development is typically in the early stages and may
never materialize. Our investment activities can impact our net income. Future price fluctuations in these
securities and any significant long-term declines in value of any of our investments could reduce our net income
in future periods.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The following table sets forth the location, approximate square footage and use of each of the principal
properties used by Adobe during fiscal 2006. We lease or sublease all of these properties with the exception of
our property in India, where we own the building and lease the land, and San Francisco where we own the
building and land. All properties are leased under operating leases. Such leases expire at various times through
2025, with the exception of the land lease that expires in 2091. The annual base rent expense (including operating
expenses, property taxes and assessments, as applicable) for all facilities is currently approximately $69.1 million
and is subject to annual adjustments as well as changes in interest rates.
Location
Approximate
Square
Footage Use
North America:
345 Park Avenue
San Jose, CA 95110, USA 378,000
Research, product development, sales and
marketing
321 Park Avenue
San Jose, CA 95110, USA 321,000
Research, product development, sales and
marketing
151 Almaden Boulevard
San Jose, CA 95110, USA 267,000
Administration, product development and
sales
601 and 625 Townsend
San Francisco, CA 94103, USA 263,000
Research, product development,
administration, sales, and marketing
801 N. 34th Street-Waterfront
Seattle, WA 98103, USA 255,000
Product development, sales, technical
support, and administration
1-3 Riverside Center
275 Grove Street
Newton, MA 02466, USA 81,000*
Sales, marketing, research, product
development
333 Preston Street
Ottawa, Ontario K1S 1N4
122,000
Research, product development, sales,
marketing, and administration