Adobe 2006 Annual Report Download - page 49

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49
Fiscal 2006 Revenue by Geography Compared to Fiscal 2005 Revenue by Geography
Overall revenues in each of the geographic segments for fiscal 2006 increased comparatively to fiscal 2005
primarily due to the acquisition of Macromedia.
Revenue in the Americas and EMEA increased during fiscal 2006 as compared to fiscal 2005 due to the
strength of our Creative Solutions, Enterprise Solutions, Knowledge Worker Solutions and Other segments.
Revenue in Asia increased during fiscal 2006 as compared to fiscal 2005 due to the strength of our Creative
Solutions, Enterprise Solutions, Mobile and Device Solutions, and Other segments.
Additionally, due to the weakening of the euro and the yen, revenues in EMEA and Asia measured in U.S.
dollars were lower by approximately $13.8 million and $21.2 million, respectively in fiscal 2006 as compared to
fiscal 2005.
Fiscal 2005 Revenue by Geography Compared to Fiscal 2004 Revenue by Geography
Revenue in the Americas increased during fiscal 2005 as compared to fiscal 2004 due to the strength of our
Creative Solutions and Enterprise Solutions segments.
Revenue in EMEA and Asia increased during fiscal 2005 as compared to fiscal 2004 due to the strength of
our Creative Solutions, Knowledge Worker Solutions and Enterprise Solutions segments.
Additionally, due to the strength of the euro and the yen, revenues in EMEA and Asia measured in U.S.
dollars were higher by approximately $15.0 million and $3.0 million, respectively, in fiscal 2005 as compared to
fiscal 2004.
Inventory Information
At the end of fiscal 2006 our overall channel inventory position was within our global inventory policy which
allows up to an estimated 4.5 weeks of anticipated total product supply at our distributors.
With regard to our product backlog, our experience is that the actual amount of backlog at any particular
time may not be a meaningful indicator of future business prospects. For example, prior to the finalization and
release of new products, we may have significant levels of orders for new product releases. Our backlog of
unfulfilled orders at the end of fiscal 2006, other than those associated with new product releases, those pending
credit review and those not shipped due to the application of our global distributor inventory policy, was
approximately 2% of fourth quarter fiscal 2006 revenue. The comparable backlog at the end of third quarter of
fiscal 2006 was an insignificant percentage of third quarter fiscal 2006 revenue.
Cost of Revenues
Fiscal
2006
% Change
2006 to 2005
Fiscal
2005
% Change
2005 to 2004 Fiscal
2004
Product ...................................... $ 226.5 152% $ 90.0 4% $ 86.6
Percentage of total revenues .. 9% 5% 5%
Services and support.................. 66.0 192% 22.6 27% 17.8
Percentage of total revenues .. 3% 1% 1%
Total cost of revenues............ $ 292.5 160% $ 112.6 8% $ 104.4
Product
Cost of product revenue includes product packaging, third-party royalties, excess and obsolete inventory,
amortization related to localization costs and acquired technologies and the costs associated with the
manufacturing of our products.