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See accompanying Notes to Consolidated Financial Statements.
68
ADOBE SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended
November 30,
2007
December 1,
2006
December 2,
2005
Cash flows from operating activities:
Net income........................................................ $ 723,807 $ 505,809 $ 602,839
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization........................................ 315,464 307,822 82,775
Stock-based compensation expense.................................... 149,987 170,534 391
Deferred income taxes ............................................. 58,385 (4,264 ) (7,068)
Tax benefit from employee stock option plans............................ 55,074 143,118 82,852
Retirements of property and equipment................................. 1,191 767 1,093
Provision for (recovery of) losses on receivables .......................... (1,367) 1,107 394
Provision for estimated returns....................................... 156,761 97,566 92,754
Net (gains) losses on sales and impairments of investments.................. (6,776) (63,593 ) 1,322
Excess tax benefits from stock-based compensation........................ (85,050) (107,524 ) —
Changes in operating assets and liabilities, net of acquired assets and assumed
liabilities:
Trade and other receivables ....................................... (103,244) (210,410 ) (128,845)
Prepaid expenses and other current assets............................. (2,517) 12,430 (10,585)
Trade and other payables ......................................... 11,545 11,794 (2,456)
Accrued expenses............................................... 75,254 (31,057 ) 26,278
Accrued restructuring............................................ (13,796) (41,091 ) —
Income taxes payable............................................ 61,448 27,247 8,616
Deferred revenue............................................... 43,137 79,690 8,029
Net cash provided by operating activities........................... 1,439,303 899,945 758,389
Cash flows from investing activities:
Purchases of short-term investments ..................................... (2,503,147) (1,596,442 ) (1,849,862)
Maturities of short-term investments ..................................... 516,839 357,775 309,202
Sales of short-term investments......................................... 2,457,347 1,010,284 1,291,131
Purchases of long-term investments and other assets ......................... (110,189) (28,381 ) (41,792)
Acquisitions of property and equipment................................... (132,075) (83,250 ) (48,875)
Cash received from acquisitions ........................................ 1,676 492,758 1,278
Cash paid for acquisitions............................................. (77,204) (48,351 ) (10,819)
Investment in lease receivable .......................................... (80,439) — —
Proceeds from sale of equity securities and other assets ....................... 11,342 90,793 1,338
Payment of issuance costs for credit facility................................ (856) — —
Net cash provided by (used for) investing activities...................... 83,294 195,186 (348,399)
Cash flows from financing activities:
Purchase of treasury stock............................................. (1,951,527) (1,364,412 ) (600,099)
Proceeds from re-issuance of treasury stock ................................ 516,087 509,506 356,547
Excess tax benefits from stock-based compensation.......................... 85,050 107,524 —
Payment of dividends................................................. — — (3,044)
Net cash used for financing activities..................................... (1,350,390) (747,382 ) (246,596)
Effect of exchange rates on cash and cash equivalents........................ 1,715 3,933 (1,637)
Net increase in cash and cash equivalents.................................... 173,922 351,682 161,757
Cash and cash equivalents at beginning of year................................ 772,500 420,818 259,061
Cash and cash equivalents at end of year .................................... $ 946,422 $ 772,500 $ 420,818
Supplemental disclosures:
Cash paid for income taxes, net of refunds................................. $ 55,236 $ 36,632 $ 78,633
Non-cash investing and financing activities:
Common and treasury stock issued and stock options assumed for Macromedia . . . $ — $ 3,436,725 $ —