Adobe 2008 Annual Report Download - page 59

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59
LIQUIDITY AND CAPITAL RESOURCES
This data should be read in conjunction with the consolidated statements of cash flows.
Fiscal
2008
Fiscal
2007
Cash, cash equivalents and short-term
investments ...........................
$
2,019.2
$
1,993.9
Working capital ..........................
1,972.5
1,720.4
Stockholders’ equity ......................
$
4,410.4
$
4,650.0
Summary of our cash flows is as follows:
Fiscal
2008
Fiscal
2007
Fiscal
2006
Net cash provided by operating activities ...........................
$
1,280.7
$
1,441.1
$
900.0
Net cash (used for) provided by investing activities ..................
(304.7
)
81.5
195.2
Net cash used for financing activities ..............................
(1,021.6
)
(1,350.4
)
(747.4
)
Effect of foreign currency exchange rates on cash and cash equivalents ..
(14.4
)
1.7
3.9
Net (decrease) increase in cash and cash equivalents .................
$
(60.0
)
$
173.9
$
351.7
Our primary source of cash is receipts from revenue. The primary uses of cash are payroll related expenses; general
operating expenses including marketing, travel and office rent; and cost of product revenue. Another source of cash is
proceeds from the exercise of employee options and participation in the employee stock purchase plan and another use of
cash is our stock repurchase program, which is detailed below.
Cash flows from operating activities
Net cash provided by operating activities of $1.3 billion for fiscal 2008, was primarily comprised of net income plus the
net effect of non-cash expenses. The primary working capital sources of cash were increases in net income, deferred revenue
and trade payables. Increases in deferred revenue related to maintenance and support and free of charge upgrade plan
purchases which offset in part, decreases in deferred revenue related to royalties.
The primary working capital uses of cash were increases in trade receivables and prepaid expenses and other current
assets coupled with decreases in income taxes payable, accrued expenses and accrued restructuring costs. Trade receivables
increased primarily as a result of high sales of our CS4 family of products at the end of fiscal 2008. Income taxes payable
decreased primarily due to payments made as the result of the completion of a U.S. income tax examination covering our
fiscal years 2001 through 2004. Accrued expenses decreased primarily due to payments for employee bonuses and profit
sharing offset in part by increases in royalty accruals and charitable contributions. Accrued restructuring costs increased due
to the restructuring program initiated in the fourth quarter of fiscal 2008 offset in part by payments of facility costs during
fiscal 2008 associated with the Macromedia acquisition. See Note 9 of our Notes to Consolidated Financial Statements for
information regarding our restructuring charges.
Net cash provided by operating activities of $1.4 billion for fiscal 2007, was primarily comprised of net income, net of
non-cash related expenses. The primary working capital sources of cash were increases in net income, accrued expenses,
income taxes payable, deferred revenue and trade payables coupled with decreases in trade receivables and prepaid expenses
and other current assets. Net changes in accrued expenses was primarily attributable to increases in accrued bonuses and
accrued localization costs related to the localization of our CS3 family of products during fiscal 2007. Income taxes payable
increased due to overall increased taxable income. Increases to deferred revenue related primarily to deferred maintenance
and service revenue due to strong upgrade plan sales in the fourth quarter of fiscal 2007 for our CS3 family of products and
related individual creative products. The decrease in trade receivables was due to collections in the first quarter of fiscal 2007
related to high Acrobat 8 sales at the end of fiscal 2006 and strong collections during the third quarter of fiscal 2007 resulting
from shipments of our CS3 family of products.
The primary working capital use of cash was a decrease in accrued restructuring costs which was primarily due to
payments for facility and severance costs for fiscal 2007.