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66
fiscal 2010, our currency hedging program related to EMEA and Japan resulted in hedging gains of $19.5 million and $0.6
million, respectively.
Fiscal 2009 Revenue by Geography Compared to Fiscal 2008 Revenue by Geography
Overall revenue in each of the geographic segments for fiscal 2009 decreased compared to fiscal 2008 primarily due to
the global economic recession, which resulted in reduced adoption of many of our major products.
Included in the overall decrease in revenue were impacts associated with foreign currency. Revenue in EMEA
measured in U.S. dollars decreased approximately $47.1 million, due to the strength of the U.S. dollar against the Euro, as
compared to fiscal 2008. Our currency hedging program is used to mitigate a portion of the foreign currency impact to
revenue. Revenue in Asia measured in U.S. dollars was favorably impacted by approximately $32.8 million due to the
strength of the Yen against the U.S. dollar as compared to fiscal 2008. During fiscal 2009, our currency hedging program
related to the Euro and Yen resulted in hedging gains of $25.8 million and $1.2 million, respectively.
See Item 7A, Quantitative and Qualitative Disclosures About Market Risk regarding foreign currency risks.
Product Backlog
The amount of product backlog at any particular time may not be a meaningful indicator of future business prospects.
Shippable backlog is comprised of unfulfilled orders, excluding those associated with new product releases, those pending
credit review and those not shipped due to the application of our global inventory policy. Our shippable backlog at the end of
the fourth quarter of fiscal 2010 was approximately 5% of fourth quarter fiscal 2010 revenue. We had minimal shippable
backlog at the end of the third quarter of fiscal 2010. Our shippable backlog at the end of the fourth quarter of fiscal 2009
was approximately 9% of fourth quarter fiscal 2009 revenue.
Cost of Revenue (dollars in millions)
Fiscal
2010
Fiscal
2009
Fiscal
2008
% Change
2010-2009
% Change
2009-2008
Product .......................................................
$
127.5
$
180.6
243.2
(29
)%
(26
)%
Percentage of total revenue ....................
3
%
6
%
7
%
Subscription ...............................................
195.6
48.3
23.2
*
*
Percentage of total revenue ....................
5
%
2
%
1
%
Services and support ..................................
80.4
67.8
96.2
19
%
(30
)%
Percentage of total revenue ....................
2
%
2
%
3
%
Total cost of revenue .................................
$
403.5
$
296.7
362.6
36
%
(18
)%
_________________________________________
* Percentage is greater than 100%.
Product
Cost of product revenue includes product packaging, third-party royalties, excess and obsolete inventory, amortization
related to localization costs, purchased intangibles and acquired rights to use technology and the costs associated with the
manufacturing of our products.
Cost of product revenue decreased due to the following:
% Change
2010-2009
% Change
2009-2008
Amortization of purchased intangibles ......................................................................
(23
)%
(12
)%
Amortization of acquired rights to use technology ....................................................
1
(8
)
Localization costs related to our product launches ....................................................
(7
)
(1
)
Royalty cost ...............................................................................................................
(5
)
(1
)
Cost of sales ...............................................................................................................
4
(2
)
Various individually insignificant items ....................................................................
1
(2
)
Total change ...........................................................................................................
(29
)%
(26
)%
Amortization of purchased intangibles decreased during fiscal 2010 as compared to fiscal 2009 and decreased during
fiscal 2009 as compared to fiscal 2008, due to decreases in amortization of $46.4 million and $80.0 million, respectively,
associated with intangible assets purchased through the Macromedia acquisition which were fully amortized during fiscal
2009.