Adobe 2015 Annual Report Download - page 44

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Table of Contents
44
Included in the overall change in revenue for fiscal 2015 and fiscal 2014 were impacts associated with foreign currency as
shown below. Our currency hedging program is used to mitigate a portion of the foreign currency impact to revenue.
(in millions) Fiscal
2015 Fiscal
2014
Revenue impact: Increase/(Decrease)
EMEA:
Euro $ (104.3) $ 12.3
British Pound (16.1) 12.9
Other currencies (12.3)(0.2)
Total EMEA (132.7) 25.0
Japanese Yen (35.0)(25.7)
Other currencies (23.9)(8.9)
Total revenue impact (191.6)(9.6)
Hedging impact:
EMEA 40.1 10.1
Japanese Yen 16.2 8.6
Total hedging impact 56.3 18.7
Total impact $ (135.3) $ 9.1
During fiscal 2015, the U.S. Dollar strengthened against the Euro, British Pound, Japanese Yen and other Asian currencies
causing revenue in EMEA and APAC measured in U.S. Dollar equivalents to decrease as compared to fiscal 2014. These decreases
were partially offset by hedging gains from our EMEA currencies and Japanese Yen hedging programs during fiscal 2015.
During fiscal 2014, the U.S. Dollar strengthened against the Japanese Yen and other Asian currencies causing revenue in
APAC measured in U.S. Dollar equivalents to decrease compared to fiscal 2013. This decrease was offset in part by the favorable
impact to revenue measured in EMEA currencies as the U.S. Dollar weakened against the Euro and the British Pound for the
majority of fiscal 2014. Our EMEA and Yen currency hedging programs resulted in hedging gains during fiscal 2014.
See Note 18 of our Notes to Consolidated Financial Statements for further geographic information.
Product Backlog
The actual 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. We had minimal shippable backlog at the end
of the fourth quarter of fiscal 2015 and fiscal 2014. We expect that our shippable backlog will continue to be insignificant in future
periods.
Deferred revenue on our consolidated balance sheet does not represent the total contract value of annual or multi-year, non-
cancelable commercial subscription agreements or government contracts with fiscal funding clauses. Unbilled deferred revenue
represents expected future billings which are contractually committed under our existing subscription, SaaS and managed services
agreements that have not been invoiced and are not recorded in deferred revenue within our financial statements. Our presentation
of unbilled deferred revenue backlog may differ from that of other companies in the industry. As of November 27, 2015, we had
unbilled deferred revenue backlog of approximately $2.89 billion of which approximately 40% to 50% is not reasonably expected
to be billed during fiscal 2016. As of November 28, 2014, we had unbilled deferred revenue backlog of approximately $2.19
billion, which has been updated to include $433 million of individual annual subscriptions which were not captured in the prior
year due to current year enhancements to our management reporting system.
We expect that the amount of unbilled deferred revenue backlog will change from period to period due to certain factors,
including the timing and duration of large customer subscription, SaaS and managed service agreements, varying billing cycles
of these agreements, the timing of customer renewals, the timing of when unbilled deferred revenue backlog is to be billed, changes
in customer financial circumstances and foreign currency fluctuations. Additionally, the unbilled deferred revenue backlog for
multi-year subscription agreements that are billed annually is typically higher at the beginning of the contract period, lower prior
to renewal and typically increases when the agreement is renewed. Accordingly, fluctuations in unbilled deferred revenue backlog
may not be a reliable indicator of future business prospects and the related revenue associated with these contractual commitments.