0000796343
adbe:Unaudited
2008-02-29
0000796343
adbe:Unaudited
2007-11-30
0000796343
2008-05-30
0000796343
2009-03-27
0000796343
2008-11-29
2009-02-27
0000796343
adbe:Unaudited
2008-11-29
2009-02-27
0000796343
adbe:Unaudited
2007-12-01
2008-02-29
0000796343
adbe:Unaudited
2009-02-27
0000796343
adbe:Unaudited
2008-11-28
0000796343
adbe:Unaudited
2008-11-29
2009-02-27
iso4217:USD
xbrli:shares
xbrli:shares
iso4217:USD
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 5 - adbe:AccruedExpensesTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 5. ACCRUED EXPENSES</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Accrued expenses as of February 27, 2009 and November 28, 2008 consisted of the following (in
thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Accrued compensation and benefits
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">133,817</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">177,760</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Taxes payable
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15,579</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">21,760</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Sales and marketing allowances
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">29,594</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">28,127</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">166,687</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">172,322</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Total accrued expenses
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">345,677</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">399,969</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Other primarily includes general corporate accruals for corporate marketing programs, local
and regional expenses, and technical support. Other is also comprised of
deferred rent related to office locations with rent escalations, accrued royalties, foreign
currency derivatives and accrued interest on the credit facility.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 12 - adbe:CommitmentsAndContingenciesTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 12. COMMITMENTS AND CONTINGENCIES</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Lease Commitments</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We occupy three office buildings in San Jose, California where our corporate headquarters are
located. We reference these office buildings as the Almaden Tower and the East and West Towers.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In August 2004, we extended the lease agreement for our East and West Towers for an additional
five years with an option to extend for an additional five years solely at our election. In March
2007, the Almaden Tower lease was extended for five years, with a renewal option for an additional
five years solely at our election. As part of the lease extensions, we purchased the lease
receivable from the lessor of the East and West Towers for $126.8 million and a portion of the
lease receivable from the lessor of the Almaden Tower for $80.4 million, both of which are recorded
as investments in lease receivables on our condensed consolidated balance sheets. This purchase may
be credited against the residual value guarantee if we purchase the properties or will be repaid
from the sale proceeds if the properties are sold to third parties. Under the
agreement for the East and West Towers and the agreement for the Almaden Tower, we have the
option to purchase the buildings at any time during the lease term for approximately $143.2 million
and $103.6 million, respectively. The residual value guarantees under the East and West Towers and
the Almaden Tower obligations are $126.8 million and $89.4 million, respectively.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> These two leases are both subject to standard covenants including certain financial ratios
that are reported to the lessors quarterly. As of February 27, 2009, we were in compliance with all
covenants. In the case of a default, the lessor may demand we purchase the buildings for an amount
equal to the lease balance, or require that we remarket or relinquish the buildings. Both leases
qualify for operating lease accounting treatment under SFAS No. 13, “Accounting for Leases,” and,
as such, the buildings and the related obligations are not included on our condensed consolidated
balance sheets. We utilized this type of financing in order to access bank-provided funding at the
most favorable rates and to provide the lowest total cost of occupancy for the headquarter
buildings. At the end of the lease term, we can extend the lease for an additional five year term,
purchase the buildings for the lease balance, remarket or relinquish the buildings. If we choose to
remarket or are required to do so upon relinquishing the buildings, we are bound to arrange the
sale of the buildings to an unrelated party and will be required to pay the lessor any shortfall
between the net remarketing proceeds and the lease balance, up to the residual value guarantee
amount.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Guarantees</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The lease agreements for our corporate headquarters provide for residual value guarantees as
noted above. Under FIN 45, the fair value of a residual value guarantee in lease agreements entered
into after December 31, 2002 must be recognized as a liability on our condensed consolidated
balance sheets. As such, we recognized $5.2 million and $3.0 million in liabilities, related to the
East and West Towers and Almaden Tower leases, respectively. These liabilities are recorded in
other long-term liabilities with the offsetting entry recorded as prepaid rent in other assets. The
balance will be amortized to the income statement over the life of the leases. As of February 27,
2009 and November 28, 2008, the unamortized portion of the fair value of the residual value
guarantees, for both leases, remaining in other long-term liabilities and prepaid rent was $2.2
million and $2.6 million, respectively.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Royalties</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We have royalty commitments associated with the shipment and licensing of certain products.
Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the
underlying revenue.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Indemnifications</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In the normal course of business, we provide indemnifications of varying scope to customers
against claims of intellectual property infringement made by third parties arising from the use of
our products. Historically, costs related to these indemnification provisions have not been
significant and we are unable to estimate the maximum potential impact of these indemnification
provisions on our future results of operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> To the extent permitted under Delaware law, we have agreements whereby we indemnify our
directors and officers for certain events or occurrences while the director or officer is, or was
serving, at our request in such capacity. The indemnification period covers all pertinent events
and occurrences during the director’s or officer’s lifetime. The maximum potential amount of future
payments we could be required to make under these indemnification agreements is unlimited; however,
we have director and officer insurance coverage that reduces our exposure and enables us to recover
a portion of any future amounts paid. We believe the estimated fair value of these indemnification
agreements in excess of applicable insurance coverage is minimal.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> As part of our limited partnership interest in Adobe Ventures, we have provided a general
indemnification to Granite Ventures, an independent venture capital firm and sole general partner
of Adobe Ventures, for certain events or occurrences while Granite Ventures is, or was serving, at
our request in such capacity provided that Granite Ventures acts in good faith on behalf of the
partnership. We are unable to develop an estimate of the maximum potential amount of future
payments that could potentially result from any hypothetical future claim, but believe the risk of
having to make any payments under this general indemnification to be remote.
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Legal Proceedings</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In connection with our anti-piracy efforts, conducted both internally and through
organizations such as the Business Software Alliance, from time to time we undertake litigation
against alleged copyright infringers. Such lawsuits may lead to counter-claims alleging improper
use of litigation or violation of other local laws. We believe we have valid defenses with respect
to such counter-claims; however, it is possible that our consolidated financial position, cash
flows or results of operations could be affected in any particular period by the resolution of one
or more of these counter-claims.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> From time to time, Adobe is subject to legal proceedings, claims and investigations in the
ordinary course of business, including claims of alleged infringement of third-party patents and
other intellectual property rights, commercial, employment and other matters. We believe that we
have valid defenses with respect to the legal matters pending against Adobe; however, litigation is
inherently unpredictable and it is possible that our consolidated financial position, cash flows or
results of operations could be negatively affected by an unfavorable resolution of one or more of
such proceedings, claims or investigations.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 7 - adbe:EmployeeBenefitPlanTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 7. EMPLOYEE BENEFIT PLAN</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Deferred Compensation Plan</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> As of February 27, 2009 and November 28, 2008, the invested amounts under our Deferred
Compensation Plan totaled $8.1 million and $7.6 million, respectively, and are recorded as
long-term other assets on our condensed consolidated balance sheets. As of February 27, 2009 and
November 28, 2008, we recorded $8.1 million and $7.6 million, respectively, as a long-term
liability to recognize undistributed deferred compensation due to employees.
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 10 - adbe:OtherComprehensiveIncomeLossTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 10. OTHER COMPREHENSIVE INCOME (LOSS)</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The following table sets forth the components of other comprehensive income (loss) for the
three months ended February 27, 2009 and February 29, 2008 (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="52%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Net income
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">156,435</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">219,379</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other comprehensive income (loss):
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Unrealized (losses) on derivative instruments
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(5,450</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(31</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Reclassification adjustment for gains (losses) on derivative
instruments recognized during the period
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(20,476</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Unrealized (losses) on available-for-sale securities, net of taxes
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(1,969</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(3,079</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Reclassification adjustment for gains on available-for-sale
securities recognized during the period
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(1,310</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(2,922</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,378</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:45px; text-indent:-15px">Other comprehensive loss
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(32,127</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(1,732</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total other comprehensive income, net of taxes
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">124,308</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">217,647</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 6 - adbe:StockBasedCompensationTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 6. STOCK-BASED COMPENSATION</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The
assumptions used to value option grants during the three months ended February 27, 2009 and February 29, 2008 were as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Expected life (in years)
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="right">3.7 – 3.8</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="right">2.27 – 4.64</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Volatility
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">50 – 57 </TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">33 – 35 </TD>
<TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Risk free interest rate
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">1.16 – 1.40 </TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">2.37 – 3.35 </TD>
<TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The expected term of employee stock purchase plan (“ESPP”) shares is the average of the
remaining purchase periods under each offering period. The assumptions used to value employee stock
purchase rights during the three months ended February 27, 2009 and February 29, 2008 were as
follows:
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Expected life (in years)
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="right">0.5 – 2.0</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="right">0.5 – 2.0</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Volatility
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">49 – 57 </TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">30 – 31 </TD>
<TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Risk free interest rate
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">0.27 – 0.88 </TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD nowrap align="right">2.82 – 3.29 </TD>
<TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Summary of Stock Options</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Information regarding stock options outstanding at February 27, 2009 and February 29, 2008 is
summarized below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="52%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Weighted</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Average</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Weighted</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Remaining</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Aggregate</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Number of</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Average</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Contractual</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Intrinsic</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Shares</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Life</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Value*</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(thousands)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Price</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(years)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(millions)</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2009</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">42,773</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">28.96</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4.12</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">18.8</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">40,561</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">28.90</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4.00</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">18.8</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options exercisable
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">27,635</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">27.40</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3.19</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">18.8</TD>
<TD> </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2008</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">50,247</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">29.08</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4.41</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">313.2</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">45,200</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">28.33</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4.23</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">308.0</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Options exercisable
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">30,625</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">24.63</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3.35</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">294.7</TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left">*</TD>
<TD> </TD>
<TD>The intrinsic value is calculated as the difference between the market value as of the end of
the fiscal period and the exercise price of the shares. As reported by the NASDAQ Global
Select Market, the market values as of February 27, 2009 and February 29, 2008 were $16.70 and
$33.65, respectively.</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Summary of Restricted Stock Units</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Restricted stock unit activity for the three months ended February 27, 2009 and February 29,
2008 was as follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Beginning balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,261</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,701</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Awarded
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,979</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,395</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Released
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(814</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(292</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Forfeited
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(157</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(36</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Ending balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,269</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,768</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Information regarding restricted stock units outstanding at February 27, 2009 and February 29,
2008 is summarized below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="64%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Weighted</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Average</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Remaining</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Aggregate</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Number of</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Contractual</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Intrinsic</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Shares</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Life</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Value*</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(thousands)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(years)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(millions)</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2009</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Restricted stock units outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,269</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2.13</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">104.7</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Restricted stock units vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,638</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1.94</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">77.4</TD>
<TD> </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2008</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Restricted stock units outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,768</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2.31</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">126.8</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Restricted stock units vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,567</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2.11</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">86.3</TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left">*</TD>
<TD> </TD>
<TD>The intrinsic value is calculated as the market value as of the end of the fiscal period. As
reported by the NASDAQ Global Select Market, the market values as of February 27, 2009 and
February 29, 2008 were $16.70 and $33.65, respectively.</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Summary of Performance Shares</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Effective January 26, 2009, the Executive Compensation Committee adopted the 2009 Performance
Share Program (the “2009 Program”). The purpose of the 2009 Program is to align key management and
senior leadership with stockholders’ interests and to retain key employees. The measurement period
for the 2009 Program is our fiscal 2009 year. All members of our executive management and other key
senior leaders are participating in the 2009 Program. Awards granted under the 2009 Program were
granted in the form of performance shares pursuant to the terms of our 2003 Equity Incentive Plan.
If pre-determined performance goals are met, shares of stock will be granted to the recipient, with
25% vesting on the later of the date of certification of achievement or the first anniversary date
of the grant, and the remaining 75% vesting evenly on the following three annual anniversary dates
of the grant, contingent upon the recipient’s continued service to Adobe. Participants in the 2009
Program have the ability to receive up to 115% of the target number of shares originally granted.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The
following table sets forth the summary of performance share activity
under our 2009
Program for the three months ended February 27, 2009 (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Maximum</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Shares</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Eligible</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Granted</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>to Receive</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Beginning balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Awarded
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">533</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">613</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Forfeited
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Ending balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">533</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">613</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In the first quarter of fiscal 2009, the Executive Compensation Committee certified the actual
performance achievement of participants in the 2008 Performance Share Program (the “2008 Program”).
Based upon the achievement of goals outlined in the 2008 Program, participants had the ability to
receive up to 200% of the target number of shares originally granted. Actual performance resulted
in participants achieving approximately 124% of target or approximately 1.0 million shares for the
2008 Program. Shares under the 2008 Program vested 25% in the first quarter of fiscal 2009, and the
remaining 75% vest evenly on the following three annual anniversary dates of the grant, contingent
upon the recipient’s continued service to Adobe.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The
following table sets forth the summary of performance share activity under our 2007 and 2008 programs,
based upon share awards actually achieved, for the three months ended February 27, 2009 and
February 29, 2008 (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Beginning balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">383</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Achieved
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,022</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">717</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Released
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(354</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(189</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Forfeited
</DIV></TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(6</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="right"> </TD>
<TD align="right">(24</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 1px solid #000000"> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Ending balance
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,045</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">504</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD colspan="3" align="right" style="border-top: 3px double #000000"> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Information regarding performance shares outstanding at February 27, 2009 and February 29,
2008 is summarized below:
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="64%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Weighted</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Average</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Remaining</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Aggregate</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Number of</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Contractual</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Intrinsic</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Shares</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Life</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Value*</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(thousands)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(years)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(millions)</B></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2009</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Performance shares outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,045</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1.76</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">17.5</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Performance shares vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">811</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1.67</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">13.5</TD>
<TD> </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px"><B>2008</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Performance shares units outstanding
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">504</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1.88</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">17.0</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Performance shares vested and expected to vest
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">330</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1.77</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">11.0</TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left">*</TD>
<TD> </TD>
<TD>The intrinsic value is calculated as the market value as of the end of the fiscal period. As
reported by the NASDAQ Global Select Market, the market values as of February 27, 2009 and
February 29, 2008 were $16.70 and $33.65, respectively.</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Compensation Costs</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> As of February 27, 2009, there was $296.3 million of unrecognized compensation cost, adjusted
for estimated forfeitures, related to non-vested stock-based awards which will be recognized over a
weighted average period of 2.8 years. Total unrecognized compensation cost will be adjusted for
future changes in estimated forfeitures.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Total stock-based compensation costs that have been included in our condensed consolidated
statements of income for the three months ended February 27, 2009 and February 29, 2008 were as
follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="52%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Option</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Restricted</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Option</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Restricted</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Grants</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Stock and</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Grants</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Stock and</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>and Stock</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Performance</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>and Stock</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Performance</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Purchase</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Share</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Purchase</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Share</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD nowrap align="left"><FONT style="border-bottom: 1px solid #000000; width: 30%"><B>Income Statement Classifications</B></FONT></TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Rights</B> <SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Awards</B><SUP style="font-size: 85%; vertical-align: text-top"> <B>(1) (2)</B></SUP></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Rights</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Awards</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Cost of revenue—services and support
</DIV></TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(91</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">194</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">804</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">40</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Research and development
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">14,132</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,444</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">14,926</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,396</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Sales and marketing
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,867</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">5,237</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">10,907</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,541</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">General and administrative
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,188</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,866</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">5,942</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,478</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">29,096</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">16,741</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">32,579</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">10,455</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
<TD> </TD>
<TD>For the three months ended February 27, 2009, we recorded $0.2 million associated
with cash recoveries of fringe benefit tax from employees in India. For the three months ended
February 29, 2008 there were no amounts associated with cash recoveries of fringe benefit tax
from employees in India.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
<TD> </TD>
<TD>For the three months ended February 27, 2009, we recorded $0.4 million associated
with the performance shares awarded under the 2009 Program. These shares are
liability–classified for financial statement purposes until the metrics under the program
have been achieved.</TD>
</TR>
</TABLE>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 3 - adbe:GoodwillAndPurchasedAndOtherIntangiblesTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 3. GOODWILL AND PURCHASED AND OTHER INTANGIBLES</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Goodwill as of February 27, 2009 and November 28, 2008 was $2.132 billion and $2.135 billion,
respectively. The change includes reductions in goodwill primarily
related to unrecognized tax benefits associated with the acquisition
of Macromedia in addition to foreign currency translation adjustments.
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Purchased and other intangible assets subject to amortization as of February 27, 2009 were as
follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="64%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Accumulated</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amortization</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Net</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Purchased technology
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">411,493</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(352,998</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">58,495</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Localization
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">28,655</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(14,851</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">13,804</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Trademarks
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">130,925</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(84,767</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">46,158</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Customer contracts and relationships
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">198,889</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(136,255</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">62,634</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other intangibles
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">800</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(423</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">377</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total other intangible assets
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">359,269</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(236,296</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">122,973</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total purchased and other intangible assets
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">770,762</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(589,294</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">181,468</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Purchased and other intangible assets subject to amortization as of November 28, 2008 were as
follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="64%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Accumulated</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Cost</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Amortization</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Net</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Purchased technology
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">411,408</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(338,608</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">72,800</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Localization
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">23,751</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(6,156</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">17,595</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Trademarks
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">130,925</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(78,181</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">52,744</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Customer contracts and relationships
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">198,891</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(127,520</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">71,371</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other intangibles
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">800</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(350</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">450</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total other intangible assets
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">354,367</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(212,207</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">142,160</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total purchased and other intangible assets
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">765,775</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(550,815</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">214,960</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Amortization expense related to purchased and other intangible assets was $39.0 million and
$49.5 million for the three months ended February 27, 2009 and February 29, 2008, respectively. Of
these amounts, $23.6 million and $32.4 million was included in cost of sales for the three months
ended February 27, 2009 and February 29, 2008, respectively.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Amortization expense decreased during the three months ended February 27, 2009 as compared to
the three months ended February 29, 2008, due to a decrease in amortization expense associated with
intangible assets purchased through the Macromedia acquisition.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Purchased and other intangible assets are amortized over their estimated useful lives of 1 to
13 years. As of February 27, 2009, we expect amortization expense in future periods to be as
follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Other</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Purchased</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Intangible</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD nowrap align="left" style="border-bottom: 0px solid #000000"><B>Fiscal year</B>
<DIV style="font-size: 1px; border-bottom: 1px solid #00000; width: 35%">
</DIV></TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Technology</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Remainder of 2009
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">41,869</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">59,306</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">2010
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,273</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">49,564</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">2011
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,966</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">11,917</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">2012
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,387</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,009</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">2013
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">789</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Thereafter
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">388</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total expected amortization expense
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">58,495</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">122,973</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 14 - adbe:NonOperatingIncomeExpenseTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 14. NON-OPERATING INCOME (EXPENSE)</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Non-operating income (expense) for the three months ended February 27, 2009 and February 29,
2008 included the following (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Interest and other income, net:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Interest income
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">11,118</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">17,511</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Foreign exchange gains (losses)
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">634</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(4,700</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Realized
gains on fixed income investment
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,311</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Other, net
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">221</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">479</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:45px; text-indent:-15px">Interest and other income, net
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">13,284</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">13,290</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Interest expense
</DIV></TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(792</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(1,809</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Investment gains (losses), net:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Realized investment gains
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">103</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">5,397</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Unrealized investment gains
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">124</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,914</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Realized investment losses
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(1,295</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(383</TD>
<TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Unrealized investment losses
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(16,178</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(196</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:45px; text-indent:-15px">Investment (losses) gains, net
</DIV></TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(17,246</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">8,732</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total non-operating income (expense), net
</DIV></TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(4,754</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">20,213</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 8 - adbe:RestructuringChargesTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 8. RESTRUCTURING CHARGES</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Fiscal 2008 Restructuring Charges</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In the fourth quarter of fiscal 2008, we initiated a restructuring program, consisting of
reductions in workforce of approximately 560 full-time positions globally and the consolidation of
facilities, in order to reduce our operating costs and focus our resources on key strategic
priorities. In connection with this restructuring program, we recorded restructuring charges in the
fourth quarter of fiscal 2008 totaling $29.2 million related to termination benefits for the
elimination of approximately 460 of the 560 full-time positions globally. Charges associated with
these ongoing termination benefits were recorded in accordance with SFAS No. 112, “Employers’
Accounting for Postemployment Benefits,” As of November 28, 2008, $0.4 million was paid.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In the first quarter of fiscal 2009, we continued to implement restructuring activities under
this program. We vacated approximately 89,000 square feet of research and development and sales
facilities in the U.S., the United Kingdom and Canada. In accordance with SFAS No. 146 (“SFAS
146”), “Accounting for Costs Associated with Exit or Disposal Activities,” we accrued $8.5 million
for the fair value of our future contractual obligations under the operating lease using our
credit-adjusted risk-free interest rate, estimated at approximately 6% as of the date we ceased to
use the leased property. This amount is net of estimated sublease income. We also recorded charges
of $3.4 million for termination benefits for the elimination of approximately 43 of the remaining
100 full-time positions expected to be terminated.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The following table sets forth a summary of Adobe restructuring activities during the three
months ended February 27, 2009 (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="23%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Total</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Total</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Costs</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Costs</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>November</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>February</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Incurred</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Expected</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>28,</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Costs</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Cash</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Other</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>27,</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>to</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>to be</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Incurred</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Payments</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Adjustments</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Incurred</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Termination benefits
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">28,759</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">3,394</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(24,481</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">102</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">7,774</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">24,928</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">32,702</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Cost of closing
redundant
facilities
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,514</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(2,684</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">5,838</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,684</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,522</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">28,759</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">11,908</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(27,165</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">110</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">13,612</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">27,612</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">41,224</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Accrued restructuring charges of $13.6 million at February 27, 2009 include $11.1 million
recorded in accrued restructuring, current and $2.5 million related to long-term facilities
obligations recorded in accrued restructuring, non-current in the accompanying condensed
consolidated balance sheets. We expect to pay substantially all of the accrued termination benefits
during the remainder of fiscal 2009. We expect to pay facilities-related liabilities through fiscal
2013.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Included in the other adjustments column is a foreign currency translation adjustment of $0.1
million offset by a small change to previous estimates.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Macromedia Merger Restructuring Charges</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We completed our acquisition of Macromedia on December 3, 2005. In connection with this
acquisition, we initiated plans to restructure both the pre-merger operations of Adobe and
Macromedia to eliminate certain duplicative activities, focus our resources on future growth
opportunities and reduce our cost structure. In connection with the worldwide restructuring plan,
we recognized costs related to termination benefits for employee positions that were eliminated and
for the closure of duplicative facilities. We also recognized costs related to the cancellation of
certain contracts associated with the wind-down of subsidiaries and other service contracts held by
Macromedia. Costs for termination benefits and contract terminations were completed during fiscal
2007. Total costs incurred were $27.0 million and $3.2 million, respectively.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The following table sets forth a summary of Macromedia restructuring activities during the
three months ended February 27, 2009 (in thousands):
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="28%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Total</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Total</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Costs</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Costs</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>November</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>February</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Incurred</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Expected</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>28,</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Cash</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Other</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>27,</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>to</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>to be</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Payments</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Adjustments</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Incurred</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Cost of closing redundant facilities
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">12,168</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(1,753</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">351</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">10,766</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">31,901</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">42,667</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">977</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(8</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">969</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,387</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,356</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">13,145</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(1,761</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">351</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">11,735</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">33,288</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">45,023</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Accrued restructuring charges of $11.7 million at February 27, 2009 include $7.2 million
recorded in accrued restructuring, current and $4.5 million related to long-term facilities
obligations recorded in accrued restructuring, non-current in the accompanying condensed
consolidated balance sheets. We expect to pay these liabilities through fiscal 2011. At November
28, 2008, accrued restructuring charges of $13.1 million included $6.9 million recorded in accrued
restructuring, current and $6.2 million related to long-term facilities obligations recorded in
accrued restructuring, non-current in the accompanying condensed consolidated balance sheets.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Included in the other adjustments column is a change to previous estimates of $0.4 million
offset by a small foreign currency translation adjustment.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 11 - adbe:NetIncomePerShareFollowingTableSetsForthComputationOfBasicAndDilutedNetIncomePerShareForThreeMonthsEndedAndInThousandsExceptPerShareDataTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
<TD colspan="13">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 11. NET INCOME PER SHARE</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The following table sets forth the computation of basic and diluted net income per share for
the three months ended February 27, 2009 and February 29, 2008 (in thousands, except per share
data):
</DIV></TD>
</TR>
<!-- End Table Body -->
<TR style="font-size: 10pt">
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Net income
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">156,435</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">219,379</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Shares used to compute basic net income per share
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">524,268</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">561,113</TD>
<TD> </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Dilutive potential common shares:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Unvested restricted stock and performance share awards
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">854</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">680</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Stock options
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,708</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,466</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Shares used to compute diluted net income per share
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">527,830</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">571,259</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Basic net income per share
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">0.30</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">0.39</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Diluted net income per share
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">0.30</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">0.38</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> For the three months ended February 27, 2009, options to purchase approximately 32.2 million
shares of common stock with exercise prices greater than the average fair market value of our stock
of $20.98 were not included in the calculation because the effect would have been anti-dilutive.
Comparatively, for the three months ended February 29, 2008, options to purchase approximately 15.5
million shares of common stock with exercise prices greater than the average fair market value of
our stock of $38.22 were not included in the calculation because the effect would have been
anti-dilutive.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 2 - adbe:FinancialInstrumentsTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 2. FINANCIAL INSTRUMENTS</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We measure certain financial assets and liabilities at fair value on a recurring basis,
including cash equivalents, available-for-sale fixed income and equity securities, other equity
securities and foreign currency derivatives. The fair value of these financial assets and
liabilities was determined using the following inputs at February 27, 2009 (in thousands):
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="52%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Fair Value Measurements at Reporting Date Using</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Quoted Prices in</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Significant</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Active Markets</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Other</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Significant</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>for</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Observable</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Unobservable</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Identical Assets</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Inputs</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Inputs</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 1)</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 2)</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 3)</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Assets:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Money market funds and overnight deposits<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP>
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,025,810</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,025,810</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Fixed income available-for-sale securities<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,263,366</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,263,366</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Available-for-sale
equity securities<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,399</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,399</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Investments of limited partnership<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">33,192</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">279</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">32,913</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign currency derivatives<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">29,009</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">29,009</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Deferred compensation plan assets<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Money market funds
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">772</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">772</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Equity and fixed income mutual funds
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,281</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,281</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Subtotal for deferred compensation plan assets
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,053</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">772</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,281</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">2,362,829</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,030,260</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,299,656</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">32,913</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Liabilities:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign currency derivatives<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">965</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">965</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">965</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">965</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The fair value of these financial assets and liabilities was determined using the following
inputs at November 28, 2008 (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="52%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Fair Value Measurements at Reporting Date Using</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Significant</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Quoted Prices in</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Other</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Significant</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Active Markets for</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Observable</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Unobservable</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Identical Assets</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Inputs</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Inputs</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 1)</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 2)</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(Level 3)</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Assets:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Money market funds and overnight deposits<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP>
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">722,742</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">722,742</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Fixed income available-for-sale securities<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,175,732</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,175,732</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
Available-for-sale equity securities<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,047</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,047</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Investments of limited partnership<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">39,004</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">251</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">38,753</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign currency derivatives<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">49,848</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">49,848</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Deferred compensation plan assets<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Money market funds
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">704</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">704</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Equity and fixed income mutual funds
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,856</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,856</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Subtotal for deferred compensation plan assets
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,560</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">704</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,856</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,997,933</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">726,744</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,232,436</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">38,753</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Liabilities:
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign currency derivatives<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,739</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,739</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,739</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">1,739</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
<TD> </TD>
<TD>Included in cash and cash equivalents on our condensed consolidated balance
sheets.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
<TD> </TD>
<TD>Included in either cash and cash equivalents or short-term investments on our
condensed consolidated balance sheets.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
<TD> </TD>
<TD>Included in short-term investments on our condensed consolidated balance sheets.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
<TD> </TD>
<TD>Included in other assets on our condensed consolidated balance sheets.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
<TD> </TD>
<TD>Included in prepaid expenses and other assets on our condensed consolidated balance
sheets.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
<TD> </TD>
<TD>Included in accrued expenses on our condensed consolidated balance sheets.</TD>
</TR>
</TABLE>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Fixed
income available-for-sale securities include United States (“U.S.”) treasury securities,
Agency or U.S. Government guaranteed securities (86% of total), corporate bonds (9% of
total) and obligations of foreign governments and their agencies (5% of total).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The investments of limited partnership relate to our interest in Adobe Ventures IV L.P.
(“Adobe Ventures”), which are consolidated in our condensed consolidated financial
statements. The Level 1 investments of limited partnership relate to investments in
publicly-traded companies and the Level 3 investments relate to investments in
privately-held companies. These investments are remeasured at fair value each period
with any gains or losses recognized in investment gains (losses), net in our condensed
consolidated statements of income. We estimated fair value of the Level 3 investments
by considering available information such as pricing in recent rounds of financing,
current cash positions, earnings and cash flow forecasts, recent operational
performance and any other readily available market data.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> A reconciliation of the beginning and ending balances for investments of limited partnership
using significant unobservable inputs as of February 27, 2009 and November 28, 2008 was as follows
(in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="88%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Balance as of November 28, 2008
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">38,753</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Purchases and sales of investments, net
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(603</TD>
<TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Unrealized investment losses included in earnings
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">(5,237</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Balance as of February 27, 2009
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">32,913</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Investment gains and losses of our limited partnership are included in our condensed
consolidated statements of income as a component of investment gain (loss). <I>See Note 4 for further
information regarding our limited partnership interest in Adobe Ventures.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We also have direct investments in privately-held companies accounted for under the
cost method, which are periodically assessed for other-than-temporary impairment. If
we determine that an other-than-temporary impairment has occurred, we write-down
the investment to its fair value. We estimated fair value of our cost method investments
considering available information such as pricing in recent rounds of financing, current
cash positions, earnings and cash flow forecasts, recent operational performance and
any other readily available market data. During the first quarter of 2009, we determined
that certain of our cost method investments were other-than-temporarily impaired
which resulted in a charge of $10.6 million included in investment gains (losses), net in
the condensed consolidated statements of income. The fair value of cost method
investments that were impaired was estimated using Level 3 inputs.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In countries outside the U.S., we transact business, in U.S. dollars and in various other
currencies. In Europe and Japan, transactions that are denominated in Euro and Yen are subject to
exposure from movements in exchange rates. We may use foreign exchange option contracts or forward
contracts to hedge operational (“cash flow”) exposures
resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, may have
maturities between one and twelve months. We enter into these foreign
exchange contracts to hedge a portion of our forecasted foreign
currency denominated revenue in the normal course of business and accordingly, they are not speculative in
nature.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We record changes in the intrinsic value of these cash flow hedges in accumulated other
comprehensive income (loss), until the forecasted transaction occurs. When the forecasted
transaction occurs, we reclassify the related gain or loss on the cash flow hedge to revenue. In
the event the underlying forecasted transaction does not occur, or it becomes probable that it will
not occur, we reclassify the gain or loss on the related cash flow hedge from accumulated other
comprehensive income (loss) to interest and other income, net on our condensed consolidated
statement of income at that time.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We also hedge our net recognized foreign currency assets and liabilities with foreign exchange
forward contracts to reduce the risk that our earnings and cash flows will be adversely affected by
changes in exchange rates. These derivative instruments hedge assets and liabilities that are
denominated in foreign currencies and are carried at fair value with changes in the fair value
recorded to interest and other income, net on our condensed consolidated statement of income. These
derivative instruments do not subject us to material balance sheet risk due to exchange rate
movements because gains and losses on these derivatives are intended to offset gains and losses on
the assets and liabilities being hedged.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We mitigate concentration of risk related to foreign currency hedges as well as interest
rate hedges through a policy that establishes counterparty limits. The bank
counterparties in these contracts expose us to credit-related losses in the event of their
nonperformance. However, to mitigate that risk, we only contract with counterparties
who meet our minimum requirements under our counterparty risk assessment process. In
addition, our hedging policy establishes maximum limits for each counterparty. We
monitor ratings, credit spreads and potential downgrades on at least a quarterly basis.
Based on our on-going assessment of counterparty risk, we will adjust our exposure to
various counterparties.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The fair value of derivative instruments in our condensed consolidated balance sheets as of
February 27, 2009 was as follows (in thousands):
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="42%"> </TD>
<TD width="5%"> </TD>
<TD width="12%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="10%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Fair Values of Derivative Instruments</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="4" style="border-bottom: 1px solid #000000"><B>Asset Derivatives</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="4" style="border-bottom: 1px solid #000000"><B>Liability Derivatives</B></TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center"><B>Balance Sheet</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center"><B>Balance Sheet</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Location</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fair Value</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Location</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fair Value</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Derivatives designated as
hedging instruments:
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign exchange option contracts
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom">Prepaid expense and other assets</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">25,213</TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom">Accrued expenses</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Derivatives not designated as
hedging instruments:
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Foreign exchange forward
contracts
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom">Prepaid expense and other assets</TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">3,796</TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom">Accrued expenses</TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(965</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Total derivatives
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">29,009</TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD nowrap align="left">$</TD>
<TD align="right">(965</TD>
<TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left" valign="bottom"> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The
effect of derivative instruments designated as cash flow hedges on our condensed consolidated statement of income for the
three months ended February 27, 2009 was as follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Gain (Loss)</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Gain (Loss)</B></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Gain (Loss)</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD><B>Derivatives in Cash Flow Hedging
Relationships</B>
<DIV style="font-size: 1px; border-bottom: 1px solid #00000; width: 45%">
</DIV></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Recognized</B> <SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Reclassified</B> <SUP style="font-size: 85%; vertical-align: text-top"><B>(2)</B></SUP></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Recognized</B> <SUP style="font-size: 85%; vertical-align: text-top"><B>(3)</B></SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign exchange option contracts
</DIV></TD>
<TD> </TD>
<TD nowrap align="right">$</TD>
<TD align="right">(5,450</TD>
<TD nowrap>)</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$</TD>
<TD align="right">20,476</TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="right">$</TD>
<TD align="right">(1,632</TD>
<TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
<TD> </TD>
<TD>Amount recognized in OCI (effective portion).</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
<TD> </TD>
<TD>Amount of gain (loss) reclassified from accumulated OCI into income (effective
portion) located in revenue.</TD>
</TR>
<TR style="font-size: 3pt">
<TD> </TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
<TD> </TD>
<TD>Amount of gain (loss) recognized in income on derivative (ineffective portion and
amount excluded from effectiveness testing) located in interest and other income, net.</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The effect of derivative instruments not designated as hedges on our condensed consolidated
statement of income for the three months ended February 27, 2009 was as follows (in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="17%"> </TD>
<TD width="3%"> </TD>
<TD width="1%"> </TD>
<TD width="3%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="3"><B>Gain (Loss)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD><B>Derivatives Not Designated as Hedging
Instruments</B>
<DIV style="font-size: 1px; border-bottom: 1px solid #00000; width: 45%">
</DIV></TD>
<TD> </TD>
<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Recognized</B>
<SUP style="font-size: 85%; vertical-align: text-top"><B>(*)</B></SUP></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Foreign exchange forward contracts
</DIV></TD>
<TD> </TD>
<TD nowrap align="right">$</TD>
<TD align="right">(3,245</TD>
<TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(*)</SUP></TD>
<TD> </TD>
<TD>Amount of gain (loss) recognized in income located in interest and other income,
net.</TD>
</TR>
</TABLE>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 13 - adbe:CreditAgreementTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 13. CREDIT AGREEMENT</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In August 2007, we entered into an Amendment to our Credit Agreement dated February 2007 (the
“Amendment”), which increased the total senior unsecured revolving facility from $500.0 million to
$1.0 billion. The Amendment also permits us to request one-year extensions effective on each
anniversary of the closing date of the original agreement, subject to the majority consent of the
lenders. We also retain an option to request an additional $500.0 million in commitments, for a
maximum aggregate facility of $1.5 billion.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In February 2008, we entered into a Second Amendment to the Credit Agreement dated February
26, 2008, which extended the maturity date of the facility by one year to February 16, 2013. The
facility would terminate at this date if no additional extensions have been requested and granted.
All other terms and conditions remain the same.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The facility contains a financial covenant requiring us not to exceed a certain maximum
leverage ratio. At the Company’s option, borrowings under the facility accrue interest based on
either the London interbank offered rate (“LIBOR”) for one, two, three or six months, or longer
periods with bank consent, plus a margin according to a pricing grid tied to this financial
covenant, or a base rate. The margin is set at rates between 0.20% and 0.475%. Commitment fees are
payable on the facility at rates between 0.05% and 0.15% per year based on the same pricing grid.
The facility is available to provide loans to us and certain of our subsidiaries for general
corporate purposes. As of both February 27, 2009 and November 28, 2008, the amount outstanding
under the credit facility was $350.0 million, which is included in long-term liabilities on our
condensed consolidated balance sheets. As of February 27, 2009, we were in compliance with all of
the covenants.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 4 - adbe:OtherAssetsTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 4. OTHER ASSETS</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Other assets as of February 27, 2009 and November 28, 2008 consisted of the following (in
thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Acquired rights to use technology
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">88,572</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">90,643</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Investments
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">61,178</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">76,589</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Security and other deposits
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15,779</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">16,087</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Deferred compensation plan assets
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8,053</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,560</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Prepaid royalties
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,646</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,026</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Restricted cash
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,359</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,361</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Prepaid land lease
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,176</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,185</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Prepaid rent
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,251</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">2,658</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">Other
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,133</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,420</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Total other assets
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">197,147</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">216,529</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Included in investments are our indirect investments through our limited partnership interest
in Adobe Ventures, which is consolidated in accordance with FIN No. 46R, a revision to FIN No. 46,
“Consolidation of Variable Interest Entities.” The partnership is controlled by Granite Ventures,
an independent venture capital firm and sole general partner of Adobe Ventures. <I>See Note 2 for
further information regarding Adobe Ventures.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Also included in investments are our direct investments in privately-held companies which are
accounted for based on the cost method. We assess these investments for impairment in value as
circumstances dictate.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We entered into a Purchase and Sale Agreement, effective May 12, 2008, for the acquisition of
real property located in Waltham, Massachusetts. We will purchase the property subject to
completion of construction of an office building shell and core, parking structure and site
improvements. The purchase price for the property will be $44.7 million. We made an initial deposit
of $7.0 million which is included in security and other deposits. This deposit will be held in
escrow until closing and then applied to the purchase price. Closing is expected to occur in May
2009 and the remaining balance is due at such time.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 15 - adbe:SegmentsTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 15. SEGMENTS</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We have the following reportable segments: Creative Solutions, Knowledge Worker, Enterprise,
Platform and Print and Publishing. Our Creative Solutions segment focuses on delivering a complete
professional line of integrated tools for a full range of creative and developer tasks to an
extended set of customers. The Knowledge Worker segment focuses on the needs of knowledge worker
customers, providing essential applications and services to help them share information and
collaborate. This segment contains revenue generated by Acrobat Connect and our Acrobat family of
products. Our Enterprise segment provides server-based enterprise interaction solutions that
automate people-centric processes and contains revenue generated by our LiveCycle line of products.
The Platform segment includes client and developer technologies, such as Adobe Flash Player, Adobe
Flash Lite, Adobe AIR, Adobe Flex and Adobe Flex Builder, and also encompasses products and
technologies created and managed in other Adobe segments. Finally, the Print and Publishing segment
addresses market opportunities ranging from the diverse publishing needs of technical and business
publishing, to our legacy type and original equipment manufacturer (“OEM”) printing businesses.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Effective in the first quarter of fiscal 2009, our former Mobile and Devices Solutions
segment, was integrated into our Platform business unit to better align our engineering and
marketing efforts and will be reported as part of the Platform
segment. Prior year information in the table below has been
reclassified to reflect the integration of
these business units.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We
report segment information based on the “management” approach. The management
approach designates the internal reporting used by management for making decisions and assessing
performance as the source of our reportable segments.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Our chief operating decision maker reviews revenue and gross margin information for each of
our reportable segments. Operating expenses are not reviewed on a segment by segment basis. In
addition, with the exception of goodwill and intangible assets, we do not identify or allocate our
assets by the reportable segments.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="28%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Creative</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Knowledge</B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"><B>Print and</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2"> </TD>
<TD> </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD nowrap align="left" style="border-bottom: 0px solid #000000">(in thousands)</TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Solutions</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Worker</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Enterprise</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Platform*</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Publishing</B></TD>
<TD> </TD>
<TD> </TD>
<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
<TD> </TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
<TD nowrap>
<DIV style="margin-left:15px; text-indent:-15px"><B>Three months ended February 27, 2009</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Revenue
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">460,728</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">163,130</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">63,855</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">52,299</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">46,378</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">786,390</TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Cost of revenue
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">42,750</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,921</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">13,341</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,056</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">5,285</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">77,353</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Gross profit
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">417,978</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">153,209</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">50,514</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">46,243</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">41,093</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">709,037</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Gross profit as a percentage of revenue
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">91</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">94</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">79</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">88</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">89</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">90</TD>
<TD nowrap>%</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD nowrap>
<DIV style="margin-left:15px; text-indent:-15px"><B>Three months ended February 29, 2008</B>
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Revenue
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">543,475</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">195,535</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">54,164</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">43,344</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">53,927</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">890,445</TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Cost of revenue
</DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">36,048</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">11,681</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">16,991</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,964</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,791</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">82,475</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Gross profit
</DIV></TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">507,427</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">183,854</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">37,173</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">33,380</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">46,136</TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$</TD>
<TD align="right">807,970</TD>
<TD> </TD>
</TR>
<TR style="font-size: 1px">
<TD>
<DIV style="margin-left:15px; text-indent:-15px">
</DIV></TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
<TD> </TD>
<TD nowrap colspan="2" align="right" style="border-top: 3px double #000000"> </TD>
<TD> </TD>
</TR>
<TR valign="bottom">
<TD>
<DIV style="margin-left:30px; text-indent:-15px">Gross profit as a percentage of revenue
</DIV></TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">93</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">94</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">69</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">77</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">86</TD>
<TD nowrap>%</TD>
<TD> </TD>
<TD nowrap align="left"> </TD>
<TD align="right">91</TD>
<TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">
</DIV>
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD>
</TR>
<TR valign="top">
<TD nowrap align="left">*</TD>
<TD> </TD>
<TD>Platform revenue includes revenue related to our Mobile client products of $26.1 million and
$15.2 million for the three months ended February 27, 2009 and February 29, 2008, respectively, or
50% and 35% of Platform revenues, respectively.</TD>
</TR>
</TABLE>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 1 - adbe:SummaryOfSignificantAccountingPoliciesTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B></B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B></B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We have prepared the accompanying unaudited condensed consolidated financial statements
pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Pursuant to these rules and regulations, we have condensed or omitted certain information and
footnote disclosures we normally include in our annual consolidated financial statements prepared
in accordance with accounting principles generally accepted in the United States of America
(“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal,
recurring adjustments, except as otherwise indicated) necessary to fairly present our financial
position, results of operations and cash flows. Our interim period operating results do not
necessarily indicate the results that may be expected for any other interim period or for the full
fiscal year. These financial statements and accompanying notes should be read in conjunction with
the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the
fiscal year ended November 28, 2008 on file with the SEC.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> There have been no material changes in our significant accounting policies, as compared to the
significant accounting policies described in our Annual Report on Form 10-K for the fiscal year
ended November 28, 2008.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Recent Accounting Pronouncements</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> With the exception of those discussed below, there have been no recent accounting
pronouncements or changes in accounting pronouncements during the three months ended February 27,
2009, as compared to the recent accounting pronouncements described in our Annual Report on Form
10-K for the fiscal year ended November 28, 2008, that are of significance, or potential
significance, to us.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In December 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position
(“FSP”) No. 140-4 and FASB Interpretation (“FIN”) FIN 46R-8 (“FSP 140-4 and FIN 46R-8”),
“Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in
Variable Interest Entities.” FSP 140-4 and FIN 46R-8 require additional disclosures about transfers
of financial assets and involvement with variable interest entities. The requirements apply to
transferors, sponsors, servicers, primary beneficiaries and holders of significant variable
interests in a variable interest entity or qualifying special purpose
entity. FSP 140-4 and FIN 46R-8 was effective for us in the first quarter of fiscal 2009.
However, no additional significant disclosures were required and the adoption did not impact our
consolidated financial position, results of operations or cash flows.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In September 2008, the FASB issued FSP No. 133-1 and FIN 45-4 (“FSP FAS 133-1 and FIN 45-4”),
“Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Financial
Accounting Standard (“SFAS”) No. 133 and FIN No. 45; and Clarification of the Effective Date of
SFAS No. 161.” FSP FAS 133-1 and FIN 45-4 amends SFAS No. 133 (“SFAS 133”), “Accounting for
Derivative Instruments and Hedging Activities,” to require disclosures by sellers of credit
derivatives, including credit derivatives embedded in hybrid instruments. FSP FAS 133-1 and FIN
45-4 also amend FIN No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness to Others,” to require additional
disclosure about the current status of the payment/performance risk of a guarantee. The provisions
of the FSP that amend SFAS 133 and FIN 45 are effective for reporting periods ending after November
15, 2008. FSP FAS 133-1 and FIN 45-4 also clarifies the effective date in SFAS No. 161 (“SFAS
161”), “Disclosures about Derivative Instruments and Hedging Activities.” We adopted the
disclosures required by SFAS 161 in the first quarter of fiscal 2009. Since FSP FAS 133-1 and FIN
45-4 only required additional disclosures, the adoption did not impact our consolidated financial
position, results of operations or cash flows.
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In April 2008, the FASB issued FSP No. 142-3 (“FSP 142-3”), “Determination of the Useful Life
of Intangible Assets.” FSP 142-3 amends the factors an entity should consider in developing
renewal or extension assumptions used in determining the useful life of recognized intangible
assets under SFAS No. 142, “Goodwill and Other Intangible Assets.” This new guidance applies
prospectively to intangible assets that are acquired individually or with a group of other assets
in business combinations and asset acquisitions. FSP 142-3 is effective for financial statements
issued for fiscal years and interim periods beginning after December 15, 2008. FSP 142-3 is
effective for us beginning in the second quarter of fiscal 2009. Early adoption is prohibited.
Since this guidance will be applied prospectively, on adoption, there will be no impact to our
current consolidated financial statements.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In March 2008, the FASB issued SFAS 161 which requires companies with derivative instruments
to disclose information that should enable financial statement users to understand how and why a
company uses derivative instruments, how derivative instruments and related hedged items are
accounted for under SFAS 133 and how derivative instruments and related hedged items affect a
company’s financial position, financial performance and cash flows. We adopted SFAS 161 in the
first quarter of fiscal 2009. Since SFAS 161 only required additional disclosure, the adoption did
not impact our consolidated financial position, results of operations or cash flows.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), “Fair Value Measurements,” which
defines fair value, establishes guidelines for measuring fair value and expands disclosures
regarding fair value measurements. SFAS 157 does not require any new fair value measurements but
rather eliminates inconsistencies in guidance found in various prior accounting pronouncements and
is effective for fiscal years beginning after November 15, 2007. Effective November 29, 2008, we adopted SFAS 157 for all nonfinancial assets and nonfinancial
liabilities measured at fair value on a non-recurring basis. Examples
include goodwill, intangibles, and other Long-lived assets. The adoption of SFAS 157 did not have a material impact on our consolidated financial
position, results of operations or cash flows.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141R”), “Business
Combinations” and SFAS No. 160 (“SFAS 160”), “Noncontrolling Interests in Consolidated Financial
Statements, an amendment of Accounting Research Bulletin No. 51.” SFAS 141R will change how
business acquisitions are accounted for and will impact financial statements both on the
acquisition date and in subsequent periods. SFAS 160 will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests and classified as a
component of equity. SFAS 141R and SFAS 160 are effective for us beginning in the first quarter of
fiscal 2010. Early adoption is not permitted. We are currently evaluating the impact that SFAS 141R
and SFAS 160 will have on our consolidated financial statements.
</DIV>
</DIV>
</BODY>
</HTML>
<HTML>
<HEAD></HEAD>
<BODY>
<!-- Begin Block Tagged Note 9 - adbe:StockholdersEquityTextBlock-->
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 9. STOCKHOLDERS’ EQUITY</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Stock Repurchase Program I</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> To facilitate our stock repurchase program, designed to return value to our stockholders and
minimize dilution from stock issuances, we repurchase shares in the open market and also enter into
structured repurchases with third parties.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> We did not enter into any new structured repurchase agreements during the three months ended
February 27, 2009. During the three months ended February 29, 2008, we entered into several
structured repurchase agreements with large financial institutions, whereupon we provided the
financial institutions with prepayments of $150.0 million. We entered into these agreements in
order to take advantage of repurchasing shares at a guaranteed discount to the Volume Weighted
Average Price (“VWAP”) of our common stock over a specified period of time. We only enter into such
transactions when the discount that we receive is higher than the foregone return on our cash
prepayments to the financial institutions. There were no explicit commissions or fees on these
structured repurchases. Under the terms of the agreements, there is no requirement for the
financial institutions to return any portion of the prepayment to us.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> The financial institutions agree to deliver shares to us at monthly intervals during the
contract term. The parameters used to calculate the number of shares deliverable are: the total
notional amount of the contract, the number of trading days in the contract, the number of trading
days in the interval and the average VWAP of our stock during the interval less the agreed upon
discount. During the three months ended February 27, 2009, we repurchased approximately 5.0 million
shares at an average price of $22.79 through structured repurchase agreements entered into during
fiscal 2008. During the three months ended February 29, 2008, we repurchased 6.7 million shares at
an average price of $36.78 through structured repurchase agreements which included prepayments from
fiscal 2007.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> As of February 27, 2009 and November 28, 2008, the prepayments were classified as treasury
stock on our balance sheets at the payment date, though only shares physically delivered to us by
February 27, 2009 are excluded from the denominator in the computation of earnings per share. As of
February 27, 2009 and February 29, 2008, approximately $19.7 million and $325.8 million,
respectively, of up-front payments remained under the agreements. All outstanding structured
repurchase agreements as of February 27, 2009 under this program
expired on March 19,
2009.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Stock Repurchase Program II</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> Under this stock repurchase program, we had authorization to repurchase 50.0 million shares of
our common stock. From the inception of the 50.0 million share authorization under this program, we
provided prepayments of $1.9 billion under structured share repurchase agreements to large
financial institutions. During the third quarter of fiscal 2008, the remaining authorized number of
shares were repurchased.
</DIV>
<P align="center" style="font-size: 10pt">
<!-- Folio -->
<!-- /Folio -->
</DIV>
<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">
<B>
</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"> During the first quarter of fiscal 2008, we provided prepayments of $1.0 billion and
repurchased 26.6 million shares through structured share repurchase agreements at an average price
of $37.56. As of February 29, 2008, approximately $133.3 million of up-front payments remained
under these agreements and were utilized during the remainder of fiscal 2008.
</DIV>
</DIV>
</BODY>
</HTML>
35690000
18352000
6214000
6995000
207239000
207239000
-9493000
15784000
137954000
104124000
-14400000
-9201000
N/A
false
--11-27
2009-02-27
10-Q
0000796343
523737172
Yes
Large Accelerated Filer
20399247623
ADOBE SYSTEMS INCORPORATED
No
Yes
55840000
41416000
467234000
300048000
27136000
33107000
399969000
345677000
57222000
25095000
2396819000
2352383000
4128000
5796000
17099000
15392000
5821598000
5887596000
2735103000
2868991000
946422000
1032733000
886450000
1148925000
86311000
262475000
0.0001
0.0001
900000000
900000000
600834000
600834000
526111000
524095000
61000
61000
59805000
58918000
82475000
77353000
22670000
18435000
35844000
26518000
243964000
198313000
31356000
26973000
110713000
81125000
117328000
114603000
69202000
68740000
0.39
0.3
0.38
0.3
4752000
-381000
0
2711000
0
84000
0
-84000
214960000
181468000
99000
3157000
8732000
-17246000
82929000
74051000
2134730000
2132375000
807970000
709037000
295644000
203162000
12894000
4631000
76265000
46727000
-2906000
-14424000
24090000
4465000
-16733000
-53098000
5350000
-50034000
4565000
7859000
25103000
164484000
-1809000
-792000
0
892000
1411244000
1276436000
5821598000
5887596000
762599000
636865000
123182000
120289000
350000000
350000000
-646512000
28675000
328771000
-131562000
399300000
365743000
219379000
156435000
20213000
-4754000
532539000
501121000
275431000
207916000
1716000
1567000
216529000
197147000
274000
-16656000
20565000
20711000
13290000
13284000
-1150022000
-13000
-26268000
-15916000
-224645000
-435171000
0.0001
0.0001
2000000
2000000
0
0
0
0
450000000
0
197379000
137900000
6847000
1394000
389858000
189432000
53510000
28604000
313037000
300376000
-224000
2701000
168485000
149917000
1431000
12270000
4913406000
5069840000
890445000
786390000
851962000
742199000
38483000
44191000
262595000
249491000
43034000
45618000
1132752000
1234769000
4410354000
4611160000
74723000
76739000
-2957154000
-2836219000
571259000
527830000
561113000
524268000