Adobe Systems Incorporated October, Adobe Systems Incorporated. All Rights Reserved.

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1 Adobe Systems Incorporated October, 2009

2 Financial Disclaimer Adobe Systems Incorporated October, 2009 Some of the information discussed in this presentation contains forward looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of the risks and uncertainties, you should review Adobe s SEC filings, including the annual report on Form 10K for fiscal year 2008 and the quarterly reports on Form 10Q filed by the company in In this presentation, we may discuss nongaap financial measures. GAAP financial measures that correspond to such nongaap measures, as well as the reconciliation between the two, are available on our website at Adobe does not undertake an obligation to update forwardlooking statements. Diverse Customer Base Spans From Consumer to Enterprise Creative Solutions Omniture Adobe revolutionizes how the world engages with ideas and information Knowledge Worker Enterprise Platform Print and Publishing Key Market Trends Key Market Trends How people use software is changing Revolutionary changes in the publishing industry How software is developed is changing Global opportunities are accelerating CONTENT TO CONTENT+ APPLICATIONS

3 Key Market Trends Adobe s Growth Rich Internet Applications CREATION TO CREATION+ OPTIMIZATION ADDRESSABLE MARKETS Adobe Revenue $2B $3B Interactive Media/ Websites Electronic Documents $500M Publishing The Next Wave of Growth: Engaging Experiences The Next Wave of Growth: Monetizing the Flash Platform $5B+ Adobe Revenue $3B Rich Internet Applications Interactive Media/ Websites Engaging Experiences MULTISCREEN CONTENT AND APPLICATIONS Engaging Experiences $2B TOOLS & FRAMEWORK SERVERS & SERVICES CLIENTS Electronic Documents $500M Publishing Adobe Flash Platform Flash is the Standard for Engaging PC Experiences Multiscreen Content and Applications 98% of PCs have Flash Player ~250M AIR Installs TOOLS FRAMEWORK SERVERS SERVICES CLIENTS FLASH PLATFORM Flash Professional Flash Catalyst Flash Builder Creative Suite Flex Flash Media Server Family LiveCycle ColdFusion Flash Platform Services Analytics & Optimization Flash Player AIR Approximately 75% of online videos are viewed using Adobe Flash technology More than one million designers and developers utilize Adobe Flash to deliver expressive content and applications that run consistently across the widest reach of browsers, operating systems, and devices Source: NPD, Adobe Enables the delivery of nextgeneration rich Internet experiences Combines the reach of the web with the power of the desktop Built on industry standards Content and applications created using Adobe tools

4 Enabling Innovation on the Web with Flash Achieving Multiscreen Consistency Singular experience, Multiple devices Rich Ads Online Video Enterprise RIAs Casual Games OSP Partners Mobile Platform Support For Flash Flash Opportunities With Netbooks Flash Opportunities in the Digital Home Web Browsing TV Experience 3 rd Party Applications

5 Multiscreen Platform Leads To Developer Acquisition Multiscreen Platform Leads To Developer Acquisition Traditional Designers Interactive Designers Developers Java TRADITIONAL DEVELOPERS C++ C# PHP Python 9 MILLION DEVELOPERS 5 MILLION DEVELOPERS Presentation Tier Flash + HTML Business Logic Java, PHP Application Servers J2EE Presentation Tier Flash + Silverlight + HTML Business Logic C# Application Servers.Net Server Data Systems SAP, Oracle, MySQL, SQL Server Source: EDC Adobe Technology to Deliver Engaging Experiences Creative Solutions ENTERPRISES & GOVERNMENT PUBLISHERS, SYNDICATORS, ADVERTISERS & MERCHANDISERS Creatives Publishers, Advertisers, Syndicators & Merchandisers LiveCycle Acrobat Connect Pro Scene7 Flash Media Server Family (Pending Acquisition) KNOWLEDGE WORKERS Acrobat.com, elearning Suite, + Technical Communication Acrobat Suite APPLICATION DEVELOPERS Flash Builder Flash Catalyst Flex CREATIVE PROFESSIONALS ADOBE PLATFORM TECHNOLOGIES FLASH PLATFORM SERVICES PDF POSTSCRIPT Adobe Creative Suite Customer Challenges

6 Creative Workflow Creative Suite and Flash Platform Enable the Creative Workflow CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE Optimizing the lifetime value of content. All content. Adobe Creative Suite Photoshop Family of Products Creative Suite 5 Will Further Enhance the Creative Workflow CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE Key Focus Areas Interactivity Multiscreen Cloudbased services Photoshop Photoshop Extended Photoshop: The Cornerstone of the Creative Business Photoshop Lightroom Photoshop Elements Photoshop.com Flash Builder Flash Catalyst Device Central Kindle, iphone, Smartphones, TVs CS Review In Context Editing Browser Lab ADOBE Adobe STORY Story Creative Suite 5 Optimism Enhancing Delivery in the Creative Workflow CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE Pentup demand Creative Suite PC hardware refresh Enterprise market focus Windows 7 Enhanced Suite configurations NEW New features 64bit Snow Leopard New subscription options New services NVIDIA GPU optimization Education market focus Flash Media Server Scene 7

7 Flash Media Server Scene7 CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE Industryleading rich media delivery platform for streaming video and realtime communication Use cases include usergenerated content, movies and TV shows, and corporate training video Flash Media Server Newest version supports dynamic streaming and HTTP delivery, and adds enhanced digital rights management for H.264 video and DVR functionality Licensed as an onpremise solution, or through CDN partners Dynamically delivers rich Creative Suite assets on demand to any channel of distribution Hundreds of customers in retail and manufacturing Scene 7 Recentlyadded video production and publishing capabilities, template publishing, and Web to Print abilities Expanding gotomarket capabilities globally Business Catalyst Completing the Creative Workflow with Omniture CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE CREATE ASSEMBLE MONETIZE/ TARGET DELIVER VIEW ANALYZE/ OPTIMIZE GUID Recent acquisition complements existing creative tools business Enables Web professionals to easily, rapidly and costeffectively create online businesses Hosted (SaaS) delivery model provides Website, ecommerce, marketing, analytics, customer database and incontext web site enhancement capabilities Adobe s tools and client reach help customers create and deliver engaging content and experiences The addition of Omniture will help customers measure, analyze and optimize those experiences creating a continuous feedback loop Omniture Optimizes Ad Spend and Site Conversion Omniture Customer Penetration Global Ad Spend Conversion MEDIA 5 of Top 10 Media Companies Landing Page RETAIL 6 of Top 10 Retailers Site Search FINANCE 4 of Top 5 Banks Recommendations TRAVEL 4 of Top 5 Travel Companies Visitors Merchandising Open Analytics Platform Pet Lovers Proud Parents Diet & Fitness Customers Behavioral Targeting TELECOM MANUFACTURING TECHNOLOGY AUTOMOTIVE 23 of the Wired 40 7 of the Top 10 Consumer Products Companies 6 of the Top 10 Business Week IT of Top 515 Top Automotive Travel Companies

8 Omniture Online Marketing Suite Business Productivity Solutions CMO DASHBOARDS Internet Search Ad Networks Ad Exchange Mobile VISITOR ACQUISITION SearchCenter CONVERSION Test&Target Survey SiteSearch Recommendations Merchandising ONLINE ANALYTICS SiteCatalyst Discover MULTI CHANNEL ANALYTICS Insight Insight Retail Insight Call Enterprise CRM Kiosks Call Center POS Video OPEN BUSINESS ANALYTICS PLATFORM DataWarehouse Genesis Teller Knowledge Workers Enterprise & Government ONLINE MARKETING SUITE Acrobat Acrobat.com Acrobat Connect Pro LiveCycle Market Opportunities and Growth Drivers Paper to Digital Opportunity Paper to Digital Collaboration Transforming Customer Interactions Last year, Americans spent nearly 10 billion hours filling out more than 8,000 different government forms that compares with roughly one billion hours spent on similar paperwork in NY Times Digital Information Created, Captured, Replicated Worldwide Most external and internal horizontal and vertical processes have a forms component. Eforms can yield significant savings over their paperbased counterparts The further development of reusable solutions and standards for eforms will accelerate adoption. Gartner, Exabytes Nearly 43% of individual tax returns filed in 2008 or 66.4 million were paper. IRS continues to pay millions to process paper tax returns. nextgov IDC, May Hype Cycle for the HighPerformance Workplace 2 IDC Digital Universe White Paper, Sponsored by EMC, May 2009 Collaboration Opportunity Transforming Customer Interactions Document Collaboration By moving collaboration from to workspaces for basic teambased document collaboration companies realize a number of benefits: increased worker efficiency, improved knowledge capture, more effective management of content, and increased social networking effect. Forrester Research, Inc., August 6, New Market Opportunity Driven by the Convergence of Two Worlds Customer Interaction Solutions Web Collaboration/Conferencing By 2011, Web Conferencing will be available to 75% of corporate users as a standard facility. Gartner, July Rich Internet Application Services Document Services Realtime Collaboration Enterprise Collaboration continues to be important for North American & European firms in these recessionary times, with more than 70% planning to invest in collaboration in Adobe can transform the way customers and enterprises do business using solutions to create interactive, multichannel experiences that incite action and dramatically improve business outcomes 1 The Forrester Wave : Collaboration Platforms, Q Magic Quadrant for Web Conferencing by David Mario Smith 3 The State of RealTime Collaboration In 2009: Conferencing Tools Are Hot Forrester Research, Inc., March 5,

9 Transforming Customer Interactions Customer Interaction Solutions Vertical Market Focus Government Financial Services Rich Internet Application Services Document Services Customer Interaction Solutions Analytics & Optimization Analytics & Optimization Source: Adobe Over $4 Billion Market Opportunity Media & Entertainment Healthcare Driving Acrobat Growth Driving Connect Growth Value Proposition Revenue Trend Moving Forward Communicate and collaborate more effectively and securely Increase productivity and save costs Inform and persuade with PDF Portfolios (Millions) Source: Adobe Target government & regulated industries Grow enterprise penetration with volume licensing Introduce hosted collaboration services into Acrobat workflows Transform PDF experiences from static to dynamic Value Proposition Provides crossplatform Web conferencing and realtime collaboration Leverages security model and ubiquitous reach of the Flash Player Offered as a hosted service or onpremise server deployment Revenue Trend Source: (Millions) Adobe Source: Adobe Moving Forward Fuel rich media experience with Flash Platform innovation Accelerate go tomarket through Conferencing Service Providers Deliver collaborationenabled business processes Driving LiveCycle Growth Diversified Routes to Market Adobe s GotoMarket Evolution Value Proposition Automate inefficient paperbased processes Generate personalized electronic documents Enable users of backend systems to have rich interactive experiences Enhance customer service Revenue Trend (Millions) Source: Adobe Moving Forward Deliver LiveCycle ES2 platform for building Customer Interaction Solutions Build out partner ecosystem and developer community Expand access and reach through mobile and cloud deployments OEM Shrinkwrap Volume Licensing Adobe.com Direct Enterprise Sales & SI Partners

10 Diversified Sources of Revenue Diversified Geographic Revenue 5% Ratable 12% Ratable Source: Adobe Source: Adobe Operating Expense and Operating Margin Summary Source: Adobe *See our Q3 FY2009 investor datasheet for a reconciliation between GAAP and NonGAAP results. For FY09 estimate, the nongaap financial measures exclude stock based and deferred compensation expense, restructuring charges and amortization of purchased intangibles. ** FY09 estimate based on Q4 financial targets. ** Positive market dynamics Large addressable markets Highvalue brand Worldclass products Diversified and leveraged business model Strong cash flow and operating margins

11 Adobe Systems Investor Relations Data Sheet Last Updated: September 15, 2009 Description Q1`06 Q2`06 Q3`06 Q4`06 FY2006 Q1`07 Q2`07 Q3`07 Q4`07 FY2007 Q1`08 Q2`08 Q3`08 Q4`08 FY2008 Q1`09 Q2`09 Q3`09 YTD FY2009 Revenue ($Millions) Total Revenue , , , ,188.6 Revenue by Segment ($Millions) Creative Solutions , , , ,272.8 Business Productivity Solutions , Platform Revenue Print & Publishing Revenue by Segment (as % of total revenue) Creative Solutions 58% 57% 55% 53% 56% 53% 59% 64% 63% 60% 61% 59% 56% 56% 58% 59% 58% 57% 58% Business Productivity Solutions 31% 31% 32% 33% 32% 33% 31% 27% 27% 29% 28% 29% 32% 30% 30% 29% 30% 30% 30% Platform 4% 4% 4% 5% 4% 5% 4% 4% 4% 4% 5% 6% 7% 8% 6% 7% 5% 7% 6% Print & Publishing 7% 8% 9% 9% 8% 9% 7% 5% 6% 7% 6% 6% 5% 6% 6% 5% 7% 6% 6% Supplementary Business Unit Data Knowledge Worker Revenue ($Millions) Enterprise Revenue ($Millions) Number of Server Transactions > $50,000 * * Based on LiveCycle, Flex, ColdFusion, Acrobat Connect and Flash Media Server transactions greater than $50,000 (excludes maintenance, support, and professional services) Mobile & Device Revenue ($Millions)** ** Effective FY2009, Mobile & Device revenue is included within reported Platform segment revenue Revenue by Geography ($Millions) Americas , , , EMEA , , Asia Revenue by Americas 48% 48% 52% 49% 49% 46% 51% 47% 47% 48% 45% 43% 48% 46% 46% 41% 45% 51% 46% Geography EMEA 32% 29% 27% 32% 30% 33% 28% 33% 35% 33% 36% 33% 33% 34% 34% 35% 31% 28% 31% (as % of total revenue) Asia 20% 23% 21% 19% 21% 21% 21% 20% 18% 19% 19% 24% 19% 20% 20% 24% 24% 21% 23% Supplementary Cost of Revenue Data ($Millions) Creative Solutions Knowledge Worker Enterprise Platform Print & Publishing Total StockBased and Deferred Compensation Expenses ($Millions) Direct Costs Research & Development Sales & Marketing General & Administrative Total Other Data Worldwide Employees 5,480 5,678 5,879 6,068 6,151 6,427 6,677 6,794 7,037 7,317 7,623 7,544 7,173 7,437 7,564 Days Sales Outstanding Trade Receivables Diluted Shares Outstanding Adobe provides this information as of the modification date above and makes no commitment to update the information subsequently. For a full explanation of this data, you are encouraged to review Adobe's Form 10K and 10Q SEC filings.

12 Adobe Systems Investor Relations Data Sheet Income Statement Reconciliation of NonGAAP to GAAP Last Updated: September 15, 2009 GAAP ($Millions, except EPS) Adjustments to Reconcile to NonGAAP ($Millions, except EPS) NonGAAP ($Millions, except EPS) Description Q1`06 Q2`06 Q3`06 Q4`06 FY2006 Q1`07 Q2`07 Q3`07 Q4`07 FY2007 Q1`08 Q2`08 Q3`08 Q4`08 FY2008 Q1`09 Q2`09 Q3`09 YTD FY2009 Revenue , , , ,188.6 Cost of revenue Gross profit , , , ,974.2 Operating expenses , , , ,437.3 Operating income , Nonoperating income (4.8) Income before income taxes , Provision for income taxes Net income Diluted Earnings per share $ 0.17 $ 0.20 $ 0.16 $ 0.30 $ 0.83 $ 0.24 $ 0.25 $ 0.34 $ 0.38 $ 1.21 $ 0.38 $ 0.40 $ 0.35 $ 0.46 $ 1.59 $ 0.30 $ 0.24 $ 0.26 $ 0.79 Cost of revenue Stockbased and deferred compensation (3.1) (2.4) (0.8) (1.9) (8.2) (1.2) (1.5) (1.5) (1.2) (5.4) (0.8) (1.2) (1.4) (0.8) (4.2) (0.1) (1.4) (0.6) (2.1) Amortization of purchased intangibles, technology license arrangements and incomplete technology (34.0) (34.2) (34.5) (34.7) (137.4) (27.9) (43.1) (28.7) (28.7) (128.4) (22.0) (24.0) (49.2) (22.0) (117.2) (14.4) (14.2) (13.9) (42.5) Total adjustments to cost of revenue (37.1) (36.6) (35.3) (36.6) (145.6) (29.1) (44.6) (30.2) (29.9) (133.8) (22.8) (25.2) (50.6) (22.8) (121.4) (14.5) (15.6) (14.5) (44.6) Operating expenses Stockbased and deferred compensation (43.4) (39.5) (41.8) (37.6) (162.3) (30.6) (38.1) (37.2) (38.6) (144.5) (42.2) (47.2) (46.8) (32.4) (168.6) (44.9) (41.9) (39.9) (126.7) Restructuring charges (19.0) (1.2) (20.2) (0.6) (0.6) (1.4) (1.2) (29.4) (32.0) (12.3) (3.5) (0.1) (15.9) Amortization of purchased intangibles, technology license arrangements and incomplete technology (22.9) (17.8) (20.0) (18.8) (79.5) (17.7) (18.9) (17.9) (17.9) (72.4) (17.1) (17.1) (33.8) (17.0) (85.0) (15.4) (15.3) (15.0) (45.7) Total adjustments to operating expenses (85.3) (58.5) (61.8) (56.4) (262.0) (48.3) (57.0) (55.7) (56.5) (217.5) (60.7) (64.3) (81.8) (78.8) (285.6) (72.6) (60.7) (55.0) (188.3) Nonoperating income 1.3 (2.7) 5.1 (65.0) (61.3) (5.6) (4.2) (7.2) (8.7) (9.5) (2.1) 3.9 (16.4) (0.6) 18.4 Taxes Revenue , , , ,188.6 Cost of revenue Gross profit , , , ,018.8 Operating expenses , , , ,249.1 Operating income , , Nonoperating income Income before income taxes , , , Provision for income taxes Net income , Diluted Earnings per share $ 0.32 $ 0.31 $ 0.29 $ 0.33 $ 1.24 $ 0.30 $ 0.37 $ 0.45 $ 0.49 $ 1.61 $ 0.48 $ 0.50 $ 0.50 $ 0.60 $ 2.07 $ 0.45 $ 0.35 $ 0.35 $ 1.14 Shares Diluted shares outstanding Reconciliation of Diluted Net Income Per Share, ($) GAAP net income per share Stockbased and deferred compensation Restructuring charges Amortization of purchased intangibles, technology license arrangements and incomplete technology Resolution of income tax audit (0.04) (0.04) R&D tax benefit (0.02) (0.02) Nonoperating income 0.01 (0.11) (0.10) (0.01) (0.01) (0.01) (0.02) (0.02) 0.01 (0.03) Income tax adjustments (0.05) (0.03) (0.05) (0.02) (0.14) (0.04) (0.04) (0.03) (0.04) (0.16) (0.03) (0.05) (0.05) (0.06) (0.20) (0.05) (0.04) (0.04) (0.12) NonGAAP net income per share GAAP operating margin 19.8% 23.3% 18.3% 24.0% 21.4% 22.5% 24.2% 30.0% 30.3% 27.2% 30.9% 29.3% 24.7% 29.8% 28.7% 26.4% 22.9% 24.0% 24.5% Stockbased and deferred compensation 7.1% 6.6% 7.1% 5.8% 6.6% 4.9% 5.3% 4.5% 4.4% 4.7% 4.8% 5.5% 5.4% 3.6% 4.8% 5.7% 6.1% 5.8% 5.9% Reconciliation of Restructuring and other charges 2.9% 0.2% 0.0% 0.0% 0.8% 0.0% 0.0% 0.1% 0.0% 0.0% 0.2% 0.0% 0.1% 3.2% 0.9% 1.6% 0.5% 0.0% 0.7% GAAP to NonGAAP Amortization of purchased intangibles, Operating Margin technology license arrangements and incomplete technology 8.7% 8.2% 9.0% 7.8% 8.4% 7.1% 8.3% 5.4% 5.0% 6.4% 4.4% 4.6% 9.5% 4.4% 5.7% 3.8% 4.2% 4.2% 4.1% NonGAAP operating margin 38.5% 38.3% 34.4% 37.6% 37.2% 34.5% 37.8% 40.0% 39.7% 38.3% 40.3% 39.4% 39.7% 41.0% 40.1% 37.5% 33.7% 34.0% 35.2% The above results are supplied to provide meaningful supplemental information regarding Adobe s core operating results because such information excludes amounts that are not necessarily related to its core operating results. Adobe uses this nongaap financial information in assessing the performance of the Company s ongoing operations, and for planning and forecasting in future periods. This nongaap information should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

13 FY2009 Business Segment Classifications Last Updated: June 16, 2009 Products Creative Solutions After Effects Audition Creative Suite Design Premium/Standard Creative Suite Master Collection Creative Suite Production Premium Creative Suite Web Premium/Standard Dreamweaver Encore Fireworks Flash Professional Flash Media Interactive Server Flash Video Streaming Service Illustrator InDesign Media Player Knowledge Worker Segment Acrobat Standard Acrobat Pro Acrobat Pro Extended OnLocation Photoshop Photoshop.com Photoshop Elements Photoshop Extended Photoshop Express Photoshop Lightroom Premiere Elements Premiere Express Premiere Pro Scene7 Soundbooth Ultra Visual Communicator Vlog It! Acrobat Connect Pro Adobe Document Center Acrobat.com Business Productivity Solutions Enterprise Segment LiveCycle Barcoded Forms ES LiveCycle Business Activity Monitoring ES LiveCycle Content Services ES LiveCycle Data Services ES LiveCycle Digital Signatures ES LiveCycle ES Connectors for ECM LiveCycle Forms ES LiveCycle Output ES LiveCycle PDF Generator ES LiveCycle PDF Generator 3D ES LiveCycle Process Management ES LiveCycle Production Print ES LiveCycle Reader Extensions ES LiveCycle Rights Management ES Platform BlazeDS Central Pro Output Server AIR Cold Fusion Flash Catalyst Output Pak for mysap.com Web Output Pak Flash Player Flex Flash Builder (formerly Flex Builder) Print & Publishing Flash Cast Flash Home Authorware Captivate Contribute Director Font Folio FrameMaker Freehand Jrun Flash Lite Flash Player SDK PageMaker PDF Print Engine PostScript Robohelp Shockwave Player Technical Communication Suite Type Adobe provides this information as of the modification date above and makes no commitment to update the information subsequently. For a full explanation of this data, you are encouraged to review Adobe's Form 10K and 10Q SEC filings.

14 Adobe Systems Investor Relations Data Sheet Historical Desktop Product Release Roadmap Last Updated: September 15, 2009 Product Q1`06 Q2`06 Q3`06 Q4`06 Q1`07 Q2`07 Q3`07 Q4`07 Q1`08 Q2`08 Q3`08 Q4`08 Q1`09 Q2`09 Q3`09 Acrobat Acrobat Connect 6.0 Pro After Effects 7.0 CS3 CS4 Audition Authorware Captivate Contribute 4.0 CS3 CS4 Creative Suite 2.3 CS3 3.3 CS4 Director Dreamweaver CS3 CS4 Encore 2.0 CS3 CS4 Fireworks CS3 CS4 Flash CS3 CS4 FrameMaker Illustrator CS3 CS4 InDesign CS3 CS4 Lightroom Photoshop CS3 CS4 Photoshop Extended CS3 CS4 Photoshop Elements Premiere Elements Premiere Pro 2.0 CS3 CS4 RoboHelp Soundbooth CS3 CS4 Technical Communication Suite Adobe provides this information as of the modification date above and makes no commitment to update the information subsequently. This desktop product release information corresponds to initial English version launch dates in the United States.

15 Adobe Systems Historical Investor Relations Data Sheet (PreAdobe/Macromedia integration) Last Updated: December 15, 2005 Description FY2000 Q1'01 Q2'01 Q3'01 Q4'01 FY2001 Q1'02 Q2'02 Q3'02 Q4'02 FY2002 Q1'03 Q2'03 Q3'03 Q4'03 FY2003 Q1`04 Q2'04 Q3'04 Q4'04 FY2004 Q1`05 Q2'05 Q3'05 Q4`05 FY2005 Total ($Millions) Revenue 1, , , , , ,966.3 Revenue By Segment ($Millions) Digital Imaging & Video Creative Professional Intelligent Documents OEM PostScript & Other Digital Imaging & Video 38% 39% 36% 36% 32% 36% 31% 41% 34% 34% 35% 32% 30% 27% 31% 30% 27% 25% 24% 27% 26% 23% 23% 20% 22% 22% Revenue By Creative Professional Segment (as % 36% 34% 30% 30% 34% 32% 33% 28% 30% 30% 30% 29% 29% 26% 30% 29% 37% 37% 37% 35% 37% 34% 37% 42% 38% 38% of total revenue) Intelligent Documents 16% 19% 26% 25% 25% 24% 28% 24% 28% 29% 27% 31% 34% 40% 33% 34% 31% 33% 34% 33% 32% 39% 36% 34% 36% 36% OEM PostScript & Other 10% 8% 8% 9% 9% 8% 8% 7% 8% 7% 8% 8% 7% 7% 6% 7% 5% 5% 5% 5% 5% 4% 4% 4% 4% 4% Revenue By Geography ($Millions) Americas EMEA Asia Revenue By Geography (as % of total revenue) Americas 52% 46% 46% 53% 48% 48% 46% 50% 55% 49% 50% 49% 49% 49% 50% 49% 43% 44% 48% 49% 46% 46% 49% 47% 49% 48% EMEA 26% 30% 23% 25% 30% 27% 28% 26% 24% 31% 27% 30% 27% 26% 31% 29% 34% 33% 31% 32% 33% 32% 29% 31% 32% 31% Asia 22% 24% 31% 22% 22% 25% 26% 24% 21% 20% 23% 21% 24% 25% 19% 22% 23% 23% 21% 19% 21% 22% 22% 22% 19% 21% Intelligent Documents Data Desktop Revenue ($Millions) Server Revenue ($Millions) Licensing as a % of Desktop Revenue Number of Server Transactions > $50,000 * Average Server Transaction Size * * Based on server transactions greater than $50,000 (excludes maintenance, support, and professional services); Average rounded to $Thousands 27.6% 30.6% % 31.8% 38.7% 40.4% 45.2% 43.1% 45.9% 47.2% 41.1% 47.2% 52.0% 57.2% Margin (as a % of total revenue) Gross Profit Margin 93.1% 93.9% 93.5% 93.1% 92.8% 93.4% 92.2% 92.1% 88.9% 91.0% 91.0% 92.5% 92.7% 93.1% 93.0% 92.8% 94.3% 93.4% 94.2% 93.2% 93.7% 94.3% 94.5% 94.4% 94.0% 94.3% Operating Expenses (as % of total revenue) Research & Development 19.0% 16.9% 17.3% 18.6% 20.7% 18.2% 22.1% 19.8% 21.0% 21.8% 21.1% 22.2% 21.6% 21.6% 20.4% 21.4% 17.7% 18.5% 19.8% 18.6% 18.7% 18.3% 18.0% 19.4% 18.5% 18.6% Sales & Marketing 31.7% 31.6% 31.8% 32.7% 35.8% 32.8% 33.3% 32.7% 32.9% 31.7% 32.7% 33.0% 33.0% 33.3% 31.7% 32.7% 30.1% 31.8% 30.5% 32.7% 31.3% 31.2% 31.2% 29.5% 28.8% 30.2% General & Administrative 9.2% 9.2% 9.0% 8.9% 10.6% 9.4% 9.6% 9.2% 9.4% 9.1% 9.3% 10.1% 9.5% 9.5% 8.8% 9.5% 7.9% 8.4% 9.1% 7.8% 8.3% 8.7% 8.5% 7.7% 9.0% 8.5% Headcount Worldwide Employees 2,947 3,066 3,161 3,233 3,043 3,043 3,054 3,510 3,557 3,319 3,319 3,377 3,440 3,486 3,515 3,515 3,518 3,646 3,749 3,848 3,848 4,016 4,207 4,286 4,285 4,285 Platform Mix Windows 63% 66% 71% 71% 73% 70% 73% 69% 72% 73% 71% 74% 73% 77% 73% 74% 71% 72% 73% 75% 73% 76% 74% 73% 76% 75% (as % of total revenue) Macintosh 37% 34% 29% 29% 27% 30% 27% 31% 28% 27% 29% 26% 27% 23% 27% 26% 29% 28% 27% 25% 27% 24% 26% 27% 24% 25% Total (Millions) * Split adjusted DSO Ratio Diluted Shares Outstanding* Days Sales Outstanding (Trade Receivables) Adobe provides this information as of the modification date above and makes no commitment to update the information subsequently. For a full explanation of this data, you are encouraged to review Adobe's Form 10K and 10Q SEC filings.

16 Adobe Systems Historical Investor Relations Data Sheet (PreAdobe/Macromedia integration) Historical Desktop Product Release Roadmap Last Updated: December 15, 2005 Product Q1'00 Q2'00 Q3'00 Q4'00 Q1'01 Q2'01 Q3'01 Q4'01 Q1'02 Q2'02 Q3'02 Q4'02 Q1'03 Q2'03 Q3'03 Q4'03 Q1`04 Q2`04 Q3`04 Q4`04 Q1`05 Q2`05 Q3`05 Q4`05 Acrobat After Effects Audition Creative Suite Encore DVD FrameMaker GoLive CS CS2 Illustrator CS CS2 InDesign CS CS2 PageMaker 7.0 Photoshop CS CS2 Photoshop Album Photoshop Elements Premiere Premiere Elements Premiere Pro Adobe provides this information as of the modification date above and makes no commitment to update the information subsequently. This desktop product release information corresponds to initial English version launch dates in the United States.

17 Adobe Systems Incorporated October 2, 2009 FINANCIAL DISCLAIMER Factors that may affect future results of operations bcour actual results could differ materially from our forwardlooking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed below. These and many other factors described in this report could adversely affect our operations, performance and financial condition. Adverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affect our operating results. As our business has grown, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. Uncertainty about future economic and political conditions makes it difficult for us to forecast operating results and to make decisions about future investments. For example, the direction and relative strength of the global economy has recently been increasingly uncertain due to softness in the real estate and mortgage markets, volatility in fuel and other energy costs, difficulties in the financial services sector and credit markets, continuing geopolitical uncertainties and other macroeconomic factors affecting spending behavior. If economic growth in the U.S. and other countries' economies is slowed, many customers may delay or reduce technology purchases, advertising spending or marketing spending. This could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies and increased price competition. The current global financial crisis affecting the banking system and financial markets and the possibility that financial institutions may consolidate or go out of business have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income, credit, currency and equity markets. There could be a number of followon effects from the credit crisis on our business, including insolvency of certain of our key distributors, resellers, OEMs, retailers and systems integrators, ISVs and VARs (collectively referred to as distributors ), which could impair our distribution channels, inability of customers, including our distributors, to obtain credit to finance purchases of our products, and failure of derivative counterparties and other financial institutions, which could negatively impact our treasury operations. Other income and expense could also vary from expectations depending on gains or losses realized on the sale or exchange of financial instruments, impairment charges related to investment securities as well as equity and other investments, interest rates, cash balances, and changes in fair value of derivative instruments. Any of these events would likely harm our business, results of operations and financial condition. Political instability in any of the major countries we do business in would also likely harm our business, results of operations and financial condition. If we cannot continue to develop, market and distribute new products or upgrades to existing products that meet customer requirements, our operating results could suffer. The process of developing new high technology products and enhancing existing products is complex, costly and uncertain, and any failure by us to anticipate customers' changing needs and emerging technological trends accurately could significantly harm our market share and results of operations. We must make longterm investments, develop or obtain appropriate intellectual property and commit significant resources before knowing whether our predictions will accurately reflect customer demand for our products. Our inability to extend our core technologies into new applications and new platforms, including the mobile and embedded devices market, and to anticipate or respond to technological changes could affect continued market acceptance of our products and our ability to develop new products and services. Additionally, any delay in the development, production, marketing or distribution of a new product or upgrade to an existing product could cause a decline in our revenue, earnings or stock price and could harm our competitive position. We offer our desktop application based products primarily on Windows and Macintosh platforms. We generally offer our server based products on the Linux platform as well as the Windows and UNIX platforms. To the extent that there is a slowdown of customer purchases of personal computers on either the Windows or Macintosh platform or in general, or to the extent that significant demand arises for our products or competitive products on other platforms before we choose and are able to offer our products on these platforms our business could be harmed. Additionally, to the extent that we have difficulty transitioning product or version releases to new Windows and Macintosh operating systems, or to the extent new releases of operating systems or other thirdparty products make it more difficult for our products to perform, our business could be harmed. Introduction of new products and business models by existing and new competitors could harm our competitive position and results of operations. The markets for our products are characterized by intense competition, evolving industry standards and business models, disruptive software and hardware technology developments, frequent new product introductions, short product life cycles, price cutting, with resulting downward pressure on gross margins, and price sensitivity on the part of consumers. Our future success will depend on our ability to enhance our existing products, introduce new products and services on a timely and costeffective basis, meet changing customer needs, extend our core technology into new applications, and anticipate and respond to emerging standards, business models, software delivery methods and other technological changes. For example, Microsoft Windows Vista operating system which contains a fixed document format, XPS, competes with Adobe PDF. Additionally, Microsoft Office 2007, which offers a feature to save Microsoft Office documents as PDF files, competes with Adobe PDF creation. Microsoft Expression Studio competes with our Adobe Creative Suite family of products and Microsoft Silverlight and Visual Studio, Web development tools for RIAs, compete with Adobe Flash, Adobe Flex and Adobe AIR. Google Gears and Sun's JavaFX, alternative approaches to deploying RIAs compete with Adobe Flash and Adobe AIR. Additionally, HTML 5 specifies scripting applications programming interfaces which if broadly implemented in browsers could compete with Adobe Flash. Companies, such as Google, Sun, Apple and Microsoft, may introduce competing software offerings for free or open source vendors may introduce competitive products. In addition, recent advances in computing and communications technologies have made the software as a service ( SaaS ) business model viable. SaaS allows companies to provide applications, data and related services over the Internet. Providers use primarily advertising or subscription based revenue models. We are exploring the deployment of our own SaaS strategies, but may not be able to develop the infrastructure and business models as quickly as our competitors. If any of these competing products or services achieve widespread acceptance, our operating results could suffer. In addition, consolidation has occurred among some of the competitors in our markets. Any further consolidations among our competitors may result in stronger competitors and may therefore harm our results of operations. For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the section entitled Competition contained in Item 1 of our Annual Report on Form 10K for fiscal Page 1 of 5

18 Adobe Systems Incorporated October 2, 2009 If we fail to successfully manage transitions to new business models and markets, our results of operations could be negatively impacted. We plan to release numerous new product and service offerings and employ new software delivery methods in connection with our transition to new business models. It is uncertain whether these strategies will prove successful or that we will be able to develop the infrastructure and business models as quickly as our competitors. Market acceptance of these new product and service offerings will be dependent on our ability to include functionality and usability in such releases that address certain customer requirements with which we have limited prior experience and operating history. Some of these new product and service offerings could subject us to increased risk of legal liability related to the provision of services as well as cause us to incur significant technical, legal or other costs. As our business continues to transition to new business models that may be more highly regulated for privacy and data security, and to countries outside the U.S. that have more strict data protection laws, our compliance requirements and costs may increase. In addition, laws in the areas of privacy and behavioral tracking are likely to be passed in the future, which could result in significant limitations on or changes to the ways in which we can collect, use, store or transmit the personal information of our customers or employees, communicate with our customers, and deliver products and services. Additionally, customer requirements for open standards or open source products could impact adoption or use with respect to some of our products. To the extent we incorrectly estimate customer requirements for such products or services or if there is a delay in market acceptance of such products or services, our business could be harmed. From time to time we open source certain of our technology initiatives, provide broader open access to certain of our technology, such as our Open Screen Project, and release selected technology for industry standardization. These changes may have negative revenue implications and make it easier for our competitors to produce products similar to ours. If we are unable to respond to these competitive threats, our business could be harmed. We are also devoting significant resources to the development of technologies and service offerings in markets where we have a limited operating history, including the enterprise, government and mobile and device markets. In the enterprise and government markets, we intend to increase our focus on vertical markets such as education, financial services, manufacturing, and the architecture, engineering and construction markets and horizontal markets such as training and marketing. These new offerings and markets require a considerable investment of technical, financial and sales resources, and a scalable organization. Many of our competitors may have advantages over us due to their larger presence, larger developer network, deeper experience in the enterprise, government and mobile and device markets, and greater sales and marketing resources. In the mobile and device markets, our intent is to partner with device makers, manufacturers and telecommunications carriers to embed our technology on their platforms, and in the enterprise and government market our intent is to form strategic alliances with leading enterprise and government solutions and service providers to provide additional resources to further enable penetration of such markets. If we are unable to successfully enter into strategic alliances with device makers, manufacturers, telecommunication carriers and leading enterprise and government solutions and service providers, or if they are not as productive as we anticipate, our market penetration may not proceed as rapidly as we anticipate and our results of operations could be negatively impacted. Revenue from our new businesses may be difficult to predict. As previously discussed, we are devoting significant resources to the development of product and service offerings where we have a limited operating history. This makes it difficult to predict revenue and revenue may decline quicker than anticipated. Additionally, we have a limited history of licensing products in certain markets such as the government and enterprise market and may experience a number of factors that will make our revenue less predictable, including longer than expected sales and implementation cycles, decision to open source certain of our technology initiatives, potential deferral of revenue due to multiple element revenue arrangements and alternate licensing arrangements. If any of our assumptions about revenue from our new businesses prove incorrect, our actual results may vary materially from those anticipated, estimated or projected. We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third party claims as a result of litigation or other proceedings. In connection with the enforcement of our own intellectual property rights, the acquisition of third party intellectual property rights, or disputes relating to the validity or alleged infringement of third party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation are typically very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel. Although we have successfully defended or resolved past litigation and disputes, we may not prevail in any ongoing or future litigation and disputes. Thirdparty intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from manufacturing or licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements. In addition, we may incur significant costs in acquiring the necessary thirdparty intellectual property rights for use in our products. Any of these could seriously harm our business. We may not be able to protect our intellectual property rights, including our source code, from third party infringers, or unauthorized copying, use, disclosure or malicious attack. Although we defend our intellectual property rights and combat unlicensed copying and use of software and intellectual property rights through a variety of techniques, preventing unauthorized use or infringement of our rights is inherently difficult. We actively pursue software pirates as part of our enforcement of our intellectual property rights, but we nonetheless lose significant revenue due to illegal use of our software. If piracy activities increase, it may further harm our business. Additionally, we take significant measures to protect the secrecy of our confidential information and trade secrets, including our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret protection for that source code. The loss of future trade secret protection could make it easier for thirdparties to compete with our products by copying functionality, which could adversely affect our revenue and operating margins. We also seek to protect our confidential information and trade secrets through the use of nondisclosure agreements with our customers, contractors, vendors, and partners. However there is a risk that our confidential information and trade secrets may be disclosed or published without our authorization, and in these situations it may be difficult and or costly for us to enforce our rights. We also devote significant resources to maintaining the security of our products from malicious hackers who develop and deploy viruses, worms, and other malicious software programs that attack our products. Nevertheless, actual or perceived security vulnerabilities in our products could harm our reputation and lead some customers to seek to return products, to reduce or delay future purchases, to use competitive products or to make claims against us. Also, with the introduction of hosted services with some of our product offerings, our customers may use such services to share confidential and sensitive information. If Page 2 of 5

19 Adobe Systems Incorporated October 2, 2009 a breach of security occurs on these hosted systems, we could be held liable to our customers or be subject to governmental complaints. Additionally, such breaches could lead to interruptions, delays and data loss and protection concerns as well as harm to our reputation. We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt our business and management. We have in the past and may in the future acquire additional companies, products or technologies. Most recently, we announced an agreement to acquire Omniture in September We may not realize the anticipated benefits of an acquisition and each acquisition has numerous risks. These risks include: difficulty in assimilating the operations and personnel of the acquired company; difficulty in effectively integrating the acquired technologies or products with our current products and technologies; difficulty in maintaining controls, procedures and policies during the transition and integration; disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges; difficulty integrating the acquired company's accounting, management information, human resources and other administrative systems; inability to retain key technical and managerial personnel of the acquired business; inability to retain key customers, distributors, vendors and other business partners of the acquired business; inability to achieve the financial and strategic goals for the acquired and combined businesses; inability to take advantage of anticipated tax benefits as a result of unforeseen difficulties in our integration activities; incurring acquisition related costs or amortization costs for acquired intangible assets that could impact our operating results; potential additional exposure to fluctuations in currency exchange rates; potential impairment of our relationships with employees, customers, partners, distributors or third party providers of technology or products; potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company or technology, including but not limited to, issues with the acquired company's intellectual property, product quality or product architecture, data backup and security, revenue recognition or other accounting practices, employee, customer or partner issues or legal and financial contingencies; exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or other thirdparties; incurring significant exit charges if products acquired in business combinations are unsuccessful; potential inability to assert that internal controls over financial reporting are effective; potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions; and potential delay in customer and distributor purchasing decisions due to uncertainty about the direction of our product offerings. Mergers and acquisitions of high technology companies are inherently risky, and ultimately, if we do not complete an announced acquisition transaction or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated. Failure to manage our sales and distribution channels effectively could result in a loss of revenue and harm to our business. A significant amount of our revenue for application products is from two distributors, Ingram Micro, Inc. and Tech Data Corporation, which represented 16% and 7% of our net revenue for the third quarter of fiscal 2009, respectively. We have multiple nonexclusive, independently negotiated distribution agreements with Ingram Micro and Tech Data and their subsidiaries covering our arrangements in specified countries and regions. Each of these contracts has an independent duration, is independent of any other agreement (such as a master distribution agreement) and any termination of one agreement does not affect the status of any of the other agreements. In the third quarter of fiscal 2009, no single agreement with these distributors was responsible for over 10% of our total net revenue. If any one of our agreements with these distributors were terminated, we believe we could make arrangements with new or existing distributors to distribute our products without a substantial disruption to our business; however, any prolonged delay in securing a replacement distributor could have a negative shortterm impact on our results of operations. Successfully managing our indirect channel efforts to reach various potential customer segments for our products and services is a complex process. Our distributors are independent businesses that we do not control. We cannot be certain that our distribution channel will continue to market or sell our products effectively. If we are not successful, we may lose sales opportunities, customers and revenues. Our distributors also sell our competitors' products, and if they favor our competitors' products for any reason, they may fail to market our products as effectively or to devote resources necessary to provide effective sales, which would cause our results to suffer. We also distribute some products through our OEM channel, and if our OEM partners decide not to bundle our applications on their devices, our results could suffer. In addition, the financial health of our distributors and our continuing relationships with them are important to our success. Some of these distributors may be unable to withstand adverse changes in current economic conditions, which could result in insolvency of certain of our distributors and/or the inability of our distributors to obtain credit to finance purchases of our products. In addition, weakness in the enduser market could further negatively affect the cash flow of our distributors who could, in turn, delay paying their obligations to us, which would increase our credit risk exposure. Our business could be harmed if the financial condition of some of these distributors substantially weakens and we were unable to timely secure replacement distributors. We also sell certain of our products through our direct sales force. Risks associated with this sales channel include a longer sales cycle associated with direct sales efforts, difficulty in hiring, retaining and motivating our direct sales force, and substantial amounts of training for sales representatives, including regular updates to cover new and upgraded products. Catastrophic events may disrupt our business. We are a highly automated business and rely on our network infrastructure and enterprise applications, internal technology systems and our Web site for our development, marketing, operational, support, hosted services and sales activities. A disruption or failure of these systems in the event of a major earthquake, fire, telecommunications failure, cyber attack, war, terrorist attack, or other catastrophic event could cause system interruptions, reputational harm, delays in our product development, breaches of data security and loss of critical data and could prevent us from fulfilling our customers' orders. Our corporate headquarters, a significant portion of our research and development activities, our data centers, and certain other critical business operations are located in San Jose, California, which is near major earthquake faults. We have developed certain disaster recovery plans and certain backup systems to reduce the potentially adverse effect of such events, but a catastrophic event that results in the destruction or disruption of any of our data centers or our critical business or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be adversely affected. Page 3 of 5

20 Adobe Systems Incorporated October 2, 2009 Net revenue, margin or earnings shortfalls or the volatility of the market generally may cause the market price of our stock to decline. The market price for our common stock has experienced significant fluctuations and may continue to fluctuate significantly. The market price for our common stock may be affected by a number of factors, including shortfalls in our net revenue, margins, earnings or key performance metrics, changes in estimates or recommendations by securities analysts, the announcement of new products or product enhancements by us or our competitors, quarterly variations in our or our competitors' results of operations, developments in our industry; unusual events such as significant acquisitions, divestitures and litigation, general socioeconomic, political or market conditions and other factors, including factors unrelated to our operating performance. We are subject to risks associated with international operations which may harm our business. We generate almost 50% of our total revenue from sales to customers outside of the Americas. Sales to these customers subject us to a number of risks, including: foreign currency fluctuations; changes in government preferences for software procurement; international economic, political and labor conditions; tax laws (including U.S. taxes on foreign subsidiaries); unexpected changes in, or impositions of, international legislative or regulatory requirements; failure of foreign laws to protect our intellectual property rights adequately; inadequate local infrastructure; delays resulting from difficulty in obtaining export licenses for certain technology, tariffs, quotas and other trade barriers and restrictions; transportation delays; the burdens of complying with a variety of foreign laws, including consumer and data protection laws; and other factors beyond our control, including terrorism, war, natural disasters and diseases. If sales to any of our customers outside of the Americas are delayed or cancelled because of any of the above factors, our revenue may be negatively impacted. In addition, approximately 46% of our employees are located outside the U.S. This means we have exposure to changes in foreign laws governing our relationships with our employees, including wage and hour laws and regulations, fair labor standards, unemployment tax rates, workers' compensation rates, citizenship requirements and payroll and other taxes, which likely would have a direct impact on our operating costs. We also intend to continue expansion of our international operations and international sales and marketing activities. Expansion in international markets has required, and will continue to require, significant management attention and resources. We may be unable to scale our infrastructure effectively, or as quickly as our competitors, in these markets, which would cause our results to suffer. Moreover, local laws and customs in many countries differ significantly from those in the U.S. We incur additional legal compliance costs associated with our international operations and could become subject to legal penalties in foreign countries if we do not comply with local laws and regulations, which may be substantially different from those in the U.S. In many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by U.S. regulations applicable to us such as the Foreign Corrupt Practices Act. Although we implement policies and procedures designed to ensure compliance with these laws, there can be no assurance that all of our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, including those based in or from countries where practices which violate such U.S. laws may be customary, will not take actions in violation of our internal policies. Any such violation, even if prohibited by our internal policies, could have an adverse effect on our business. We may incur losses associated with currency fluctuations and may not be able to effectively hedge our exposure. Our operating results are subject to fluctuations in foreign currency exchange rates. We attempt to mitigate a portion of these risks through foreign currency hedging, based on our judgment of the appropriate tradeoffs among risk, opportunity and expense. We have established a hedging program to partially hedge our exposure to foreign currency exchange rate fluctuations primarily for the Japanese Yen and the Euro. We regularly review our hedging program and make adjustments as necessary based on the judgment factors discussed above. Our hedging activities may not offset more than a portion of the adverse financial impact resulting from unfavorable movement in foreign currency exchange rates, which could adversely affect our financial condition or results of operations. Changes in, or interpretations of, accounting principles could result in unfavorable accounting charges. We prepare our Condensed Consolidated Financial Statements in accordance GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles. A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Our accounting principles that recently have been or may be affected by changes in the accounting principles are as follows: software revenue recognition; accounting for stock based compensation; accounting for income taxes; and accounting for business combinations and related goodwill. In December 2007, the FASB issued SFAS 141R which changes the accounting for business combinations including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for preacquisition gain and loss contingencies, the recognition of capitalized inprocess research and development, the accounting for acquisition related restructuring liabilities, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer's income tax valuation allowance. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, We are in the process of evaluating the impact of the pending adoption of Statement 141R. We currently believe that the adoption of Statement 141R will result in the recognition of certain types of expenses in our results of operations that we currently capitalize pursuant to existing accounting standards and may also impact our financial statements in other ways. Page 4 of 5