(^*) During the fourth quarter of fiscal 2015, we early-adopted Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes. This standard requires that all deferred tax assets and liabilities, and any related valuation allowance, be classified as noncurrent on the balance sheets. As of November 27, 2015, our deferred tax assets were netted against non-current deferred income tax liabilities.

Condensed Consolidated Statements of Cash Flows (In thousands; unaudited)
		Three Months Ended
		November 27, 2015				November 28, 2014
Cash flows from operating activities:
Net income		$	222,705			$	88,136
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		86,359				78,147
Stock-based compensation expense		81,022				84,950
Gain on sale of property		(21,415		)		—
Unrealized investment gains, net		(662		)		(121		)
Changes in deferred revenue		179,265				158,712
Changes in other operating assets and liabilities		(92,759		)		(10,071		)
Net cash provided by operating activities		454,515				399,753
Cash flows from investing activities:
Purchases, sales and maturities of short-term investments, net		(277,566		)		(8,474		)
Purchases of property and equipment		(64,676		)		(36,775		)
Proceeds from the sale of property		57,779				—
Purchases and sales of long-term investments, intangibles and other assets, net		(1,524		)		(2,908		)
Acquisitions, net of cash		—				(29,802		)
Net cash used for investing activities		(285,987		)		(77,959		)
Cash flows from financing activities:
Purchases of treasury stock		(125,000		)		(125,000		)
Proceeds from reissuance of treasury stock, net		42				3,618
Repayment of debt and capital lease obligations		—				(3,253		)
Excess tax benefits from stock-based compensation		9,808				21,282
Net cash used for financing activities		(115,150		)		(103,353		)
Effect of exchange rate changes on cash and cash equivalents		(6,110		)		(4,370		)
Net increase in cash and cash equivalents		47,268				214,071
Cash and cash equivalents at beginning of period		829,292				903,329
Cash and cash equivalents at end of period		$	876,560			$	1,117,400

Non-GAAP Results (In thousands, except per share data)   The following tables show Adobe's GAAP results reconciled to non-GAAP results included in this release.
		Three Months Ended												Year Ended
		November 27, 2015				November 28, 2014				August 28, 2015				November 27, 2015				November 28, 2014
Operating income:
GAAP operating income		$	290,434			$	124,505			$	246,019			$	903,095			$	412,685
Stock-based and deferred compensation expense		81,705				85,025				84,371				338,047				335,856
Restructuring and other charges		521				19,385				(751		)		1,559				19,883
Amortization of purchased intangibles		37,678				31,331				41,041				152,590				127,000
Loss contingency (reversal)		—				—				(10,000		)		(10,000		)		10,000
Non-GAAP operating income		$	410,338			$	260,246			$	360,680			$	1,385,291			$	905,424
Net income:
GAAP net income		$	222,705			$	88,136			$	174,465			$	629,551			$	268,395
Stock-based and deferred compensation expense		81,705				85,025				84,371				338,047				335,856
Restructuring and other charges		521				19,385				(751		)		1,559				19,883
Amortization of purchased intangibles		37,678				31,331				41,041				152,590				127,000
Investment (gains) losses		(622		)		(343		)		1,314				(961		)		(1,156		)
Gain on sale of property assets		(21,415		)		—				—				(21,415		)		—
Loss contingency (reversal)		—				—				(10,000		)		(10,000		)		10,000
Income tax adjustments		(8,674		)		(27,872		)		(15,051		)		(35,826		)		(86,140		)
Non-GAAP net income		$	311,898			$	195,662			$	275,389			$	1,053,545			$	673,838
Diluted net income per share:
GAAP diluted net income per share		$	0.44			$	0.17			$	0.34			$	1.24			$	0.53
Stock-based and deferred compensation expense		0.16				0.17				0.17				0.67				0.65
Restructuring and other charges		—				0.04				—				—				0.04
Amortization of purchased intangibles		0.07				0.06				0.08				0.30				0.24
Gain on sale of property assets		(0.04		)		—				—				(0.04		)		—
Loss contingency (reversal)		—				—				(0.02		)		(0.02		)		0.02
Income tax adjustments		(0.01		)		(0.05		)		(0.03		)		(0.07		)		(0.15		)
Non-GAAP diluted net income per share		$	0.62			$	0.39			$	0.54			$	2.08			$	1.33
Shares used in computing diluted net income per share		506,012				507,451				505,809				507,164				508,480

		Three Months Ended
		November 27, 2015
Effective income tax rate:
GAAP effective income tax rate		25.0	%
Stock-based and deferred compensation expense		(1.0	)
Amortization of purchased intangibles		(0.5	)
Income tax adjustments		(2.5	)
Non-GAAP effective income tax rate		21.0	%

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