Adaptec 2001 Annual Report Download - page 28

Download and view the complete annual report

Please find page 28 of the 2001 Adaptec annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 93

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93

28
included income of $0.6 million related to an investee accounted for under the equity method in
2000. While our interest income declined by approximately $3.2 million as a result of a decline
of average yields on our cash, short term and long term investments, or “ cash balances” , this
decline was offset by an additional $3.0 million in interest income from an overall increase in
our cash balances.
Our interest expense increased to $4.3 million in 2001 from $0.8 million in 2000 as a result of the
interest expense incurred on convertible notes issued in A ugust 2001 (see “ Liquidity and
Capital Resources” below). We also incurred an incremental $0.6 million in amortized debt
issuance costs incurred in 2001 as a result of the issuance of our convertible notes.
Our net interest income increased in 2000 compared to 1999 as a result of higher cash balances
available to earn interest. Other income in 2000 and 1999 included income from an equity
interest in another company of $0.6 million and $0.8 million, respectively. We decreased
interest expense from loans and capital leases to $0.8 million in 2000 from $1.5 million in 1999
by retiring debt from loans and capital leases.
Gain (Loss) on Investments ($000,000)
We reported a net loss on investments of $14.6 million in 2001, and gains on investments of
$58.5 million in 2000 and $26.8 million in 1999.
In 2001, w e recorded $2.9 million of gains on the sale of a portion of our investment in Sierra
Wireless, Inc., a public company, as well as other investments. These gains were offset by a
$17.5 million charge to recognize the impairment of our investments in non-public entities. See
“ Critical A ccounting Policies and Significant Estimates” .
In 2000, gains of $54.4 million resulted from the sale of a portion of our investment in Sierra
Wireless, Inc. Additionally, we sold our remaining shares of Cypress Semiconductor, Inc.
resulting in a gain of $4.1 million.
In 1999, w e recorded gains of $14.5 million from the sale of a portion of our Sierra Wireless
shares. During the year, w e also had an investment in IC Works, Inc., or ICW, a private
company that was subsequently purchased by Cypress Semiconductor, a public company. As a
result of that transaction, w e exchanged our preferred shares of ICW for common shares of
Cypress Semiconductor. We disposed of a portion of our shares in Cypress Semiconductor,
resulting in a gain of $12.3 million.
Provision for Income Taxes.
2001 Change 2000 Change 1999
Gain (loss) on investments $(14.6) (125%) 58.5$ 118% 26.8$
Percentage of net revenues -5%8%9%