Adaptec 2002 Annual Report Download - page 31

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We have commitments made up of the following:
As at December 31, 2002 (in thousands) Payments Due
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
After
Contractual Obligations Total 2003 2004 2005 2006 2007 2007
Operating Lease Obligations:
Minimum Rental Payments 273,329 31,839 31,470 30,628 31,964 29,166 118,262
Estimated Operating Cost Payments 59,072 7,470 7,061 6,971 6,447 6,258 24,865
Long Term Debt:
Principal Repayment 275,000 − − − 275,000 − −
Interest Payments 41,252 10,313 10,313 10,313 10,313 − −
Purchase Obligations 4,057 2,871 1,186 − − − −
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
652,710 52,493 50,030 47,912 323,724 35,424 143,127
=========================================================================
Venture Investment Commitments (see below) 38,103
−−−−−−−−−−−−
Total Contractual Cash Obligations 690,813
============
Approximately $260 million of the minimum rental payments and estimated
operating costs identified in the table above relate to operating leases for
vacant and excess office facilities. We are currently negotiating settlements of
these leases and may incur significant related cash expenditures. We expect to
expend the majority of the $129.5 million we have accrued for restructuring
costs in settlement of these obligations in 2003. See Note 3 to the Consolidated
Financial Statements for additional information regarding restructuring and
other costs.
We participate in four professionally managed venture funds that invest in
early−stage private technology companies in markets of strategic interest to us.
From time to time these funds request additional capital for private placements.
We have committed to invest an additional $38.1 million into these funds, which
may be requested by the fund managers at any time over the next seven years.
We have not entered into any derivative contracts other than our convertible
notes and through our stock option plans, and we have not entered into any
synthetic leases.
We believe that existing sources of liquidity will satisfy our projected
restructuring, operating, working capital, venture investing, debt interest,
capital expenditure and wafer deposit requirements through the end of 2003. We
expect to spend approximately $8 million on new capital additions during 2003.
FACTORS THAT YOU SHOULD CONSIDER BEFORE INVESTING IN PMC−SIERRA
Our company is subject to a number of risks − some are normal to the fabless
networking semiconductor industry, some are the same or similar to those
disclosed in previous SEC filings, and some may be present in the future. You
should carefully consider all of these risks and the other information in this
report before investing in PMC. The fact that certain risks are endemic to the
industry does not lessen the significance of the risk.
As a result of these risks, our business, financial condition or operating
results could be materially adversely affected. This could cause the trading
price of our securities to decline, and you may lose part or all of your
investment.
We are subject to rapid changes in demand for our products due to customer
inventory levels, production schedules, fluctuations in demand for networking
equipment and our customer concentration.
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