Adaptec 2005 Annual Report Download - page 54

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Table of Contents
In 2007, we generated $91.2 million of cash from operating activities. Changes in working capital accounts included:
• a $13.7 million increase in our income taxes payable primarily due to accruing arrears interest of $13.1 million on our FIN48 liability;
• a $6.9 million increase in accounts payable and accrued liabilities due primarily to $4.8 million in increased accruals for photomasks and accounts
payable for our Israeli operations and $2.2 million in increased payroll related accruals;
• a $2 million decrease in prepaids and other assets attributable to a decrease in prepaid hardware and software maintenance, and software rentals;
• a $2.1 million increase in accounts receivable, due to increased revenues and the reversal of $0.2 million reserve for doubtful accounts.
• a $1.6 million net decrease in accrued restructuring costs due to $ 11.9 million of additional charges recorded in 2007, offset by $10.2 million in
payments; and
• a $2.3 million increase in deferred income due to increased shipments to our major distributor.
Cash flows from our investment activities included $18.6 million purchases of property, equipment and intangible assets.
Cash flows from our financing activities included cash proceeds of $32 million from the issuance of common stock under our equity-based compensation plans.
As of December 30, 2007 we have the following commitments:
(in thousands) Total 2008 2009 2010 2011 2012
After
2012
Contractual Obligations
Operating Lease Obligations:
Minimum Rental Payments $ 36,709 $ 11,742 $ 12,583 $ 7,604 $ 4,682 $ 82 $ 16
Estimated Operating Cost Payments 11,726 4,386 3,481 2,524 1,330 4 1
Long Term Debt:
Principal Repayment 225,000 — — — — — 225,000
Interest Payments 91,128 5,063 5,063 5,063 5,063 5,063 65,813
Purchase and other Obligations 20,130 9,531 8,235 2,364 — —
Liability for Unrecognized Tax Benefit (see comments below)
$ 384,693 $ 30,722 $ 29,362 $ 17,555 $ 11,075 $ 5,149 $ 290,830
In addition to the amounts shown in the table above, we have recorded $179.4 million of unrecognized tax benefits in accordance with FIN 48 as of
December 30, 2007 and we are uncertain as to if or when such amounts may be settled. Included in this liability is $46.8 million accrual for potential interest and
penalties. In the event we are required to pay all or a significant portion of such amounts in one payment, our cash reserves will be significantly reduced. This
could hinder our ability to enter into strategic transactions and could affect our operations. Should we seek additional financing for operational needs, we cannot
be certain that financing will be available on favorable terms or at all.
On October 26, 2005, we issued $225 million aggregate principal amount of 2.25% senior convertible notes due 2025 (the “Notes”) and have recorded these
Notes as long-term debt. Issuance costs of $6.8 million have been deferred and are being amortized over seven years.
48
Source: PMC SIERRA INC, 10-K, February 22, 2008