Adaptec 2006 Annual Report Download - page 50

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Table of Contents
The October 2001 restructuring plan included the termination of 341 employees, the consolidation of excess facilities, and the curtailment of certain research and
development projects, resulting in a restructuring charge of $175.3 million, including $12.2 million of asset write-downs. Due to the continued downturn in real
estate markets, we recorded additional provisions for abandoned office facilities of $1.3 million in the fourth quarter of 2004.
In the first quarter of 2001, we recorded a charge of $19.9 million for a restructuring plan that included the termination of 223 employees across all business
functions, the consolidation of a number of facilities and the curtailment of certain research and development projects. Due to the continued downturn in real
estate markets, we recorded additional provisions for abandoned office facilities of $2.2 million in the fourth quarter of 2004, and $0.8 million in the third quarter
of 2006.
To date, we have made cash payments of $12.7 million and $174.5 million related to the 2003 and 2001 plans, respectively. We have completed the activities
contemplated in these restructuring plans, but have not yet terminated the leases on all of our surplus facilities. Efforts to exit these sites are ongoing, but the
payments related to these facilities could extend to 2011.
Other Income and Expenses ($ millions)
2006 Change 2005 Change 2004
Interest income, net $ 9.0 (26%) $ 12.1 147% $ 4.9
Percentage of net revenues 2% 4% 2%
Foreign exchange loss $ (0.1) (97%) $ (3.3) 154% $ (1.3)
Percentage of net revenues 0% (1%) 0%
Loss on extinguishment of debt and amortization of debt issue costs $ (1.0) (46%) $ (1.8) (18%) $ (2.2)
Percentage of net revenues 0% (1%) (1%)
(Loss) Gain on investments $ (1.3) (191%) $ 1.4 (85%) $ 9.2
Percentage of net revenues 0% 0% 3%
Interest income, net
Interest income was $9.0 million in 2006 compared to $12.1 million in 2005, a decrease of $3.1 million. In the fourth quarter of 2005, we issued $225.0 million
of 2.25% senior convertible notes, which resulted in higher interest expense for 2006 of $4.0 million. In addition, on February 28, 2006, we paid approximately
$431.3 million in cash for the acquisition of the Storage Semiconductor Business, thus reducing our interest income for the remainder of 2006.
Net interest income increased by $7.2 million in 2005 compared to 2004. At December 31, 2004, $68.1 million of our 3.75% convertible subordinated notes were
outstanding. On January 18, 2005, we redeemed these notes for a total of $70.2 million in cash, which included $1.1
48
Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠