Adobe 2010 Annual Report Download - page 74

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Cash flows from financing activities
In February 2010, we issued $600.0 million of 3.25% senior notes due February 1, 2015 and $900.0 million of 4.75%
senior notes due February 1, 2020. Our proceeds were approximately $1.5 billion and were net of an issuance discount of
$6.6 million. The Notes rank equally with our other unsecured and unsubordinated indebtedness. In addition, we incurred
issuance costs of approximately $10.7 million. Both the discount and issuance costs are being amortized to interest expense
over the respective terms of the Notes using the effective interest method. Interest is payable semi-annually, in arrears, on
February 1 and August 1, commencing on August 1, 2010. The proceeds from this offering are available for general
corporate purposes. As of December 3, 2010, the amount outstanding under the Notes was $1.5 billion, which is included in
long-term liabilities on our Consolidated Balance Sheets. See Note 17 of our Notes to Consolidated Financial Statements for
more detailed information.
On February 1, 2010, we used $1.0 billion of the proceeds from the Notes offering to pay the outstanding balance on
our credit facility, and as of December 3, 2010, this facility has no outstanding balance. We are in compliance with all of our
covenants under our credit facility and the entire $1.0 billion credit line remains available for borrowing.
Net cash from financing activities changed from cash provided for in fiscal 2009 of $477.6 million to cash used in fiscal
2010 of $215.3 million, primarily due to payment of the outstanding balance on our credit facility and treasury stock
repurchases offset in part by proceeds from our Notes and treasury stock issuances. See sections entitled “Stock Repurchase
Program I” and “Stock Repurchase Program II” discussed below.
Net cash from financing activities changed from cash used in fiscal 2008 of $1.0 billion to cash provided for in fiscal
2009 of $477.6 million, primarily due to additional borrowing under our credit agreement of $650.0 million and lower
purchases of treasury stock, offset in part by proceeds related to the issuance of treasury stock. See sections entitled “Stock
Repurchase Program I” and “Stock Repurchase Program II” discussed below.
We expect to continue our investing activities, including short-term and long-term investments, venture capital,
facilities expansion and purchases of computer systems for research and development, sales and marketing, product support
and administrative staff. Furthermore, cash reserves may be used to repurchase stock under our stock repurchase program and
to strategically acquire companies, products or technologies that are complementary to our business.
Acquisition of Day
On October 28, 2010, we completed our acquisition of Day, a provider of WCM solutions that leading global
enterprises rely on for Web 2.0 content application and content infrastructure, based in Basel, Switzerland and Boston,
Massachusetts. Under the terms of the agreement, we completed our public tender offer to acquire all of the publicly held
registered shares of Day for 139 Swiss Francs per share in cash in a transaction valued at approximately $248.3 million on a
fully diluted equity-value basis. In order to hedge the economic exposure related to this acquisition, we entered into a forward
contract to purchase 254.7 million Swiss Francs for $242.5 million U.S. dollars that matured near the closing date of the
acquisition. Upon maturity of the forward contract, we recorded a $20.8 million gain to interest and other income (expense),
net. This forward contract is accounted for as a separate transaction apart from the acquisition. Following the closing, we
integrated Day as a product line within our Enterprise segment for financial reporting purposes.
Restructuring
During the past several years, we have initiated various restructuring plans. Currently, we have the following four active
restructuring plans, two of which were the result of large acquisitions:
• Fiscal 2009 Restructuring Plan
• Fiscal 2008 Restructuring Plan
• Omniture Restructuring Plan
• Macromedia Restructuring Plan
During fiscal 2010, we have accrued total restructuring charges of approximately $16.4 million of which approximately
$2.6 million related to ongoing termination benefits and contract terminations which are expected to be paid during the first
quarter of fiscal 2011. The remaining $13.8 million related to the cost of closing redundant facilities and are expected to be
paid under contract through fiscal 2021 of which over 70% will be paid through 2013. During fiscal 2010, we made payments
related to the above restructuring plans totaling approximately $49.9 million which consisted of approximately $42.3 million
related to termination benefits and contract terminations and approximately $7.6 million related to the cost of closing
redundant facilities.