Adaptec 2003 Annual Report Download - page 72

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The total fair value of held−to−maturity investments at December 31, 2002 was $397.8 million (2001 − $358.1 million), with
remaining maturities ranging from 1 month to 28 months. There was no substantial difference between the amortized cost of these
investments and their fair value. In 2002 the company did not reclassify any investments from held−to−maturity to
available−for−sale.
In 2002, the Company sold investments in bonds and notes with a total amortized cost of $10.1 million that were classified as
held−to−maturity. The securities were downgraded in credit quality and as a result no longer met the Company’s internal investment
policy as established by the Company’s Board of Directors. The realized gain or loss on these sales was immaterial. These sales did
not impact the classification of any other held−to−maturity securities.
NOTE 5. Other Investments and Assets
The components of other investments and assets are as follows:
December 31,
(in thousands) 2003 2002
Investment in Sierra Wireless Inc. $ — $ 8,707
Other investments in public companies — 264
Investments in non−public entities 6,848 7,098
Deferred debt issue costs (Note 7) 2,571 5,603
Other assets 1,917 306
$ 11,336 $ 21,978
The Company has investments in non−public entities, either directly or through venture funds, which include investments in
early−stage private technology companies of strategic interest to the Company. The Company has commitments to invest additional
capital into venture funds (see Note 8). In 2003, the Company made additional cash investments of $3.3 million (2002 − $10.1
million; 2001 – $5.7 million) in non−public entity investments.
During the year ended December 31, 2003, the Company sold all of its investments in public companies for cash proceeds of $8.5
million (2002 − $5.8 million; 2001 − $3.3 million) and recorded gross realized gains of $6.0 million (2002 − $3.7 million; 2001 − $2.9
million). There were no non−cash proceeds from sales of investments in 2003 (2002 − nil; 2001 – $1.7 million). Of these amounts,
cash proceeds of $8.4 million (2002 − $5.3 million; 2001 − $2.1 million) and gross realized gains of $6.0 million (2002 − $3.3
million; 2001 − $1.9 million) related to the disposition of investments classified as available for sale.
The Company monitors the value of its investments for impairment and records an impairment charge to reflect any decline in value
below its cost basis, if that decline is considered to be other than temporary. The assessment of impairment in carrying value is based
on the market value trends of similar public companies, the current business performance of the entities in which we have invested,
and if available, the estimated future market potential of the companies and venture funds. In 2003, the Company recorded an
impairment charge of $3.5 million (2002 – $15.3 million; 2001 − $17.5 million) related to its investments in non−public
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