Adaptec 2007 Annual Report Download - page 48

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Table of Contents
To date, we have made cash payments of $12.7 million and $176.6 million related to the 2003 and 2001 plans, respectively. We have completed the activities
contemplated in these restructuring plans, but have not yet terminated the leases on all of our surplus facilities. Efforts to exit these sites are ongoing, but the
payments related to these facilities could extend to 2011.
Other Income and Expenses ($ millions)
2007 Change 2006 Change 2005
Interest income, net $ 9.9 10% $ 9.0 (26)% $ 12.1
Percentage of net revenues 2% 2% 4%
Foreign exchange loss $ (18.5) 184% $ (0.1) (97)% $ (3.3)
Percentage of net revenues (4)% — (1)%
Loss on extinguishment of debt and amortization of debt issue costs $ (1.0) — $ (1.0) (44)% $ (1.8)
Percentage of net revenues — — (1)%
(Loss) Gain on investments — (100)% $ (1.3) (193)% $ 1.4
Percentage of net revenues — — —
Interest income, net
Our net interest income for 2005, 2006 and 2007 was $12.1, $9.0 and $9.9 respectively. In the fourth quarter of 2005, we issued $225.0 million of 2.25% senior
convertible notes, resulting in higher net interest income in 2005 of approximately $0.7 million as the yield on short-term deposits exceeded the interest rate on
the notes. In the first quarter of 2006, we acquired the Storage Semiconductor Business for $431.3 million in cash, which lowered our cash balance and resulted
in a significant decrease in interest income that year. We did not have any comparable investing activities in 2007 that consumed significant cash and we were
able to increase our cash balances through operations during the year. Partially offsetting the impact of the higher cash balances was reduced interest income
from prior year tax refunds.
Foreign exchange loss
Foreign exchange loss increased to $18.5 million in 2007 compared to $0.1 million in 2006 and $3.3 million in 2005.
We have a significant design presence outside the United States, especially in Canada. In 2007, the United States dollar declined 15.8% against the Canadian
dollar. Accordingly, the majority of our operating expense exposures to changes in the value of the Canadian dollar relative to the United States dollar have been
hedged through December 2008. The foreign exchange loss for all years presented relates primarily to the re-measurement each period of accrued income tax
amounts in our Canadian subsidiary. We hedge less than twenty percent of our recorded tax accrual, net of deferred tax assets generated in this local jurisdiction.
42
Source: PMC SIERRA INC, 10-K, February 22, 2008