Adaptec 2008 Annual Report Download - page 43

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Operating Activities—During the fiscal year 2008, we generated positive net operating cash flows of $78.8
million, which was $12.4 million lower than the $91.2 million generated in fiscal 2007. The positive cash flow
from operations generated in 2008 was primarily from net income, which included an impairment loss of the
Reserve Funds of $11.8 million, and the addback or deduction of non-cash items such as stock based
compensation expense, depreciation and amortization expense, the gain on repurchase of our senior convertible
notes and our net tax recovery.
Significant changes in working capital accounts in 2008 included:
• a $6.9 million decrease in prepaids and other assets, which reflects expenses recognized in excess of
cash additions to prepaids;
• a $42.7 million of cash payments that reduced accounts payable and accrued liabilities, including $18.0
million payment related to settlement of a tax matter; due to the downturn in the global economy
throughout the last quarter of the year, we reduced our inventory purchases, which in turn, led to a
lower overall accounts payable as of year end;
• a $5.0 million decrease in our restructuring accruals as we paid severance and rent on excess facilities
under our various restructuring plans; and
• a $2.5 million decrease in our deferred revenue as shipments to distributors slowed in the fourth quarter
of fiscal 2008 due to the global economic downturn.
Investing Activities—Net cash used in investing activities of $222.4 million during fiscal 2008 included the
reclassification of the available-for-sale securities in the Reserve Funds from cash equivalents to short-term
investments and long-term investment securities of $209.7 million in 2008.
We purchased $6.8 million of property, plant and equipment, and $5.9 million of intellectual property.
Financing activities—Net cash used in financing activities in fiscal 2008 included the repurchase of our
senior convertible notes for $139.3 million, and proceeds from the issuance of common shares under our stock
option plans of $16.5 million.
As of December 28, 2008, we have the following commitments:
(in thousands) Total 2009 2010 2011 2012
After
2012
Contractual Obligations
Operating Lease Obligations:
Minimum Rental Payments ............... $ 26,138 $10,937 $10,443 $4,692 $ 66 $ —
Estimated Operating Cost Payments ........ 8,238 3,854 3,052 1,332 — —
Long Term Debt:
Principal Repayment .................... 68,340 — — — — 68,340
Interest Payments ...................... 26,142 1,538 1,538 1,538 1,538 19,990
Purchase and other Obligations ................ 18,051 16,017 2,034 — — —
Liability for Unrecognized Tax Benefit (see
comments below)
$146,909 $32,346 $17,067 $7,562 $1,604 $88,330
In addition to the amounts shown in the table above, we have recorded $26.8 million liability for
unrecognized tax benefits in accordance with FIN 48 as of December 28, 2008 and we are uncertain as to if or
when such amounts may be realized.
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