Adaptec 2009 Annual Report Download - page 27

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Annual Report
that may be settled in cash upon conversion (including partial cash settlements). Accordingly, the
comparative consolidated financial statements have been adjusted.
The equity portion of the senior convertible notes, included in stockholders' equity is $35.2 million for the
years ended December 27, 2009 and December 28, 2008, respectively. The equity portion of the senior
convertible notes, included in stockholders' equity is $67.3 million for the years ended December 30,
2007, December 31, 2006 and December 31, 2005, respectively.
(1) Results for the year ended December 27, 2009 include $0.8 million stock-based compensation expense
included in Cost of revenues; $8.7 million stock-based compensation expense and $1.0 million termination
costs included in Research and development expenses; $12.0 million stock-based compensation expense and
$0.6 million termination costs included in Selling, general and administrative expenses; $3.0 million of
non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $2.7
million foreign exchange loss on foreign tax liabilities; $0.5 million loss on subleased facilities; and $0.6
million income tax recovery which includes $6.5 million net deferred tax recovery relating to foreign
exchange translation of a foreign subsidiary, $5.0 million tax effect on intercompany transactions, $1.5
million year end tax adjustments including those based on completed filings and assessments received from
tax authorities and $1.5 million arrears interest relating to unrecognized tax benefits.
(2) Results for the year ended December 28, 2008 include $1.1 million stock-based compensation expense
included in Cost of revenues; $11.2 million stock-based compensation expense included in Research and
development expenses; $12.5 million stock based compensation expense included in Selling, general and
administrative expenses; $5.6 million of non-cash interest expense for the accretion of the debt discount
related to the senior convertible notes; $8.2 million foreign exchange gain on foreign tax liabilities; $15.0
million gain on repurchase of senior convertible notes, net; and $92.1 million net income tax recovery
including $98.0 million related to the net adjustment to accrual for unrecognized tax benefits, $5.6 million
deferred tax expense relating to unrealized gain on foreign exchange translation of a foreign subsidiary, $2.0
million tax adjustments based on completed tax filings and assessments and $2.3 million tax impact relating
to repatriation of earnings from a foreign jurisdiction.
(3) Results for the year ended December 30, 2007 include $1.7 million stock-based compensation expense
included in Cost of revenues; $16.6 million stock-based compensation expense included in Research and
development expenses; $17.1 million stock-based compensation expense and $2.2 million reversal of an
accrual for payroll-related taxes, included in Selling, general and administrative expenses; $8.4 million of
non-cash interest expense for the accretion of the debt discount related to the senior convertible notes; $18.2
million foreign exchange loss on our income tax liability; and $4.0 million recovery of prior years’ income
taxes and $3.8 million recovery of future income taxes, offset by $13.1 million of interest relating to the
liability for unrecognized tax benefit of prior years.
(4) Results for the year ended December 31, 2006 include $8.2 million purchase accounting adjustments to
inventory, $1.8 million stock-based compensation expense and $0.8 million in additional contractor costs
included in Cost of revenues; $16.2 million stock-based compensation expense included in Research and
development expenses; $2.4 million for employee-related taxes; $19.9 million stock-based compensation
expense and $0.2 million acquisition-related relocation expenses included in Selling, general and
administrative expenses; $7.8 million of non-cash interest expense for the accretion of the debt discount
related to the senior convertible notes; $0.5 million foreign exchange gain on our income tax liability; $29.9
million increase in our estimated tax provision for previous years as a result of a written communication
received in 2007 from a tax authority; and $7.0 million withholding and other taxes on repatriation of funds
included in the provision for income taxes.
(5) Results for the year ended December 31, 2005 include $0.9 million reversal of provision for doubtful
accounts receivable and $0.2 million stock-based compensation included in Selling, general and
administrative expenses; $1.4 million of non-cash interest expense for the accretion of the debt discount
related to the senior convertible notes; $6.3 million tax benefits comprised of $5.3 million excess research
and development tax credits and $1.0 million recovery of prior year sales tax; and $3.4 million foreign
exchange loss on an income tax liability.
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