Adobe 2013 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2013 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 115

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115

99
subject to the agreement of the applicable lenders, request up to an additional $500.0 million in commitments, for a maximum
aggregate commitment of $1.5 billion. Loans under the Credit Agreement will bear interest at either (i) the London Interbank
Offered Rate (“LIBOR”) plus a margin, based on our debt ratings, ranging from 0.795% and 1.30% or (ii) the base rate, which is
defined as the highest of (a) the agent’s prime rate, (b) the federal funds effective rate plus 0.50% or (c) LIBOR plus 1.00% plus
a margin, based on our debt ratings, ranging from 0.00% to 0.30%. Commitment fees are payable quarterly at rates between 0.08%
and 0.20% per year also based on our public debt ratings. Subject to certain conditions stated in the Credit Agreement, we and any
of our subsidiaries designated as additional borrowers may borrow, prepay and re-borrow amounts under the revolving credit
facility at any time during the term of the Credit Agreement.
The Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including a
financial covenant, events of default and indemnification provisions in favor of the lenders. The negative covenants include
restrictions regarding the incurrence of liens and indebtedness, certain merger and acquisition transactions, dispositions and other
matters, all subject to certain exceptions. The financial covenant, based on a quarterly financial test, requires us not to exceed a
maximum leverage ratio.
On March 1, 2013, we exercised an option under the Credit Agreement to extend the maturity date of the Credit Agreement
by one year to March 2, 2018. The facility will terminate and all amounts owing thereunder will be due and payable on the maturity
date unless (a) the commitments are terminated earlier upon the occurrence of certain events, including an event of default, or (b)
the maturity date is further extended upon our request, subject to the agreement of the lenders.
As of November 29, 2013, there were no outstanding borrowings under this Credit Agreement and we were in compliance
with all covenants.
Capital Lease Obligation
In the first quarter of fiscal 2013, we entered into a sale-leaseback agreement totaling $25.7 million over a period of 24
months. This transaction was classified as a capital lease obligation and was recorded at fair value. As of November 29, 2013, our
capital lease obligations of $17.9 million includes $14.7 million of current debt.
NOTE 17. NON-OPERATING INCOME (EXPENSE)
Non-operating income (expense) for fiscal 2013, 2012 and 2011 included the following (in thousands):
2013 2012 2011
Interest and other income (expense), net:
Interest income $ 21,887 $ 24,549 $ 24,506
Foreign exchange gains (losses) (21,001)(31,431)(30,226)
Realized gains on fixed income investment 4,090 3,152 2,012
Realized losses on fixed income investment (1,077)(278)(178)
Other 1,042 594 912
Interest and other income (expense), net $ 4,941 $ (3,414) $ (2,974)
Interest expense $ (67,508) $ (67,487) $ (66,952)
Investment gains (losses), net:
Realized investment gains $ 1,783 $ 8,918 $ 7,159
Unrealized investment gains 1,251 940 —
Realized investment losses (7,049)(104)(850)
Unrealized investment losses — (250)(452)
Investment gains (losses), net $ (4,015) $ 9,504 $ 5,857
Non-operating income (expense), net $ (66,582) $ (61,397) $ (64,069)
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)