Adobe 2015 Annual Report Download - page 49

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Table of Contents
49
Non-Operating Income (Expense), Net (dollars in millions)
Fiscal
2015 Fiscal
2014 Fiscal
2013 % Change
2015-2014 % Change
2014-2013
Interest and other income (expense), net $ 33.9 $ 7.3 $ 4.9 * 49 %
Percentage of total revenue ** ** **
Interest expense (64.2) (59.7) (67.5) 8 % (12)%
Percentage of total revenue (1)% (1)% (2)%
Investment gains (losses), net 1.0 1.1 (4.0) * *
Percentage of total revenue ** ** **
Total non-operating income (expense), net $ (29.3) $ (51.3) $ (66.6) (43)% (23)%
_________________________________________
(*) Percentage is not meaningful.
(**) Percentage is less than 1%.
Interest and Other Income (Expense), Net
Interest and other income (expense), net consists primarily of interest earned on cash, cash equivalents and short-term fixed
income investments. Interest and other income (expense), net also includes gains and losses on fixed income investments and
foreign exchange gains and losses other than any gains recorded to revenue from our hedging programs.
Interest and other income (expense), net increased in fiscal 2015 as compared to fiscal 2014 primarily due to the gain on
the sale of certain property assets and, to a lesser extent, an increased average investment balance and average interest rate. See
Note 6 of our Notes to Consolidated Financial Statements for further details regarding the sale of our property assets.
Interest and other income (expense), net increased in fiscal 2014 as compared to fiscal 2013 primarily due to decreased
foreign currency losses and increased realized gains on fixed income investments. The increases were partially offset by decreased
interest income on our investment in lease receivable due to the purchase of the East and West Towers of our corporate headquarter
offices during fiscal 2014. See Note 15 of our Notes to Consolidated Financial Statements for further details regarding our
investment in lease receivables.
Interest Expense
Interest expense primarily represents interest associated with our senior notes and interest rate swaps. Interest on our senior
notes is payable semi-annually, in arrears, on February 1 and August 1. Floating interest payments on the interest rate swaps are
paid monthly. The fixed-rate interest receivable on the swaps is received semi-annually concurrent with the senior notes interest
payments.
Interest expense increased during fiscal 2015 as compared to fiscal 2014 primarily due to the increase in total debt, partially
offset by the favorable impact of the interest rate swaps.
Interest expense decreased during fiscal 2014 as compared to fiscal 2013 due to the favorable impact of the interest rate
swaps. See Notes 5 and 13 of our Notes to Consolidated Financial Statements for further details regarding our interest rate swaps.
Investment Gains (Losses), Net
Investment gains (losses), net consists principally of realized gains or losses from the sale of marketable equity investments,
other-than-temporary declines in the value of marketable and non-marketable equity securities and unrealized holding gains and
losses associated with our deferred compensation plan assets (classified as trading securities) and gains and losses associated with
our direct and indirect investments in privately held companies.
During fiscal 2015, total investment gains (losses), net remained stable compared to fiscal 2014.
During fiscal 2014, total investment gains (losses), net increased to net gains primarily due to write-downs for other-than-
temporary declines in value of our direct investments in privately held companies in fiscal 2013 that did not recur in fiscal 2014,
offset in part by a decrease in net gains related to our trading securities.