Adobe 2015 Annual Report Download - page 53

Table of Contents
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million which consisted of $5.7 million and $5.3 million in payments related to termination benefits and contract terminations
and the closing of redundant facilities, respectively.
As of November 29, 2013, we had accrued total restructuring charges of $13.9 million of which approximately $11.7 million
related to the cost of closing redundant facilities. The remaining accrued restructuring charges of $2.2 million related to the cost
of termination benefits and contract terminations. During fiscal 2013, we made payments related to our restructuring plans totaling
$10.3 million which primarily consisted of $9.0 million in payments related to the closing of redundant facilities.
We believe that our existing cash and cash equivalents, short-term investments and cash generated from operations will be
sufficient to meet cash outlays for the restructuring actions described above.
See Note 10 of our Notes to Consolidated Financial Statements for additional information regarding our restructuring
plans.
Other Liquidity and Capital Resources Considerations
Our existing cash, cash equivalents and investment balances may fluctuate during fiscal 2016 due to changes in our planned
cash outlay, including changes in incremental costs such as direct and integration costs related to our acquisitions. Our cash and
investments totaled $3.99 billion as of November 27, 2015. Of this amount, approximately 85% was held by our foreign subsidiaries
and subject to material repatriation tax effects. Our intent is to permanently reinvest a significant portion of our earnings from
foreign operations, and current plans do not anticipate that we will need funds generated from foreign operations to fund our
domestic operations. In the event funds from foreign operations are needed to fund operations in the United States and if U.S. tax
has not already been previously provided, we would provide for and pay additional U.S. taxes in connection with repatriating
these funds.
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the risks detailed
in Part I, Item 1A titled “Risk Factors”. However, based on our current business plan and revenue prospects, we believe that our
existing cash, cash equivalents and investment balances, our anticipated cash flows from operations and our available credit facility
will be sufficient to meet our working capital and operating resource expenditure requirements for the next twelve months.
On March 2, 2012, we entered into a five-year $1 billion senior unsecured revolving credit agreement (the “Credit
Agreement”), providing for loans to us and certain of our subsidiaries. On March 1, 2013, we exercised our option under the Credit
Agreement to extend the maturity date of the Credit Agreement by one year to March 2, 2018. On July 27, 2015, we entered into
an amendment to further extend the maturity date of the Credit Agreement to July 27, 2020 and reallocated the facility among the
syndicate of lenders that are parties to the Credit Agreement. As of November 27, 2015, there were no outstanding borrowings
under this Credit Agreement and the entire $1 billion credit line remains available for borrowing.
As of November 27, 2015, the amount outstanding under our senior notes was $1.9 billion, consisting of $900 million of
4.75% senior notes due February 1, 2020 (the “2020 Notes”) and $1 billion of 3.25% senior notes due February 1, 2025 (together
with the 2020 Notes, the “Notes”).
Our short-term investment portfolio is primarily invested in corporate bonds and commercial paper, U.S. agency securities
and U.S. Treasury securities, foreign government securities, municipal securities and asset-backed securities.We use professional
investment management firms to manage a large portion of our invested cash. External investment firms managed, on average,
57% of our consolidated invested balances during fiscal 2015.
Stock Repurchase Program
To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from stock
issuances, we may repurchase shares in the open market or enter into structured repurchase agreements with third parties. In the
first quarter of fiscal 2015, the Board of Directors approved a new stock repurchase program granting the Company authority to
repurchase up to $2 billion in common stock through the end of fiscal 2017.
During fiscal 2015, 2014 and 2013, we entered into several structured stock repurchase agreements with large financial
institutions, whereupon we provided them with prepayments totaling $625 million, $600 million and $1.1 billion, respectively.
Of the $625 million in prepayments made during fiscal 2015, $425 million were under the new $2 billion stock repurchase program
and the remaining $200 million were under the previous $2 billion authority. The $600 million and $1.1 billion in prepayments
made during fiscal 2014 and 2013 were under the previous $2 billion stock repurchase authority. We enter into these agreements
in order to take advantage of repurchasing shares at a guaranteed discount to the Volume Weighted Average Price (“VWAP”) of
our common stock over a specified period of time. We only enter into such transactions when the discount that we receive is higher
than our estimate of the foregone return on our cash prepayments to the financial institutions. There were no explicit commissions