Seagate 2002 Annual Report Download - page 43

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Net cash provided by (used in) operating activities was $882 million for fiscal year 2003, $905 million for fiscal year 2002, $269 million
for the period from November 23, 2000 to June 29, 2001 and $121 million for the period from July 1, 2000 to November 22, 2000. Net cash
provided by operating activities for fiscal year 2003 was primarily attributable to net income as adjusted for non-
cash expenses for depreciation
and amortization and deferred compensation payments. Net cash provided by operating activities for fiscal year 2002 was primarily attributable
to net income as adjusted for non-cash expenses for depreciation and amortization, deferred income taxes, deferred compensation and the
write-off of debt issuance costs, and as adjusted to reclassify the cash payment for the redemption premium on the 12½% senior subordinated
notes to net cash used in financing activities. Net cash provided by operating activities during the period from November 23, 2000 to June 29,
2001, was primarily attributable to a net loss, which was more than offset by net non-cash charges such as depreciation, amortization and in-
process research and development and a decrease in net operating assets. Net cash provided by operating activities during the period from July
1, 2000 to November 22, 2000 was primarily attributable to a net loss, which was more than offset by net non-cash charges such as
depreciation, amortization, deferred income taxes and compensation expense related to the acceleration of vesting of stock options in
connection with the November 2000 transactions.
Net cash provided by (used in) investing activities was ($754) for fiscal year 2003, ($610) million for fiscal year 2002, ($1.140) billion
for the period from November 23, 2000 to June 29, 2001 and $829 million for the period from July 1, 2000 to November 22, 2000. Net cash
used in investing activities for fiscal year 2003 was primarily attributable to expenditures for property, equipment and leasehold improvements
and the purchases of short-term investments in excess of maturities. Net cash used in investing activities for fiscal year 2002 was primarily
attributable to expenditures for property, equipment and leasehold improvements. Net cash used in investing activities during the period from
November 23, 2000 to June 29, 2001, was primarily used to acquire property, equipment and leasehold improvements, the purchase of the rigid
disc drive and storage area networks divisions of our predecessor, and purchases of short-term investments in excess of maturities. Net cash
provided by investment activities during the period from July 1, 2000 to November 22, 2000, was primarily attributable to net sales and
maturities of investments offset by expenditures for property, equipment and leasehold improvements and the establishment of a restricted cash
account related to the transaction with VERITAS.
Net cash provided by (used in) financing activities was $9 million for fiscal year 2003, ($411) million for fiscal year 2002, $1.599 billion
for the period from November 23, 2000 to June 29, 2001 and ($1.818) billion for the period from July 1, 2000 to November 22, 2000. Net cash
provided by financing activities for fiscal year 2003 was primarily attributable to cash provided from the sale of our common shares partially
offset by distributions to our shareholders. Net cash used in financing activities for fiscal year 2002 was primarily attributable to the
refinancing and overall reduction of all of our outstanding indebtedness, payment of distributions to our shareholders and payment of the
redemption premium on the 12
1
/
2
% senior subordinated notes. Net cash provided by financing activities during the period from November
23, 2000 to June 29, 2001 was primarily a result of cash provided from the issuance of our term loans under our former senior secured credit
facilities and 12
1
/
2
% senior subordinated notes and cash provided from the issuance of stock to our parent company. Net cash used in
financing activities during the period from July 1, 2000 to November 22, 2000, was attributable to excess cash provided to our predecessor’s
parent company, Seagate Delaware, for distribution to its shareholders as a result of the November 2000 transactions and repayment of our
predecessor’s senior notes and debentures.
Liquidity Sources and Cash Requirements and Commitments
Consistent with our quarterly dividend policy in effect at such time, our board of directors declared a quarterly distribution of $0.03 per
share, or approximately $13 million, which was paid on May 23, 2003 to all common shareholders of record as of May 9, 2003, including New
SAC.
On June 27, 2003, our board of directors amended our quarterly dividend policy and, pursuant to our amended dividend policy, we expect
to pay our shareholders a quarterly distribution of up to $0.04 per share ($0.16 annually) so long as the aggregate amount of the distributions
does not exceed 50% of our consolidated net income for the quarter in which the distributions are declared. Our ability to continue to pay
quarterly distributions will be subject to, among other things, general business conditions within the rigid disc drive industry, our financial
results, the impact of paying distributions on our credit ratings, and legal and contractual restrictions on the payment of distributions by our
subsidiaries to us or by us to our shareholders, including restrictions imposed by the covenants contained in the indenture governing our senior
notes. On July 14, 2003, our board of directors declared a quarterly distribution of $0.04 per share to be paid on or before August 22, 2003 to
our shareholders of record as of August 8, 2003.
Our principal sources of liquidity as of June 27, 2003 consisted of: (1) $1.194 billion in cash, cash equivalents, and short-term
investments, (2) a $150 million revolving credit facility, of which $31 million had been used for outstanding letters of credit and bankers’
guarantees as of June 27, 2003, and (3) cash we expect to generate from operations during this fiscal year.
Since the closing of the November 2000 transactions, our principal liquidity requirements have been to service our debt and meet our
working capital, research and development and capital expenditure needs. In addition, in the second half of fiscal year 2002 and through fiscal
year 2003, we made distributions to our shareholders.
38