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SEAGATE TECHNOLOGY AND ITS PREDECESSOR
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(CONTINUED)
The following table summarizes the Company’s operations by geographic area:
8. Purchase Accounting
Seagate Technology
Predecessor
Fiscal
Year
Ended
June 27,
2003
Fiscal
Year
Ended
June 28,
2002
Period from
November 23,
2000 to
June 29,
2001
Period from
July 1,
2000 to
November 22,
2000
(in millions)
Revenue from external customers (1):
United States
$
2,151
$
2,398
$
1,441
$
1,103
The Netherlands
1,562
1,438
881
461
Singapore
2,137
1,627
970
445
Other
636
624
364
301
Consolidated
$
6,486
$
6,087
$
3,656
$
2,310
Long
-
lived assets:
United States
$
504
$
805
$
524
Singapore
287
204
194
Other
444
124
310
Consolidated
$
1,235
$
1,133
$
1,028
(1)
Revenue is attributed to countries based on the shipping location.
On November 22, 2000, under the stock purchase agreement, the Company’s parent, New SAC completed the purchase of substantially
all of the operating assets of, and assumption of the operating liabilities of, Seagate Delaware and its consolidated subsidiaries. The total net
purchase price paid by New SAC for all the businesses of Seagate Delaware, including Seagate Technology, was $1.840 billion in cash,
including transaction costs of approximately $25 million. Immediately thereafter, in a separate and independent transaction, Seagate Delaware
and VERITAS completed their merger under the Merger Agreement. At the time of the merger, Seagate Delaware’s assets included a specified
amount of cash, an investment in VERITAS, and certain specified investments and liabilities. In connection with the Merger Agreement,
Seagate Delaware, VERITAS and New SAC entered into an Indemnification Agreement, pursuant to which these entities and certain other
subsidiaries of Seagate Delaware agreed to certain indemnification provisions regarding tax and other matters that may arise in connection with
the stock purchase agreement and Merger Agreement.
New SAC accounted for this transaction as a purchase in accordance with Accounting Principles Board, or APB, Opinion No. 16,
“Business Combinations.” All acquired tangible assets, identifiable intangible assets as well as assumed liabilities were valued based on their
relative fair values and reorganized into the following businesses: (1) the rigid disc drive business, which is now the Company, which included
the storage area networks business, (2) the removable storage solutions business, which is now Certance Holdings, a direct subsidiary of New
SAC and an affiliate of the Company, (3) the software business, which is now Crystal Decisions, an indirect subsidiary of New SAC and an
affiliate of the Company, and (4) an investment holding company, which is now STIH, a direct subsidiary of New SAC and an affiliate of the
Company. Each of Certance Holdings, Crystal Decisions and STIH are direct or indirect subsidiaries of New SAC and are not owned by the
Company. The fair value of the net assets exceeded the net purchase price by approximately $909 million. Accordingly, the resultant negative
goodwill was allocated on a pro rata basis to acquired long-lived assets of New SAC, primarily property, plant and equipment, and identified
intangible assets, and reduced the recorded fair value amounts by approximately 46% for all the acquired businesses. In accordance with Staff
Accounting Bulletin No. 73, “Push Down Basis of Accounting”, the Company has reflected its parent company’s basis in the rigid disc drive
and storage area networks operating businesses in the related balance sheet at the date of acquisition.
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