Seagate 2003 Annual Report Download - page 23

Table of Contents
ITEM 7.
MANAGEMENT
’
S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results of operations for the fiscal year ended July 2, 2004, the fiscal year
ended June 27, 2003, and the fiscal year ended June 28, 2002. Unless the context indicates otherwise, as used herein, the terms “we,” “us”
and “our”
refer to Seagate Technology, an exempted company incorporated with limited liability under the laws of the Cayman Islands, and its
subsidiaries. New SAC, a Cayman Islands limited liability corporation is our controlling shareholder. We were formed in August 2000 to be a
holding company for the rigid disc drive operating business and the storage area networks operating business of Seagate Technology, Inc., a
Delaware corporation, which we refer to herein as
“Seagate Delaware.” In November 2000, we acquired the rigid disc drive business and the
storage area networks business of Seagate Delaware in a series of transactions that we refer to herein as the November 2000 transactions. We
sold XIOtech Corporation, our storage area networks operating business, in November 2002.
You should read this discussion in conjunction with “Item 6. Selected Financial Data” and “Item 8. Financial Statements and
Supplementary Data” included elsewhere in this report. Except as noted, references to any fiscal year mean the twelve-
month period ending on
the Friday closest to June 30 of that year.
Our Company
We are a leader in the design, manufacturing and marketing of rigid disc drives. Rigid disc drives, which are commonly referred to as
disc drives or hard drives, are used as the primary medium for storing electronic information in systems ranging from desktop and notebook
computers and consumer electronic devices to data centers delivering information over corporate networks and the Internet. We produce a
broad range of rigid disc drive products that make us a leader in enterprise applications, where our products are primarily used in enterprise
servers, mainframes and workstations; desktop applications, where our products are used in PC’s; mobile computing applications, where our
products are used in notebook computers; and consumer electronic applications, where our products are used in digital video recorders
(DVR’s), gaming platforms, and digital music players.
We sell our rigid disc drives primarily to major OEMs and also market to distributors under our globally recognized brand name. For
fiscal years 2004, 2003 and 2002, approximately 60%, 61% and 66%, respectively, of our rigid disc drive revenue was from sales to OEMs,
including customers such as Hewlett-Packard, Dell, IBM, EMC, and Microsoft. We have longstanding relationships with many of these OEM
customers. We also have key relationships with major distributors, who sell our rigid disc drive products to small OEMs, dealers, system
integrators and retailers throughout most of the world. Also, we are currently expanding our direct sales to retailers. For fiscal years 2004, 2003
and 2002, approximately 30%, 34% and 39%, respectively, of our revenue came from customers located in North America, approximately
30%, 31% and 31%, respectively, came from customers located in Europe and approximately 40%, 35% and 30%, respectively, came from
customers located in the Far East. Substantially all of our revenue is denominated in U.S. dollars.
November 2000 Transactions
Prior to November 22, 2000, Suez Acquisition Company, the predecessor to New SAC, entered into a stock purchase agreement with
Seagate Delaware and Seagate Software Holdings, Inc., a subsidiary of Seagate Delaware. Concurrently, Seagate Delaware and VERITAS
Software Corporation (“VERITAS”) entered into an agreement and plan of merger and reorganization. Suez Acquisition Company was an
exempted company incorporated with limited liability under the laws of the Cayman Islands and formed solely for the purpose of entering into
the stock purchase agreement and undertaking the related acquisitions. Suez Acquisition Company later assigned all of its rights and
obligations under the stock purchase agreement to New SAC, an exempted company incorporated with limited liability under the laws of the
Cayman Islands and formed for the same purpose. At the closing of those transactions, New SAC owned 400,000,000 shares of our preferred
stock.
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