Seagate 2003 Annual Report Download - page 77

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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12½% senior subordinated notes, a $4 million loss on the interest rate swap related to one of the term loans comprising the former senior credit
facilities and $1 million of other costs and expenses.
Long-term debt consisted of the following:
At July 2, 2004, future minimum principal payments on long-term debt were as follows:
As of July 2, 2004, the Company had $37 million of outstanding standby letters of credit and bankers’ guarantees issued under its $150
million revolving credit facility.
The Company is restricted in its ability to pay distributions to its shareholders by the covenants contained in the indenture governing its
senior notes and the credit agreement governing its senior secured credit facilities. The covenants contained in the indenture governing the
Company’s senior notes limit the aggregate amount of restricted payments, including distributions to shareholders, to 50% of cumulative
consolidated net income plus 100% of net cash proceeds received from the issuance of capital for the period beginning June 30, 2001 and
ending the most recent fiscal quarter for which financial statements are internally available. Currently, the most significant restriction on the
Company’s ability to pay dividends is under the credit agreement governing the Company’
s senior secured credit facilities, which limits annual
distributions to $150 million. The Company’s declaration of distributions is also subject to Cayman Islands law and the discretion of its board
of directors.
3. Compensation
July 2,
2004
June 27,
2003
(in millions)
LIBOR plus 2.0% term loan B
$
343
$
348
8.0% senior subordinated notes due 2009
400
400
Capitalized lease obligations with interest at 14% to 19.25% collateralized by by
certain manufacturing equipment and buildings
—
1
743
749
Less current portion
4
4
$
739
$
745
Fiscal Year
2005
$
4
2006
3
2007
336
2008
—
2009
400
Thereafter
—
$
743
Tax-Deferred Savings Plan
The Company has a tax-deferred savings plan, the Seagate 401(k) Plan (“the 40l(k) plan”), for the benefit of qualified employees. The 40l
(k) plan is designed to provide employees with an accumulation of funds at retirement. Qualified employees may elect to make contributions to
the 401(k) plan on a monthly basis. The Company may make annual contributions at the discretion of its board of directors. During fiscal years
2004, 2003 and 2002, the Company made contributions of $14 million, $15 million and $13 million, respectively.
76