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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
restructuring plan implemented in fiscal year 2002 (the “fiscal year 2002 restructuring plan”) was established to align the Company’s global
workforce and manufacturing capacity with existing and anticipated future market requirements, primarily in its IT operations and in its Far
East operations in China. The restructuring charges were comprised of $10 million for employee termination costs, $2 million for contract
cancellations and $1 million for the write-off of excess manufacturing equipment. The fiscal year 2002 restructuring plan was substantially
complete prior to the end of the first quarter of fiscal year 2003.
The following table summarizes the Company’s restructuring activities for fiscal years ended July 2, 2004, June 27, 2003 and June 28,
2002:
6. Business Segment and Geographic Information
Severance
and
Benefits
Excess
Facilities
Equipment
Contract
Cancellations
Other
Total
(in millions)
Accrual balances, June 29, 2001
$
34
$
11
$
—
$
5
$
9
$
59
Restructuring charge
10
1
2
—
13
Cash payments
(37
)
(7
)
—
(
1
)
(3
)
(48
)
Non
-
cash charges
—
—
(
1
)
—
—
(
1
)
Adjustments and reclassifications
(3
)
5
—
(
5
)
(6
)
(9
)
Accrual balances, June 28, 2002
4
9
—
1
—
14
Restructuring charge
19
—
—
—
—
19
Cash payments
(18
)
—
—
—
—
(
18
)
Adjustments and reclassifications
—
(
9
)
—
(
1
)
—
(
10
)
Accrual balances, June 27, 2003
5
—
—
—
—
5
Restructuring charge
59
—
—
—
—
59
Cash payments
(36
)
—
—
—
—
(
36
)
Non
-
cash charges
(1
)
—
—
—
—
(
1
)
Accrual balances, July 2, 2004
$
27
$
—
$
—
$
—
$
—
$
27
Prior to the Company’
s sale of XIOtech Corporation to New SAC on November 4, 2002, the Company had two operating segments: rigid
disc drives and storage area networks, however, only the rigid disc drive business was a reportable segment. See Note 10, Sale of XIOtech
Corporation. The operating results for XIOtech are included in the Company’s consolidated results of operations through the date that XIOtech
was sold to New SAC in November 2002 and are included in the “other” category below. The Company has identified its Chief Executive
Officer, or CEO, as the Chief Operating Decision Maker. Gross profit from operations is defined as revenue less cost of revenue.
In each of fiscal years 2004 and 2003, Hewlett-Packard Corporation accounted for more than 10% of consolidated revenue. In fiscal year
2002, on a combined basis Compaq Computer Corporation and Hewlett-Packard Corporation (Hewlett-Packard Corporation acquired Compaq
Computer Corporation in May 2002) accounted for more than 10% of consolidated revenue. No other customer accounted for more than 10%
of consolidated revenues in any year presented.
Long-lived assets consist of property, equipment and leasehold improvements, capital leases, equity investments, goodwill and other
intangibles, and other non-current assets as recorded by the Company’s operations in each area.
85