Seagate 2006 Annual Report Download - page 52

Table of Contents
and sales of short-term investments in excess of purchases thereof as well as net cash acquired from Maxtor.
Specifically, during fiscal year 2006, we invested approximately $1.0 billion in property, equipment and leasehold
improvements comprised of:
Net cash used in investing activities was approximately $1.1 billion for fiscal year 2005 and was primarily
attributable to expenditures for property, equipment and leasehold improvements and the purchases of short-term
investments in excess of maturities and sales thereof.
The increase in the investment in property, equipment and leasehold improvements during fiscal years 2007 and
2006 as compared with fiscal year 2005 was for increased capacity to support increased unit shipments and
additional capacity for the ramp-up and production of Seagate-designed disc drive products to replace legacy
Maxtor-designed products. For fiscal year 2008, we expect approximately $900 million in capital investment will be
required to continue to proceed with our planned media and substrate capacity expansions in Asia and to align
capacity additions with current levels of customer demand, while we continue to improve our utilization of capital
equipment.
Cash Used in Financing Activities
Net cash used in financing activities of $463 million for fiscal year 2007 was primarily attributable to
approximately $1.5 billion used for the repurchases of our common shares, $416 million used in the redemption of
our 8% Notes and $212 million of dividends paid to our shareholders, largely offset by approximately $1.5 billion
received from the issuance of long-
term debt and $219 million cash provided by employee stock option exercises and
employee stock purchases.
Net cash used in financing activities of $732 million for fiscal year 2006 was primarily attributable to
$399 million used in the repurchases of common shares, the repayment of a $340 million term loan and $155 million
of dividends paid to our shareholders, partially offset by $118 million cash provided by employee stock option
exercises and employee stock purchases.
Net cash used in financing activities of $35 million for fiscal year 2005 was primarily attributable to dividends
of $122 million paid to our shareholders and principal payments on our senior secured credit facilities offset by
$90 million in cash provided by employee stock option exercises and employee stock purchases.
Liquidity Sources and Cash Requirements and Commitments
Our principal sources of liquidity as of June 29, 2007, consisted of: (1) approximately $1.1 billion in cash, cash
equivalents, and short-term investments, (2) cash we expect to generate from operations and (3) a $500 million
revolving credit facility.
Our $500 million revolving credit facility matures in September 2011. The $500 million revolving facility,
which we entered into in September 2006, replaced our previous $100 million revolving credit facility. The
$500 million revolving credit facility is available for cash borrowings and for the issuance of letters of credit up to a
sub-limit of $100 million. Although no borrowings have been drawn under this revolving credit facility to date, we
had utilized $47 million for outstanding letters of credit and bankers’ guarantees as of June 29, 2007, leaving
$453 million for additional borrowings, subject to compliance with financial covenants and other customary
conditions to borrowing.
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• $336 million for manufacturing facilities and equipment related to our subassembly and disc drive final
assembly and test facilities in the United States and the Far East;
• $349 million to upgrade the capabilities of our thin-film media operations in the United States, Singapore and
Northern Ireland;
• $276 million for manufacturing facilities and equipment for our recording head operations in the United
States, the Far East and Northern Ireland; and
•
$
47 million for other capital additions.