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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
—
(
Continued)
The fair value of the Company’s investment in debt securities, by remaining contractual maturity, is as follows (in millions):
Fair Value Disclosures —The carrying value of cash equivalents approximates fair value. The fair values of short-term investments,
debentures, notes and loans are estimated based on quoted market prices as of June 27, 2008.
The carrying values and fair values of the Company’s financial instruments are as follows:
The fair value of the Company’s 2.375% and 6.8% convertible securities is a function, in part, of the Company’s stock price. Because the
Company’s stock price has decreased since June 27, 2008, the fair value of these securities has also decreased.
Investment Securities —As of June 27, 2008, the Company held auction rate securities in the amount of $31 million, all of which are
collateralized by pools of student loans guaranteed by the Federal Family Education Loan Program. During the fiscal 2008 year, these securities
failed to settle at auction and as a result the Company recorded an unrealized loss of $3 million and reclassified the securities to long-term
investments.
Derivative Financial Instruments —The Company recognizes all of its derivative financial instruments, principally foreign currency
forward contracts, in the balance sheet as either assets or liabilities and these derivative financial instruments are carried at fair value.
The Company may enter into foreign currency forward contracts to manage exposure related to certain foreign currency commitments,
certain foreign currency denominated balance sheet positions and anticipated foreign currency denominated expenditures. The Company’
s policy
prohibits it from entering into derivative financial instruments for speculative or trading purposes. During fiscal years 2008, 2007 and 2006, the
Company did not enter into any hedges of net investments in foreign operations.
84
June 27,
2008
June 29,
2007
Due in less than 1 year
$
432
$
916
Due in 1 to 3 years
85
27
$
517
$
943
June 27, 2008
June 29, 2007
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
(In millions)
Cash equivalents
$
911
$
911
$
862
$
862
Short
-
term investments
151
151
157
156
Long
-
term investments
28
28
—
—
Floating Rate Senior Notes due October 2009
(300
)
(293
)
(300
)
(300
)
6.375% Senior Notes due October 2011
(599
)
(584
)
(599
)
(588
)
6.8% Senior Notes due October 2016
(599
)
(555
)
(598
)
(577
)
6.8% Convertible Senior Notes due April 2010
(135
)
(142
)
(135
)
(145
)
5.75% Subordinated Debentures due March 2012
(41
)
(40
)
(45
)
(45
)
2.375% Convertible Senior Notes due August 2012
(326
)
(422
)
(326
)
(455
)
LIBOR Based China Manufacturing Facility Loan
(30
)
(30
)
(60
)
(60
)