Seagate 2008 Annual Report Download - page 127

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. Legal, Environmental, and Other Contingencies (Continued)
Other Matters
The Company is involved in a number of other judicial and administrative proceedings incidental to its business, and the Company may be
involved in various legal proceedings arising in the normal course of its business in the future. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on its financial
position or results of operations.
14. Commitments
Leases —The Company leases certain property, facilities and equipment under non-cancelable lease agreements. Land and facility leases
expire at various dates through 2082 and contain various provisions for rental adjustments including, in certain cases, a provision based on
increases in the Consumer Price Index. Also, certain leases provide for renewal of the lease at the Company's option at expiration of the lease.
All of the leases require the Company to pay property taxes, insurance and normal maintenance costs.
Future minimum lease payments for operating leases with initial or remaining terms of one year or more were as follows at July 3, 2009
(lease payments are shown net of sublease income):
Total rent expense for all land, facility and equipment operating leases, net of sublease income, was approximately $23 million, $32 million
and $36 million for fiscal years 2009, 2008, and 2007, respectively. Total sublease rental income for fiscal years 2009, 2008 and 2007 was
$10 million, $6 million and $11 million, respectively. The Company subleases a portion of its facilities that it considers to be in excess of current
requirements. As of July 3, 2009, total future lease income to be recognized for the Company's existing subleases is approximately $20 million.
The Company recorded amounts for both adverse and favorable leasehold interests and for exit costs that apply directly to the lease
commitments assumed through the acquisition of Maxtor. As of July 3, 2009, in accordance with SFAS No. 141, the Company has a $41 million
adverse leasehold interest and a $4 million favorable leasehold interest related to leases acquired from Maxtor. Both the adverse and favorable
leasehold interests are being amortized to Cost of revenue and Operating expenses over the remaining duration of the leases. In addition, the
Company had $29 million and $17 million remaining in accrued exit costs related to the planned exit of Maxtor leased excess facilities at July 3,
2009 and June 27, 2008, respectively.
125
Fiscal Years Ending
Operating
Leases
(Dollars in millions)
2010
$
43
2011
44
2012
38
2013
24
2014
16
Thereafter
93
$
258