Seagate 2008 Annual Report Download - page 65

Table of Contents
Net cash used in financing activities of approximately $1.5 billion for fiscal year 2008 was primarily attributable to the repurchases of our
common shares totaling $1.5 billion. Additionally, we paid approximately $216 million in dividends to our shareholders, repaid $34 million of
our long-term debt and received approximately $178 million in cash from employee stock option exercises and employee stock purchases.
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.
Liquidity Sources, Cash Requirements and Commitments
Our primary sources of liquidity as of July 3, 2009, consisted of: (1) approximately $1.5 billion in cash, cash equivalents, and short-term
investments, (2) cash we expect to generate from operations and (3) a $350 million credit facility, which is committed until 2011, but is currently
fully drawn. We also have restricted cash and investments that include $380 million held in escrow available for the retirement of debt and
$85 million available for the payment of employee deferred compensation liabilities.
Our liquidity requirements are primarily to meet our working capital, research and development, and capital expenditure needs, and to
service our debt. Our ability to fund these requirements and comply with the financial covenants under our debt agreements will depend on our
future operations, performance and cash flow and is subject to prevailing global macroeconomic conditions and financial, business and other
factors, some of which are beyond our control. We believe that our sources of cash will be sufficient to fund our operations and meet our cash
requirements for at least the next 12 months.
The carrying value of debt as of July 3, 2009 and June 27, 2008 was $2,727 million and $2,030 million, respectively. The table below
presents the principal amounts of our outstanding debt in order of maturity:
On April 3, 2009, we amended the credit agreement governing our credit facility in order to relax certain financial covenants under the
credit agreement. The amendment also reduced the facility size from $500 million to $350 million. The facility size may be further reduced from
$350 million by cash proceeds from certain transactions over specified amounts, including certain asset sales and debt and equity issuances,
which would require us to concurrently reduce our borrowings under the credit facility by such amounts to comply with the reduction in
commitments. The amendment also increased the interest rate margin applicable on all funded loans under the credit facility to a rate of LIBOR
plus 350 basis points.
The $350 million outstanding under the credit facility prior to the amendment remains outstanding under the amended credit facility, which
continues to mature in September 2011. The obligations under
63
Fiscal Years Ended
(Dollars in millions)
July 3,
2009
June 27,
2008
Change
LIBOR Based China Manufacturing Facility Loans
$
—
$
30
$
(30
)
Floating Rate Senior Notes due October 2009
300
300
—
6.8% Convertible Senior Notes due April 2010
116
135
(19
)
LIBOR Based Credit Facility
350
—
350
6.375% Senior Notes due October 2011
600
600
—
5.75% Subordinated debentures due March 2012
40
45
(5
)
2.375% Convertible Senior Notes due August 2012
326
326
—
10.0% Senior Secured Second
-
Priority Notes due May 2014
430
—
430
6.8% Senior Notes due October 2016
600
600
—
Total
$
2,762
$
2,036
$
726