Seagate 2009 Annual Report Download - page 65

Table of Contents
Contractual Obligations and Commitments
Our contractual cash obligations and commitments as of July 2, 2010, have been summarized in the table below:
As of July 2, 2010, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $59 million,
none of which is expected to be paid within one year. We are unable to make a reasonably reliable estimate of when cash settlement with a
taxing authority will occur.
Off-Balance Sheet Arrangements
As of July 2, 2010, we did not have any material off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K).
Critical Accounting Policies
The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we
report in our consolidated financial statements. The SEC has defined the most critical accounting policies as the ones that are most important to
the portrayal of our financial condition and operating results, and require us to make our most difficult and subjective judgments, often as a result
of the need to make estimates of matters that are highly uncertain at the time of estimation. Based on this definition, our most critical policies
include: establishment of sales program accruals, establishment of warranty accruals, accounting for income taxes, and the accounting for
goodwill and other long-lived assets. Below, we discuss these policies further, as well as the estimates and judgments involved. We also have
other accounting policies and accounting estimates relating to uncollectible customer accounts, valuation of inventory, valuation of share-based
payments and restructuring. We believe that
63
Fiscal Year(s)
(Dollars in millions)
Total 2011
2012-
2013
2014-
2015
Thereafter
Contractual Cash Obligations:
Debt
(1)
$
2,549
$
359
$
560
$
430
$
1,200
Interest payments on debt
907
165
268
207
267
Capital expenditures
326
322
4
—
—
Operating leases
(2)
229
48
69
31
81
Purchase obligations
(3)
735
606
129
—
—
Subtotal
4,746
1,500
1,030
668
1,548
Commitments:
Letters of credit or bank guarantees
29
29
—
—
—
Total
$
4,775
$
1,529
$
1,030
$
668
$
1,548
(1) Included in debt for fiscal year 2011 is the principal amount of $326 million related to our 2.375% Notes and the principal
amount of $33 million related to our 5.75% Debentures. On June 25, 2010, we issued a notice of redemption to the holders
of the 2.375% Notes and the 5.75% Debentures. Therefore, the 2.375% Notes and 5.75% Debentures have been
reclassified as Current portion of long-term debt on our Consolidated Balance Sheet at July 2, 2010. In addition, under the
terms of the 2.375% indenture the notes were convertible up to the redemption date. We redeemed the entire outstanding
aggregate principal amount of the 2.375% Notes and 5.75% Debentures in our first quarter of fiscal year 2011.
(2) Includes total future minimum rent expense under non-cancelable leases for both occupied and vacated facilities (rent
expense is shown net of sublease income).
(3) Purchase obligations are defined as contractual obligations for the purchase of goods or services, which are enforceable
and legally binding on us, and that specify all significant terms.