Seagate 2010 Annual Report Download - page 121

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(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 2067 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 (including accrued lease payments relating to restructuring plans) with initial or
remaining terms of one year or more were as follows at July 1, 2011 (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 $24 million, $25 million
and $23 million for fiscal years 2011, 2010 and 2009, respectively. Total sublease rental income for fiscal years 2011, 2010 and 2009 was
$12 million, $10 million and $10 million, respectively. The Company subleases a portion of its facilities that it considers to be in excess of
current requirements. As of July 1, 2011, total future lease income to be recognized for the Company's existing subleases is approximately
$12 million.
During the fiscal year 2011, the Company entered into a sale-leaseback transaction for its AMK facility in Singapore. The transaction was
completed in the fourth fiscal quarter and net proceeds were $73 million. Upon execution of the sale, the Company recognized a $15 million gain
and an additional $26 million of deferred gain. The deferred gain is being recognized ratably over the minimum lease term of three years, as an
offset to the related rental expense. The Company considers this lease as a normal leaseback and classified the lease as an operating lease. As of
July 1, 2011, the total future minimum lease payments for the leaseback were $25 million, which are included in the total future minimum lease
payments for operating leases shown above.
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 2006 acquisition of Maxtor. As of July 1, 2011, the Company had a $17 million adverse leasehold interest
related to leases acquired from Maxtor.
114
Fiscal Years Ending
Operating Leases
(Dollars in millions)
2012
$
42
2013
30
2014
21
2015
13
2016
10
Thereafter
77
$
193