Seagate 2010 Annual Report Download - page 67

Table of Contents
For fiscal year 2012, we expect capital investment to be at or below the low end of our targeted range of 6-8% of revenue. We require
substantial amounts of cash to fund scheduled payments of principal and interest on our indebtedness, future capital expenditures and any
increased working capital requirements. We will continue to evaluate and manage the retirement and replacement of existing debt and associated
obligations, including the issuance of new debt securities, exchanging existing debt securities for other debt securities and retiring debt pursuant
to privately negotiated transactions, open market purchases or otherwise. In addition, we may selectively pursue strategic alliances, acquisitions
and investments, which may require additional capital.
Contractual Obligations and Commitments
Our contractual cash obligations and commitments as of July 1, 2011, have been summarized in the table below:
As of July 1, 2011, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $75 million,
$8 million of which is expected to be settled within one year. Outside of 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 1, 2011, 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.
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Fiscal Year(s)
(Dollars in millions)
Total 2012 2013-
2014 2015- 2016 Thereafter
Contractual Cash Obligations:
Long-term debt
(1)
$
3,525
$
559
$
416
$
—
$
2,550
Interest payments on debt
1,613
241
446
364
562
Capital expenditures
166
163
3
—
—
Operating leases
(2)
193
42
51
23
77
Purchase obligations
(3)
1,158
1,150
8
—
—
Subtotal
6,655
2,155
924
387
3,189
Commitments:
Letters of credit or bank guarantees
31
27
4
—
—
Total
$
6,686
$
2,182
$
928
$
387
$
3,189
(1) Included in long-term debt for fiscal year 2012 is the principal amount of $559 million related to our 6.375% Notes.
(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.