Seagate 2010 Annual Report Download - page 79

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
Organization
Effective as of July 3, 2010, Seagate Technology public limited company (plc), an Irish public limited company, ("Seagate-Ireland",
"Seagate" or the "Company") became the successor to Seagate Technology, an exempted company incorporated with limited liability under the
laws of the Cayman Islands ("Seagate-Cayman"). In connection with the reorganization, all issued and outstanding Seagate-Cayman common
shares were cancelled and ceased to exist, and Seagate-Ireland issued ordinary shares on a one-for-one basis to the holders of Seagate-Cayman
common shares for each Seagate-Cayman common share that was cancelled. For presentation purposes, unless otherwise noted, common shares
prior to the reorganization and ordinary shares subsequent to the reorganization are referred to herein as ordinary shares.
The Company designs, manufactures, markets and sells hard disk drives. Hard disk drives, which are commonly referred to as disk drives or
hard drives, are used as the primary medium for storing electronic data. The Company produces a broad range of disk drive products addressing
enterprise applications, where its products are primarily used in enterprise servers, mainframes and workstations; client compute applications,
where its products are used in desktop and notebook computers; and client non-compute applications, where its products are used in a wide
variety of end user devices such as digital video recorders (DVRs), personal data backup systems, portable external storage systems and digital
media systems. The Company sells its disk drives primarily to major original equipment manufacturers (OEMs), distributors and retailers. In
addition to manufacturing and selling disk drives, the Company provides storage services for small- to medium-sized businesses, including
online backup, data protection and recovery solutions.
Basis of Presentation and Consolidation
The consolidated financial statements include the accounts of the Company and all its wholly-owned subsidiaries, after elimination of
intercompany transactions and balances. The preparation of financial statements in accordance with accounting principles generally accepted in
the United States also requires management to make estimates and assumptions that affect the amounts reported in the Company's consolidated
financial statements and accompanying notes. Actual results could differ materially from those estimates. The methods, estimates and judgments
the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its
consolidated financial statements. The consolidated financial statements reflect, in the opinion of management, all material adjustments
necessary to present fairly the consolidated financial position, results of operations, cash flows and shareholders' equity for the periods presented.
The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. Accordingly,
fiscal years 2011 and 2010 were comprised of 52 weeks and ended on July 1, 2011 and July 2, 2010, respectively. Fiscal year 2009 was
comprised of 53 weeks and ended on July 3, 2009. All references to years in these Notes to Consolidated Financial Statements represent fiscal
years unless otherwise noted. Fiscal year 2012 will be 52 weeks and will end on June 29, 2012.
Summary of Significant Accounting Policies
Cash, Cash Equivalents and Short-Term Investments. The Company considers all highly liquid investments with a remaining maturity of
90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The
Company's short-term investments are primarily comprised of readily marketable debt securities with remaining maturities of more than 90 days
at the time of purchase. With the exception of restricted cash and investments, the Company has
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