Seagate 2010 Annual Report Download - page 93

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
redeem and/or repurchase a portion of the Company's outstanding indebtedness and for general corporate purposes. The interest on the 2020
Notes is payable semi
-annually on May 1 and November 1 of each year. The 2020 Notes are redeemable any time prior to May 1, 2015 at the
option of the Company, in whole or in part, at a redemption price of 100% of the principal amount plus an "applicable premium" and accrued
and unpaid interest, if any, to the redemption date. The "applicable premium" will be equal to the greater of (1) 1% of the principal amount of the
2020 Notes, or (2) the excess, if any, of (a) the present value of the redemption price on May 1, 2015 plus interest payments due through May 1,
2015, discounted at the applicable Treasury rate as of the redemption date plus 50 basis points; over (b) the principal amount of such note. The
2020 Notes are redeemable at any time on or after May 1, 2015 at various prices expressed as a percentage of the principal amount, as set forth
in the indentures, plus accrued and unpaid interest, if any, to the redemption date. In addition, any time before May 1, 2013, the Company may
redeem up to 35% of the principal amount with the net cash proceeds from permitted sales of the Company's stock at a redemption price of
106.875% of the principal amount plus accrued interest to the redemption date.
$55 Million Aggregate Principal Amount of 5.75% Subordinated Debentures due March 2012 (the "5.75% Debentures"). On July 27,
2010, the Company redeemed the entire outstanding aggregate principal amount of the 5.75% Debentures for cash at 100% of their principal
amount, plus accrued and unpaid interest to the redemption date for approximately $34 million. The Company recorded a loss on the redemption
of approximately $2 million, which is included in Other, net in the Company's Consolidated Statement of Operations for the fiscal year ended
July 1, 2011.
Convertible Notes
$326 Million Aggregate Principal Amount of 2.375% Convertible Senior Notes due August 2012 (the "2.375% Notes"). On August 19,
2010, the Company redeemed the entire $326 million outstanding aggregate principal amount of the 2.375% Notes for cash at a redemption price
equal to 100.68% of their principal amount, plus accrued and unpaid interest to the redemption date for approximately $328 million. The
Company recorded a loss on the redemption of approximately $22 million, which is included in Other, net in the Company's Consolidated
Statements of Operations for the fiscal year ended July 1, 2011. The effective interest rate, contractual interest expense and amortization of debt
discount for the 2.375% Notes for the fiscal years ended July 1, 2011 and July 2, 2010 were as follows:
At July 1, 2011, future principal payments on long-term debt were as follows (in millions):
87
Fiscal Years Ended
(Dollars in millions, except for percentages)
July 1,
2011
July 2,
2010
Effective interest rate
6.9
%
6.9
%
Interest expense
—
contractual
$
1
$
8
Interest expense—amortization of debt
discount due to change in accounting
$
2
$
12
Fiscal Year
2012
$
559
2013
—
2014
416
2015
—
2016
—
Thereafter
2,550
$
3,525