Seagate 2010 Annual Report Download - page 97

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Irish income taxes have not been provided as of July 1, 2011 was approximately $2.5 billion. If such amount were remitted to Ireland as a
dividend, it is likely that tax at 25% or approximately $625 million would result.
As of July 1, 2011 and July 2, 2010, the Company had approximately $128 million and $115 million, respectively, in unrecognized tax
benefits excluding interest and penalties. The amount of unrecognized tax benefits, if recognized, that would impact the effective tax rate were
$128 million and $115 million as of July 1, 2011 and July 2, 2010, respectively, subject to certain future valuation allowance reversals.
The following table summarizes the activity related to the Company's gross unrecognized tax benefits:
It is the Company's policy to include interest and penalties related to unrecognized tax benefits in the provision for taxes on the
Consolidated Statements of Operations. During fiscal year 2011, the Company recognized a net tax expense for interest and penalties of less than
$1 million as compared to a net benefit of $1 million and $6 million during fiscal year 2010 and fiscal year 2009, respectively. As of July 1,
2011, the Company had $15 million of accrued interest and penalties related to unrecognized tax benefits which was unchanged from fiscal year
2010.
During the 12 months beginning July 2, 2011, the Company expects to reduce its unrecognized tax benefits by approximately $10 million as
a result of the expiration of certain statutes of limitation. The Company does not believe it is reasonably possible that other unrecognized tax
benefits will materially change in the next 12 months.
The Company is subject to taxation in many jurisdictions globally and is required to file U.S. federal, U.S. state and non-U.S. income tax
returns. In May 2011, the U.S. Internal Revenue Service (IRS) completed its field examination of the Company's U.S. federal income tax returns
for fiscal years ending in 2005 through 2007. The IRS issued a Revenue Agent's Report and proposed certain adjustments. The Company is
currently contesting certain of these proposed adjustments through the IRS Appeals Office. The Company believes that the resolution of these
disputed issues will have no material impact on its financial statements.
With respect to U.S. state and non-
U.S. income tax returns, the Company is generally no longer subject to tax examinations for years ending
prior to fiscal year 2003. The Company is also no longer subject to tax examination of U.S. federal income tax returns for years prior to fiscal
year 2005.
91
Fiscal Years Ended
(Dollars in millions)
July 1,
2011 July 2, 2010 July 3, 2009
Balance of unrecognized tax benefits
at the beginning of the year
$
115
$
118
$
374
Gross increase for tax positions of
prior years
30
2
49
Gross decrease for tax positions of
prior years
(24
)
(5
)
(287
)
Gross increase for tax positions of
current year
13
6
13
Gross decrease for tax positions of
current year
—
—
—
Settlements
—
(
4
)
—
Lapse of statutes of limitation
(10
)
(3
)
(23
)
Non
-
U.S. exchange (gain)/loss
4
1
(8
)
Balance of unrecognized tax benefits
at the end of the year
$
128
$
115
$
118