Seagate 2011 Annual Report Download - page 115

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 June 29, 2012 (lease payments are shown net of sublease income):
Total rent expense for all land, facility and equipment operating leases, net of sublease income, was $34 million, $24 million and
$25 million for fiscal years 2012, 2011 and 2010, respectively. Total sublease rental income for fiscal years 2012, 2011 and 2010 was $6 million,
$12 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 June 29, 2012, total future lease income to be recognized for the Company's existing subleases is approximately $8 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
June 29, 2012, the total future minimum lease payments for the leaseback were $12 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 June 29, 2012, the Company had a $10 million adverse leasehold interest
related to leases acquired from Maxtor. The adverse leasehold interest is being amortized to Cost of revenue and Operating expenses over the
remaining duration of the leases. In addition, the Company had $12 million and $16 million remaining in accrued exit costs related to the
planned exit of Maxtor leased excess facilities at June 29, 2012 and July 1, 2011, respectively.
Capital Expenditures. The Company's non-cancelable commitments for construction of manufacturing facilities and purchases of
equipment approximated $236 million at June 29, 2012.
16. Guarantees
Indemnifications to Officers and Directors
On May 4, 2009, prior to the Redomestication (defined below) Seagate Technology, an exempted company incorporated with limited
liability under the laws of the Cayman Islands ("Seagate-Cayman"), then the parent company, entered into a new form of indemnification
agreement (the "Revised Indemnification Agreement") with its officers and directors of Seagate-Cayman and its subsidiaries (each, an
"Indemnitee"). The Revised Indemnification Agreement provides indemnification in addition to any of
109
Fiscal Years Ending
Operating Leases
(Dollars in millions)
2013
$
38
2014
27
2015
16
2016
11
2017
6
Thereafter
79
$
177