Seagate 2011 Annual Report Download - page 58

Table of Contents
We recorded an income tax provision of $68 million for fiscal year 2011 compared to an income tax benefit of $40 million for fiscal year
2010. Our fiscal year 2011 provision for income taxes included non-U.S. income taxes recorded for increases in income tax reserves for non-
U.S. income tax positions taken in prior fiscal years, partially offset by tax benefits recorded for the release of income tax reserves associated
with settlements of income tax audits and the expiration of certain statutes of limitation. Our fiscal year 2010 income tax benefit included
$55 million of deferred tax benefit from the reversal of a portion of the U.S. valuation allowance recorded in earlier years.
Our income tax provision recorded for fiscal year 2011 differed from the provision for income taxes that would be derived by applying the
Irish statutory rate of 25% to income before income taxes primarily due to the net effect of (i) tax benefits related to non-
U.S. earnings generated
in jurisdictions that are subject to tax holidays or tax incentive programs and are considered indefinitely reinvested outside of Ireland, (ii) income
tax expense related to intercompany transactions, (iii) a decrease in valuation allowance for certain deferred tax assets, and (iv) non-U.S. losses
with no tax benefit. Our benefit for income taxes recorded for the comparative fiscal year ended July 2, 2010 differed from the provision
(benefit) for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes primarily due to the
net effect of (i) tax benefits related to non-U.S. earnings generated in jurisdictions that are subject to tax holidays or tax incentive programs and
are considered indefinitely reinvested outside of Ireland, (ii) a decrease in valuation allowance for certain deferred tax assets, (iii) non-U.S.
losses with no tax benefit, and (iv) tax expense related to intercompany transactions.
Liquidity and Capital Resources
The following sections discuss our principal liquidity requirements, as well as our sources and uses of cash and our liquidity and capital
resources. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of
purchase. Our short-term investments consist primarily of readily marketable debt securities with remaining maturities of more than 90 days at
the time of purchase. The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We
attempt to mitigate default risk by investing in high-quality investment grade securities, limiting the time to maturity and by monitoring the
counter-parties and underlying obligors closely. We monitor our investment portfolio and position our portfolio to respond appropriately to a
reduction in credit rating of any investment issuer, guarantor or depository. We intend to maintain a highly liquid portfolio by investing only in
those marketable securities that we believe have active secondary or resale markets. We believe our cash equivalents and short-term investments
are liquid and accessible. We operate in some countries that may have restrictive regulations over the movement of cash and/or foreign exchange
across their borders. These restrictions have not impeded our ability to conduct business in those countries, nor do we expect them to in the next
12 months. We are not aware of any downgrades, losses or other significant deterioration in the fair value of our cash equivalents or short-term
investments and accordingly, we do not believe the fair value of our short-term investments has significantly changed from the values reported
as of June 29, 2012.
Cash and cash equivalents, short-term investments, and restricted cash and investments
54
As of
(Dollars in millions)
June 29,
2012
July 1,
2011
Change
Cash and cash equivalents
$
1,707
$
2,677
$
(970
)
Short
-
term investments
411
474
(63
)
Restricted cash and investments
93
102
(9
)
Total
$
2,211
$
3,253
$
(1,042
)