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Table of Contents
Contractual Obligations and Commitments
Our contractual cash obligations and commitments as of June 29, 2012, have been summarized in the table below:
As of June 29, 2012, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $82 million,
none of which is expected to be settled within one year. Outside of one year, we are unable to make a reasonably reliable estimate of when cash
settlement with a taxing authority will occur.
Off-Balance Sheet Arrangements
As of June 29, 2012, we did not have any material off-balance sheet arrangements (as defined in Item 303(a)(4)(ii) of Regulation S-K).
Critical Accounting Policies
The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we
report in our consolidated financial statements. The SEC has defined the most critical accounting policies as the ones that are most important to
the portrayal of our financial condition and operating results, and require us to make our most difficult and subjective judgments, often as a result
of the need to make estimates of matters that are highly uncertain at the time of estimation. Based on this definition, our most critical policies
include: establishment of sales program accruals, establishment of warranty accruals, accounting for income taxes, and the accounting for
goodwill and other long-lived assets. Below, we discuss these policies further, as well as the estimates and judgments involved. We also have
other accounting policies and accounting estimates relating to uncollectible customer accounts, valuation of inventory, valuation of share-based
payments and restructuring. We believe that these other accounting policies and accounting estimates either do not generally require us to make
estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of
operations for a given period.
Establishment of Sales Program Accruals. We establish certain distributor and OEM sales programs aimed at increasing customer
demand. For the distribution channel, these programs typically involve
58
Fiscal Year(s)
(Dollars in millions)
Total
2013
2014-
2015
2016-
2017
Thereafter
Contractual Cash Obligations:
Long
-
term debt
$
2,869
$
—
$
319
$
600
$
1,950
Interest payments on debt
1,368
214
417
322
415
Capital expenditures
236
192
44
—
—
Operating leases
(1)
177
38
43
17
79
Purchase obligations
(2)
972
972
—
—
—
Subtotal
5,622
1,416
823
939
2,444
Commitments:
Letters of credit or bank guarantees
30
27
3
—
—
Total
$
5,652
$
1,443
$
826
$
939
$
2,444
(1)
Includes total future minimum rent expense under non
-
cancelable leases for both occupied and vacated facilities (rent
expense is shown net of sublease income).
(2) Purchase obligations are defined as contractual obligations for the purchase of goods or services, which are enforceable
and legally binding on us, and that specify all significant terms.