Seagate 2011 Annual Report Download - page 73

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
Organization
The Company is a leading provider of data storage products. Its principal products are hard disk drives, commonly referred to as disk
drives, hard drives or HDDs. Hard disk drives are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. Disk
drives are used as the primary medium for storing electronic data.
The Company produces a broad range of electronic data storage products addressing enterprise applications, where its products are designed
for enterprise servers, mainframes and workstations; client compute applications, where its products are designed for desktop and notebook
computers; and client non-compute applications, where its products are designed for a wide variety of end user devices such as digital video
recorders (DVRs), gaming consoles, personal data backup systems, portable external storage systems and digital media systems. The Company
sells its products primarily to major original equipment manufacturers (OEMs), distributors and retailers. In addition to manufacturing and
selling disk drives, the Company provides storage services for small- to medium-sized businesses, including online backup, data protection and
recovery solutions.
Basis of Presentation and Consolidation
The consolidated financial statements include the accounts of the Company and all its wholly-owned subsidiaries, after elimination of
intercompany transactions and balances. The preparation of financial statements in accordance with accounting principles generally accepted in
the United States also requires management to make estimates and assumptions that affect the amounts reported in the Company's consolidated
financial statements and accompanying notes. Actual results could differ materially from those estimates. The methods, estimates and judgments
the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its
consolidated financial statements. The consolidated financial statements reflect, in the opinion of management, all material adjustments
necessary to present fairly the consolidated financial position, results of operations, cash flows and shareholders' equity for the periods presented.
The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. Accordingly,
fiscal years 2012, 2011 and 2010 were comprised of 52 weeks and ended on June 29, 2012, July 1, 2011 and July 2, 2010, respectively. All
references to years in the Notes to Consolidated Financial Statements represent fiscal years unless otherwise noted.
Summary of Significant Accounting Policies
Cash, Cash Equivalents and Short-Term Investments. The Company considers all highly liquid investments with a remaining maturity of
90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The
Company's short-term investments are primarily comprised of readily marketable debt securities with remaining maturities of more than 90 days
at the time of purchase. With the exception of restricted cash and investments, held for its non-qualified deferred compensation plan, which are
classified as trading securities, the Company has classified its entire investment portfolio as available-for-sale and it is stated at fair value with
unrealized gains and losses included in Accumulated other comprehensive income (loss), which is a component of Shareholders' Equity. The
amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and
accretion are included in interest income. Realized gains and losses are included in Other, net. The cost of securities sold is based on the specific
identification method.
67