Seagate 2012 Annual Report Download - page 81
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Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Property, Equipment and Leasehold Improvements, net
Depreciation expense, which includes amortization of leasehold improvements, was $727 million, $739 million and $748 million for fiscal
years 2013, 2012, and 2011, respectively. Interest on borrowings related to eligible capital expenditures is capitalized as part of the cost of the
qualified assets and amortized over the estimated useful lives of the assets. During fiscal years 2013, 2012, and 2011, the Company capitalized
interest of $10 million, $4 million and $5 million, respectively.
3. Acquisitions
LaCie S.A.
On August 3, 2012 the Company acquired 23,382,904 (or approximately 64.5%) of the outstanding shares of LaCie S.A. ("LaCie") for a
price of €4.05 per share with a price supplement of €
0.12 per share, which would have been payable if the Company had successfully acquired at
least 95% of the outstanding shares of LaCie within 6 months of the acquisition. Of the amount paid at the acquisition date, €9 million is treated
as compensation cost to one of the selling shareholders, who is now an employee of the Company, to be recognized over a period of 36 months
from the acquisition date, and may be refunded to the Company if the selling shareholder is no longer employed at the end of that period. The
transaction and related agreements are expected to accelerate the Company's growth strategy in the expanding consumer storage market,
particularly in Europe, Japan and in premium distribution channels.
The acquisition-date fair value of the consideration transferred for the business combination totaled $111 million, including cash paid of
$107 million, and contingent consideration of $4 million.
74
(Dollars in millions)
Useful Life
in Years
June 28,
2013
June 29,
2012
Land and land improvements
$
44
$
29
Equipment
3
–
5
6,838
6,495
Buildings and leasehold improvements
Up to 48
1,401
1,233
Construction in progress
261
263
8,544
8,020
Less accumulated depreciation and
amortization
(6,275
)
(5,736
)
$
2,269
$
2,284