Seagate 2013 Annual Report Download - page 118

Table of Contents
SEAGATE TECHNOLOGY PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
wholly owned subsidiary of the Company, as described more fully in the Current Report on Form 8-
K filed by the Company on July 6, 2010 (the
"Redomestication"). On July 27, 2010, in connection with the Redomestication, the Company, as sole shareholder of Seagate-
Cayman, approved
a form of deed of indemnity (the "Deed of Indemnity"), which provides for the indemnification by Seagate-Cayman of any director, officer,
employee or agent of the Company, Seagate-Cayman or any subsidiary of the Company (each, a "Deed Indemnitee"), in addition to any of a
Deed Indemnitee's indemnification rights under the Company's Articles of Association, applicable law or otherwise, with a similar scope to the
Revised Indemnification Agreement. Seagate-Cayman entered into the Deed of Indemnity with certain Deed Indemnitees effective as of July 3,
2010 and continues to enter into the Deed of Indemnity with additional Deed Indemnitees from time to time.
The nature of these indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential
amount it could be required to pay on behalf of its officers and directors. Historically, the Company has not made any significant indemnification
payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these
indemnification obligations.
Intellectual Property Indemnification Obligations
The Company has entered into agreements with customers and suppliers that include limited intellectual property indemnification
obligations that are customary in the industry. These guarantees generally require the Company to compensate the other party for certain
damages and costs incurred as a result of third party intellectual property claims arising from these transactions. The nature of the intellectual
property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be
required to pay to its customers and suppliers. Historically, the Company has not made any significant indemnification payments under such
agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification
obligations.
Product Warranty
The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally warrants its products
for a period of 1 to 5 years. The Company uses estimated repair or replacement costs and uses statistical modeling to estimate product return
rates in order to determine its warranty obligation. Changes in the Company's product warranty liability during the fiscal years ended June 27,
2014, June 28, 2013 and June 29, 2012 were as follows:
111
Fiscal Years Ended
(In millions)
June 27,
2014
June 28,
2013
June 29,
2012
Balance, beginning of period
$
320
$
363
$
348
Warranties issued
177
193
169
Repairs and replacements
(228
)
(276
)
(284
)
Changes in liability for pre-existing warranties,
including expirations
1
37
58
Warranty liability assumed from acquisitions
3
3
72
Balance, end of period
$
273
$
320
$
363
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1