Seagate 2013 Annual Report Download - page 56

Table of Contents
and a decrease in interest expense of $27 million due to a reduction in our average interest rate and total debt levels.
Income Taxes
We recorded an income tax benefit of $7 million for fiscal year 2013 compared to an income tax provision of $20 million for fiscal year
2012. Our fiscal year 2013 benefit for income taxes included $52 million of income tax benefit from the reversal of a portion of the U.S.
valuation allowance recorded in prior periods. Our fiscal year 2012 provision for income taxes included $35 million of income tax benefit from
the reversal of a portion of the U.S. valuation allowance recorded in prior periods.
Our income tax benefit recorded for fiscal year 2013 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,
and (ii) a decrease in valuation allowance for certain U.S. deferred tax assets. The acquisition of a majority interest in the outstanding shares of
LaCie did not have a material impact on our effective tax rate in fiscal year 2013. Our income tax provision recorded for fiscal year 2012
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, and (ii) a decrease in valuation allowance for certain U.S.
deferred tax assets. The acquisition of Samsung's HDD business did not have a significant impact on our effective tax rate in fiscal year 2012.
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 investments with remaining maturities of 90 days or less at the time of purchase. Our
short-term investments consist primarily of readily marketable 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 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 have restrictive regulations over the
movement of cash and/or foreign exchange across their borders. However, these restrictions have not impeded our ability to conduct our
business, 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 27, 2014.
52
Fiscal Years Ended
(Dollars in millions)
June 28,
2013
June 29,
2012
Change
%
Change
(Benefit from) provision for income
taxes
$
(7
)
$
20
$
(27
)
(135
)%