Seagate 2014 Annual Report Download - page 92
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SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
ThefollowingtablesummarizestheactivityrelatedtotheCompany'sgrossunrecognizedtaxbenefits:
ItistheCompany'spolicytoincludeinterestandpenaltiesrelatedtounrecognizedtaxbenefitsintheprovisionforincometaxesontheConsolidated
StatementsofOperations.Duringfiscalyear2015,theCompanyrecognizednetincometaxexpenseforinterestandpenaltiesof$26million,$8millionduring
fiscalyear2014and$2millionduringfiscalyear2013.AsofJuly3,2015,theCompanyhad$20millionofaccruedinterestandpenaltiesrelatedtounrecognized
taxbenefitscomparedto$27millioninfiscalyear2014.
Duringthe12monthsbeginningJuly4,2015,theCompanyexpectsthatitsunrecognizedtaxbenefitscouldbereducedbyapproximately$11millionasa
resultoftheexpirationofcertainstatutesoflimitation.
TheCompanyissubjecttotaxationinmanyjurisdictionsgloballyandisrequiredtofileU.S.federal,U.S.stateandnon-U.S.incometaxreturns.InJune
2014,theCompanyreceivedtheRevenueAgent'sReportandNoticesofProposedAdjustmentsforitsU.S.federalincometaxreturnsforfiscalyears2008,2009
and2010.TheCompanyiscurrentlycontestingcertainoftheseproposedadjustmentsthroughtheIRSAppealsOffice.TheCompanybelievesthattheresolutionof
thesedisputedissueswillnothaveamaterialimpactonitsfinancialstatements.OnDecember31,2014,theCompanyreceivedthefinalauditassessmentfromthe
JiangsuProvinceStateTaxBureauofthePeople'sRepublicofChina.TheCompanyrecognized$193millionofincometaxexpenseandmadepaymentsof
$225millionrelatedtotaxandinterestassociatedwithchangestotheCompany'staxfilingsinChinafromcalendaryears2007through2013.
TheCompanyisnolongersubjecttotaxexaminationofU.S.federalincometaxreturnsforyearspriortofiscalyear2008.WithrespecttoU.S.stateandnon-
U.S.incometaxreturns,theCompanyisgenerallynolongersubjecttotaxexaminationforyearsendingpriortofiscalyear2005.
8.DerivativeFinancialInstruments
TheCompanyisexposedtoforeigncurrencyexchangerate,interestrate,andtoalesserextent,equitypricerisksrelatingtoitsongoingbusinessoperations.
TheCompanyentersintoforeigncurrencyforwardexchangecontractsinordertomanagetheforeigncurrencyexchangerateriskonforecastedexpenses
denominatedinforeigncurrenciesandtomitigatetheremeasurementriskofcertainforeigncurrencydenominatedliabilities.TheCompany'saccountingpolicies
fortheseinstrumentsarebasedonwhetherthe
89
FiscalYearsEnded
(Dollarsinmillions)
July3,
2015
June27,
2014
June28,
2013
Balanceofunrecognizedtaxbenefitsatthebeginningoftheyear $ 115 $ 157 $ 135
Grossincreasefortaxpositionsofprioryears 12 10 14
Grossdecreasefortaxpositionsofprioryears (4) (64) (4)
Grossincreasefortaxpositionsofcurrentyear 9 13 16
Grossdecreasefortaxpositionsofcurrentyear — — —
Settlements (45) — —
Lapseofstatutesoflimitation (3) (3) (5)
Non-U.S.exchange(gain)/loss (1) 2 1
Balanceofunrecognizedtaxbenefitsattheendoftheyear $ 83 $ 115 $ 157