Seagate to Pay $230 Million to People’s Republic of China

On December 31st, 2014, two Seagate Technology plc‘s affiliates in charge of manufaxcturing HDDs, Seagate Technology International (Wuxi) Co., Ltd. and Seagate Technology (Suzhou) Co., Ltd. received a final audit assessment from the Jiangsu Province State Tax Bureau of the People’s Republic of China, according to a SEC Form 8-K filing.

The assessment is related to tax and interest associated with changes to the company’s tax filings for calendar years 2007 through 2013.

The company will record approximately $200 million in additional tax expense associated with the assessment in its 2nd quarter, fiscal year 2015.

The cash payment of approximately $230 million for the assessment will occur in its 3rd quarter, fiscal 2015.

Resolving the audit in connection with obtaining agreement from the China tax authorities on predictable, future tax expense provides stability to the company’s business model. Additional, future tax expense required by the agreement is not expected to have a material impact on the company’s financial statements.