SiliconBeat

Employees at NetApp got a for-your-eyes-only memo Tuesday afternoon after the close of market that the company asked them not to forward to anyone. We found it as an attachment to an SEC filing.

The memo told informed employees that NetApp was announcing its plans to raise more than $1 billion in cash through the offering of convertible notes, according to the filing. “I am sure many of you are asking why we would do that if we have more than $1B in cash on hand today,” says the memo, though who the “I” is is not clear.

“The answer is that most of our cash resides outside the U.S., while most of our cash needs are inside the U.S. If we transferred our non-U.S. cash into the U.S., we would incur a significant U.S. tax expense.”

Two years ago NetApp brought back $405.5 million from its overseas accounts when it took advantage of the dubiously titled American Jobs Creation Act of 2004, an act of Congress that temporarily allowed companies to bring in money from overseas and rather than pay a 35 percent tax on the proceeds, pay a reduced rate of just 5.25 percent.

And what will NetApp use the extra billion dollars for? It intends to spend $275 million of the money to fight dilution of its stock by repurchasing its shares “in negotiated transactions with institutional investors.” It will also spend some money hedging its bets against further dilution that might come should note holders choose to convert their debt into company shares. And what’s left over will be used for the ususal “general corporate purposes,” which could include acquisitions, capital expenditures and even more stock repurchases.