Western Digital 2006 Annual Report Download - page 33

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adequate internal control procedures in place for future periods; however, if our internal controls are found to be
ineffective, our financial results or our stock price may be adversely affected.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
Our corporate headquarters are located in Lake Forest, California. The Lake Forest facilities consist of approximately
257,000 square feet of leased space and house our management, research and development, administrative and sales
personnel. In addition, in Fremont, California, we own facilities consisting of approximately 189,000 square feet, and we
lease facilities consisting of approximately 97,000 square feet, that we use for head wafer fabrication, research and
development and warehousing. We also lease approximately 213,000 square feet in San Jose, California, primarily for
research and development activities. In addition, we lease one facility in Irvine, California, which consists of approx-
imately 60,000 square feet that we use as a hard drive return and refurbishing center. We also lease office space in various
other locations throughout the world primarily for sales and technical support.
We own a manufacturing facility in Kuala Lumpur, Malaysia of approximately 484,000 square feet, which is used
for assembly of hard drives, printed circuit boards and HSAs. We also own a manufacturing facility in Navanakorn,
Thailand, consisting of approximately 226,000 square feet, which is used for assembly of hard drives. In addition, we own
a facility in Bang Pa-In, Thailand, consisting of four buildings with approximately 902,000 square feet, which is used for
slider fabrication, the assembly of hard drives, HGAs and HSAs, and research and development.
We believe our present facilities are adequate for our current needs, although the process of upgrading our facilities
to meet technological and market requirements is expected to continue. New manufacturing facilities, in general, can be
developed and become operational within approximately nine to eighteen months should we require such additional
facilities.
Item 3. Legal Proceedings
In the normal course of business, we are subject to legal proceedings, lawsuits and other claims. We believe that any
monetary liability or financial impact to us from these matters or the specified matters below, individually and in the
aggregate, beyond what we have provided for at June 30, 2006, would not be material to our financial condition.
However, the ultimate amount of monetary liability or financial impact with respect to these matters is very uncertain
and difficult to predict, and could therefore differ materially from our expectations.
The following purported shareholder derivative actions have been filed challenging conduct by certain of our
current and former board members and officers in connection with various stock option grants:
•Dreyfuss v. Massengill, et al., Case No. SACV 06-729 AG (RNGx), United States District Court for the Central
District of California, filed August 9, 2006 and Kastella and Sakamoto v. Mercer, et al., Case No. SACV 06-868 CJC
(MLGx), United States District Court for the Central District of California, filed September 14, 2006. The
plaintiffs in the Dreyfuss and Kastella and Sakamoto actions jointly filed an amended complaint on September 29,
2006 asserting claims for violations of Sections 14(a) and 20(a) of the Securities Exchange Act, accounting, breach
of fiduciary duty and/or aiding and abetting, constructive fraud, waste of corporate assets, unjust enrichment,
rescission, breach of contract, and violation of the California Corporations Code in connection with our option
granting practices. We have been advised by plaintiffs’ counsel that the parties intend to consolidate the Dreyfuss
action with the Kastella and Sakamoto action.
•Mason v. Massengill, et al, Case No. CV06-6845 PA (RZx), United States District Court for the Central District of
California, filed October 27, 2006. The complaint asserts claims for violations of Section 14(a) of the Securities
Exchange Act, accounting, breach of fiduciary duty and/or aiding and abetting, abuse of control, gross
mismanagement, constructive fraud, waste of corporate assets, unjust enrichment, rescission, and violation of
the California Corporations Code in connection with our option granting practices.
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