Western Digital 1998 Annual Report Download - page 32

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27
twelve months. The unrealized gains and losses on these contracts are deferred and recognized in the results of
operations in the period in which the hedged transaction is consummated. The Company does not purchase short-term
forward exchange contracts for trading purposes.
As of June 27, 1998, the Company had outstanding the following purchased foreign currency forward contracts (in
millions, except average contract rate):
June 27, 1998
Contract
Amount Weighted Average
Contract Rate Unrealized
Loss*
(U.S. Dollar equivalent amounts)
Foreign currency forward contracts:
Singapore Dollar ............................................................. $178.9 1.60 $ 8.8
Malaysian Ringgit............................................................ 61.4 3.66 8.3
British Pound Sterling...................................................... 1.6 1.63 —
$ 241.9 $ 17.1
____________
* The unrealized losses on these contracts are deferred and recognized in the results of operations in the period in
which the hedged transactions are consummated, at which time the loss is offset by the reduced U.S. Dollar value of
the local currency operating expense.
Disclosure About Other Market Risks
At June 27, 1998, the market value of the Company's 5.25% zero coupon convertible subordinated debentures due
in 2018 was approximately $335 million, compared to the related carrying value of $469.2 million. The convertible
debentures will be repurchased by the Company, at the option of the holder, as of February 18, 2003, February 18,
2008, or February 18, 2013, or if there is a Fundamental Change (as defined in the Debenture documents), at the issue
price plus accrued original issue discount to the date of redemption.