Western Digital 2000 Annual Report Download - page 56

WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
its options under SFAS 123, the Company's net loss and net loss per share would have been increased to the
amounts indicated below:
Year Ended
June 27, July 3, June 30,
1998 1999 2000
Pro forma net loss (in thousands) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(324,178) $(538,637) $(227,799)
Pro forma net loss per share:
Basic and dilutedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (3.70) $ (6.02) $ (1.86)
Pro forma net loss and net loss per share reÖects only options granted after 1995. Therefore, the full
impact of calculating compensation expense for options under SFAS 123 is not reÖected in the pro forma net
loss amounts presented above because compensation expense is reÖected over the options' vesting period and
compensation expense for options granted before 1996 is not considered. The pro forma net loss information
appearing above excludes the eÅects on pro forma compensation expense of options granted under the new
venture plans, as the amounts are not material.
Stock Purchase Rights
In 1989, the Company implemented a plan to protect shareholders' rights in the event of a proposed
takeover of the Company. Under the plan, each share of the Company's outstanding common stock carries
one Right to Purchase Series A Junior Participating Preferred Stock (the ""Right''). The Right enables the
holder, under certain circumstances, to purchase common stock of Western Digital or of the acquiring
company at a substantially discounted price ten days after a person or group publicly announces it has acquired
or has tendered an oÅer for 15% or more of the Company's outstanding common stock. On September 10,
1998 the Company's Board of Directors approved the adoption of a new Rights plan to replace the previous
plan, which expired in September of 1998. The Rights under the new plan are similar to the rights under the
1989 plan except they are redeemable by the Company at $.01 per Right and expire in 2008.
Note 7. Business Segment, International Operations and Major Customer
Segment Information
The Company adopted Statement of Financial Accounting Standards No. 131, ""Disclosures about
Segments of an Enterprise and Related Information'' (""SFAS 131'') in 1999. SFAS 131 establishes standards
for reporting Ñnancial and descriptive information about an enterprise's operating segments in its annual
Ñnancial statements and selected segment information in interim Ñnancial reports.
In 1998, the Company operated in one industry segment, the hard drive industry (hard drive solutions,
""HDS''), and in accordance with SFAS 131, has provided enterprise-wide disclosures. During 1999, the
Company acquired Connex, which is a separate operating segment as deÑned under SFAS 131. Connex is an
early-stage business which did not meet the separate disclosure requirements under SFAS 131 in 1999 and in
2000. The Company also has other new venture businesses which it began developing in 2000 and which did
not meet the separate disclosure requirements under SFAS 131. In accordance with SFAS 131, the Company
has combined the results of Connex and other new ventures in an ""all other'' category in order to report the
HDS segment results separately which is consistent with the segment information used by the chief operating
decision maker in 2000 to assess performance and evaluate how to allocate resources. General and corporate
expenses of the Company are included in the HDS segment.
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