Western Digital 2001 Annual Report Download - page 40

Download and view the complete annual report

Please find page 40 of the 2001 Western Digital annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

The Senior Credit Facility requires WDT to maintain certain amounts of tangible net worth, prohibits the
payment of cash dividends on common stock and contains a number of other covenants. As of the date hereof,
there were no borrowings under the Senior Credit Facility.
Fair Value Risk
The Company owns approximately 1.2 million shares of Vixel common stock. As of June 29, 2001, the
market value of the Vixel shares was $3.1 million. The Company determines, on a quarterly basis, the fair
market value of the Vixel shares and records an unrealized gain or loss resulting from the diÃ…erence in the fair
market value of the shares as of the previous quarter end and the fair market value of the shares on the
measurement date. As of June 29, 2001, a $3.1 million total accumulated unrealized gain has been recorded in
accumulated other comprehensive income (loss). If the Company sells all or a portion of this common stock,
any unrealized gain or loss on the date of sale will be recorded as a realized gain or loss in the Company's
results of operations. As a result of market conditions, the market value of the shares had declined from
$3.1 million as of June 29, 2001 to $2.4 million as of August 17, 2001. Due to market Öuctuations, an
additional decline in the stock's fair market value could occur.
30