Western Digital 2006 Annual Report Download - page 65

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CONSOLIDATED STATEMENTS OF CASH FLOWS
Previously
Reported Adjustment As Adjusted
Fiscal Year Ended July 1, 2005
Cash flows from operating activities
Net income .............................................. $198.4 $(2.4) $196.0
Stock-based compensation .................................... 3.8 1.0 4.8
Changes in accrued expenses .................................. 98.8 1.4 100.2
Previously
Reported Adjustment As Adjusted
Fiscal Year Ended July 2, 2004
Cash flows from operating activities
Net income .............................................. $151.3 $(1.5) $149.8
Stock-based compensation .................................... — 1.3 1.3
Changes in accrued expenses .................................. (26.8) 0.2 (26.6)
Note 3. Supplemental Financial Statement Data
June 30,
2006
July 1,
2005
Years Ended
(in millions)
Inventories:
Finished goods ...................................................... $ 119.5 $ 78.7
Work in process ..................................................... 62.3 59.7
Raw materials and component parts ....................................... 23.3 14.5
$ 205.1 $ 152.9
Property and Equipment:
Land and buildings . . ................................................. $ 163.2 $ 77.5
Machinery and equipment .............................................. 906.3 708.0
Machinery and equipment recorded under capital leases ......................... 37.5 22.8
Furniture and fixtures ................................................. 8.4 7.6
Leasehold improvements ............................................... 27.5 29.2
1,142.9 845.1
Accumulated depreciation .............................................. (594.3) (450.1)
Net property and equipment .......................................... $ 548.6 $ 395.0
Accumulated depreciation on machinery and equipment recorded under capital leases was $10.4 million and
$4.0 million as of June 30, 2006 and July 1, 2005, respectively.
Note 4. Read-Rite Asset Acquisition
In June 2003, Read-Rite Corporation (“Read-Rite”), then one of the Company’s suppliers of magnetic recording
heads, commenced voluntary Chapter 7 bankruptcy proceedings. On July 31, 2003, Western Digital purchased
substantially all of the assets of Read-Rite, including its wafer fabrication equipment in Fremont, California and
manufacturing facility in Bang Pa-In, Thailand. The cost of the acquisition was $172.0 million and consisted of cash
consideration of $94.8 million, assumed debt obligations of the Thailand operations of approximately $60.2 million and
direct costs of the acquisition and other miscellaneous assumed obligations totaling $17.0 million. The Company
59
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)