Western Digital 2009 Annual Report Download - page 49

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payment modifications through negotiations with or by granting to or receiving from our vendors payment term
accommodations.
Investing Activities
Net cash used in investing activities for 2009 was $551 million as compared to $1.3 billion for 2008 and
$383 million for 2007. During 2009, cash used in investing activities primarily consisted of $519 million for capital
expenditures and $63 million for the acquisition of SiliconSystems, net of cash acquired. During 2008, cash used in
investing activities consisted of $927 million for the acquisition of Komag, net of cash acquired, and $615 million for
capital expenditures, partially offset by net cash provided by investments of $221 million. The decrease in capital
expenditures in 2009 compared to 2008 was primarily the result of the expected reduction in market demand due to the
macroeconomic conditions. Capital expenditures in 2009 primarily consisted of the expansion of our head wafer
fabrication facilities, continued investment in advanced head technologies and increased capacity for our broadening and
growing product portfolio.
For 2010, we expect capital expenditures to be approximately $600 million and depreciation and amortization to be
approximately $530 million.
Our cash equivalents are invested primarily in readily accessible, AAA rated institutional money market funds
which are invested in U.S. Treasury securities, U.S. Treasury bills and U.S. Government agency securities. We also have
auction-rate securities that are classified as long-term investments as they are expected to be held until secondary markets
become available. These investments are currently accounted for as available-for-sale securities and recorded at fair value
within other non-current assets in the consolidated balance sheet. The estimated market values of these investments are
subject to fluctuation. The carrying value of our investments in auction-rate securities was reduced from $28 million as of
June 27, 2008 to $18 million as of July 3, 2009, as a result of the recognition of $10 million in other-than-temporary
losses that were recorded through earnings.
Financing Activities
Net cash used by financing activities for 2009 was $64 million as compared to net cash provided by financing
activities for 2008 of $326 million. Net cash used in financing activities was $86 million for 2007. The net cash provided
by financing activities in 2009 consisted of $28 million provided by the issuance of stock under employee plans, offset by
$36 million used to repurchase our common stock, a $24 million decrease in excess tax benefits from employee stock
plans, $5 million in tax withholding obligations paid in connection with the vesting of stock awards under employee
stock plans, and $27 million used to repay long-term debt. The net cash provided by financing activities in 2008
consisted of $500 million in net proceeds from debt, $89 million provided by an increase in excess tax benefits from
employee stock plans, $65 million provided by the issuance of stock under employee stock plans, offset by a $250 million
repayment of convertible debentures assumed in the acquisition of Komag, $60 million used to repurchase our common
stock, $13 million used to repay other long-term debt and $5 million in tax withholding obligations paid in connection
with the vesting of stock awards under employee stock plans. The net cash used in financing activities in 2007 consisted
of $73 million used for repurchases of our common stock, $43 million used for repayments of long-term debt, $9 million
in tax withholding obligations paid in connection with the vesting of stock awards under employee stock plans, offset by
$39 million provided by the issuance of stock under employee plans.
Off-Balance Sheet Arrangements
Other than facility and equipment lease commitments incurred in the normal course of business and certain
indemnification provisions (see “Contractual Obligations and Commitments” below), we do not have any off-balance
sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or
any obligation arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned
subsidiaries that are not included in the consolidated financial statements. Additionally, we do not have an interest in, or
relationships with, any special-purpose entities.
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