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July 3, 2009. The fair value, balance sheet location and the impact on the consolidated financial statements during the
year ended July 3, 2009 were as follows (in millions):
Derivatives Designated as Hedging
Instruments under SFAS 133 Balance Sheet Location Fair Value Balance Sheet Location Fair Value
July 3, 2009 July 3, 2009
Asset Derivatives Liability Derivatives
Foreign exchange contracts .......... Other current assets $5 Other current liabilities —
Derivatives in SFAS 133 Cash
Flow Hedging Relationships 2009 2009
Amount of Gain (Loss)
Recognized in
Accumulated OCI
on Derivatives
Location of Gain (Loss)
Reclassified from
Accumulated
OCI into Income
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income
Foreign exchange contracts .............. $(33) Cost of revenue $(47)
The total net realized transaction and forward exchange contract currency gains and losses were not material to the
consolidated financial statements during the year ended July 3, 2009.
Note 12. Other Intangible Assets
Other intangible assets consist primarily of technology acquired in business combinations and amortized on a
straight-line basis over the respective estimated useful lives of the assets. In 2009, the Company acquired $24 million of
intangibles as a result of the SiliconSystems acquisition and recorded a $5 million impairment charge related to a
customer relationship intangible asset acquired from Komag. The net carrying value of intangible assets as of July 3,
2009 was $89 million. Accumulated amortization of intangibles was $35 million as of July 3, 2009. Intangible assets as
of July 3, 2009 were as follows:
Weighted Average
Amortization Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(in years) (in millions) (in millions) (in millions)
Existing technology ............. 9 $124 $35 $89
In 2008, the Company acquired $89 million of intangibles as a result of the Komag acquisition. The net carrying
value of intangible assets as of June 27, 2008 was $81 million. Accumulated amortization of intangibles was $29 million
as of June 27, 2008. Intangible assets as of June 27, 2008 were as follows:
Weighted Average
Amortization Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(in years) (in millions) (in millions) (in millions)
Existing technology ............. 9 $100 $26 $74
Customer relationships ........... 3 10 3 7
Total ........................ $110 $29 $81
Amortization expense for intangible assets was $11 million, $16 million and $3 million for 2009, 2008 and 2007,
respectively. As of July 3, 2009, estimated future amortization expense for intangible assets is approximately $15 million
per year for 2010 and 2011 and $13 million per year for 2012, 2013 and 2014.
Note 13. Restructuring and Sale of Facility
During December 2008, the Company’s second fiscal quarter, the Company announced a restructuring plan to
realign its cost structure as a result of a softer demand environment. This plan was completed during the Company’s third
and fourth fiscal quarters of 2009. This resulted in the closure of one of the Company’s hard drive manufacturing facilities
in Thailand, the disposal of its media substrate manufacturing facility in Sarawak, Malaysia, and headcount reductions
throughout the world of approximately 3,300 people. During the fourth fiscal quarter, the Company sold its media
substrate manufacturing facility, and related assets, in Sarawak, Malaysia for net proceeds of approximately $29 million,
77
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)