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The impact on the consolidated financial statements during the years ended July 2, 2010 and July 3, 2009 were as
follows (in millions):
Derivatives in Cash
Flow Hedging Relationships 2010 2009 2010 2009
Location of Gain (Loss)
Reclassified from
Accumulated
OCI into Income
Amount of Gain (Loss)
Recognized in
Accumulated OCI
on Derivatives
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income
Foreign exchange contracts . . . $64 $(33) Cost of revenue $55 $(47)
The total net realized transaction and forward exchange contract currency gains and losses were not material to the
consolidated financial statements during the years ended July 2, 2010 and July 3, 2009. See Notes 1 and 10 for additional
disclosures related to the Company’s foreign exchange contracts.
Note 12. Other Intangible Assets
Other intangible assets consist primarily of technology acquired in business combinations and are amortized on a
straight-line basis over the respective estimated useful lives of the assets. In 2010, the Company acquired $11 million of
intangibles as a result of the Hoya acquisition, primarily related to a glass substrate supply agreement and existing
technology. Intangible assets as of July 2, 2010 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 $127 $45 $82
Supply agreement ............... 2 6 — 6
Total ........................ $133 $45 $88
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. 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
Amortization expense for intangible assets was $12 million, $11 million and $16 million for 2010, 2009 and 2008,
respectively. As of July 2, 2010, estimated future amortization expense for intangible assets is approximately $17 million
for 2011, $16 million for 2012, $13 million for 2013, $12 million for 2014, and $12 million for 2015.
Note 13. Restructuring and Sale of Facility
During 2009, the Company announced and completed a restructuring plan to realign its cost structure as a result of
a softer demand environment. This resulted in the closure of one of the Company’s hard drive manufacturing facilities in
Thailand, the disposal of its substrate manufacturing facility in Sarawak, Malaysia, and headcount reductions throughout
the world of approximately 3,300 people. Restructuring costs totaled $112 million and consisted of $81 million of asset
impairment charges, $27 million of employee termination benefits and $4 million of contract termination and other exit
costs. Total cash expenditures related to the restructuring activities were approximately $31 million. The asset
impairment charge of $81 million consisted of $76 million primarily related to the land, buildings, machinery and
equipment at the manufacturing facilities in Thailand and Malaysia and $5 million related to a customer relationship
intangible asset acquired from Komag. The impairment charge is based on the excess of the carrying values over the
76
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)