Western Digital 2011 Annual Report Download - page 49

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As of July 1, 2011, we had outstanding the following purchased foreign exchange contracts (in millions, except
weighted average contract rate):
Contract
Amount
Weighted Average
Contract Rate*
Unrealized
Gain (Loss)
Foreign exchange contracts:
Thai Baht cash flow hedges ................ $1,013 30.70 $ (9)
Thai Baht fair value hedges ................ $ 103 30.70 —
Malaysian Ringgit cash flow hedges .......... $ 331 3.09 4
Euro fair value hedges .................... $ 10 0.69 —
British Pound Sterling fair value hedges ....... $ 4 0.62 —
* Expressed in units of foreign currency per U.S. dollar.
In 2011, 2010 and 2009, total net realized transaction and foreign exchange contract currency gains and losses were
not material to our consolidated financial statements.
Disclosure About Other Market Risks
Variable Interest Rate Risk
Borrowings under the term loan facility bear interest at a rate equal to, at the option of WDTI, either (a) a LIBOR
rate determined by reference to the cost of funds for Eurodollar deposits for the interest period relevant to such borrowing,
adjusted for certain additional costs (the “Eurocurrency Rate”) or (b) a base rate determined by reference to the higher of
(i) the federal funds rate plus 0.50% and (ii) the prime rate as announced by JPMorgan Chase Bank, N.A. (the “Base
Rate”); in each case plus an applicable margin. The applicable margin for borrowings under the term loan facility ranges
from 1.25% to 1.50% with respect to borrowings at the Eurocurrency Rate and 0.0% to 0.125% with respect to
borrowings at the Base Rate. The applicable margins for borrowings under the term loan facility are determined based
upon a leverage ratio of the Company and its subsidiaries calculated on a consolidated basis. If the federal funds rate,
prime rate or LIBOR rate increase, our interest payments could also increase. A one percent increase in the variable rate of
interest on the term loan facility would increase interest expense by approximately $3 million annually.
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