Western Digital 2011 Annual Report Download - page 63

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Note 2. Supplemental Financial Statement Data
July 1,
2011
July 2,
2010
Years Ended
(In millions)
Inventories:
Raw materials and component parts ........................................ $ 172 $ 159
Work-in-process ...................................................... 263 255
Finished goods ....................................................... 142 146
Total inventories .................................................... $ 577 $ 560
Property, Plant and Equipment:
Land and buildings ................................................... $ 750 $ 675
Machinery and equipment ............................................... 3,963 3,470
Furniture and fixtures .................................................. 9 9
Leasehold improvements ................................................ 115 69
Total property, plant and equipment ....................................... 4,837 4,223
Accumulated depreciation and amortization .................................. (2,613) (2,064)
Property, plant and equipment, net ...................................... $2,224 $ 2,159
Note 3. Debt
Long-term debt consisted of the following as of July 1, 2011 and July 2, 2010 (in millions):
2011 2010
Term loan.................................. $294 $400
Less amounts due in one year .................... (144) (106)
Long-term debt ............................ $150 $294
In February 2008, Western Digital Technologies, Inc. (“WDTI”), a wholly-owned subsidiary of the Company,
entered into a five-year Credit Agreement that provided for a $500 million term loan facility. As of July 1, 2011, the term
loan facility had a variable interest rate of 1.44% and a remaining balance of $294 million, which requires principal
payments totaling $144 million in 2012 and $150 million in 2013. The term loan facility has a maturity date of
February 11, 2013. The term loan facility requires WDTI to comply with a leverage ratio and an interest coverage ratio
calculated on a consolidated basis for the Company and its subsidiaries. In addition, the term loan facility contains
customary covenants, including covenants that limit or restrict WDTI’s and its subsidiaries’ ability to incur liens, incur
indebtedness, make certain restricted payments, merge or consolidate and enter into certain speculative hedging
arrangements. As of July 1, 2011, WDTI was in compliance with all covenants.
See Note 14 for additional disclosures related to the Company’s new credit facility to be entered into in connection
with the closing of the planned acquisition of Viviti Technologies Ltd., until recently known as Hitachi Global Storage
Technologies Pte. Ltd (“HGST”).
Note 4. Commitments and Contingencies
Lease Commitments
The Company leases certain facilities and equipment under long-term, non-cancelable operating leases. The
Company’s operating leases consist of leased property and expire at various dates through 2020. Rental expense under
57
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)