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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Summary of Significant Accounting Policies
Western Digital Corporation (the “Company” or “Western Digital”) is a leading developer, manufacturer and
provider of data storage solutions that enable consumers, businesses, governments and other organizations to create,
manage, experience and preserve digital content. The Company’s product portfolio includes hard disk drives
(“HDDs”) and solid-state drives (“SSDs”). HDDs are the Company’s principal products and are today’s primary stor-
age medium for digital content, with the use of solid-state storage products growing rapidly. The Company’s products
are marketed under the HGST, WD and G-Technology brand names. The Company currently operate our global
business through two independent subsidiaries due to regulatory requirements — HGST and WD.
The Company has prepared its consolidated financial statements in accordance with accounting principles gen-
erally accepted in the United States (“U.S. GAAP”) and has adopted accounting policies and practices which are gen-
erally accepted in the industry in which it operates. The Company’s significant accounting policies are summarized
below.
Fiscal Year
The Company has a 52 or 53-week fiscal year. The 2014, 2013 and 2012 fiscal years which ended on June 27,
2014, June 28, 2013 and June 29, 2012, respectively, consisted of 52 weeks each.
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated in consolidation. In fiscal 2014 and fiscal
2013, the accounts for all foreign subsidiaries have been remeasured using the U.S. dollar as the functional currency.
In fiscal 2012, the accounts for all foreign subsidiaries, except for one Japanese subsidiary in which Yen was the func-
tional currency, have been remeasured using the U.S. dollar as the functional currency. Gains or losses resulting from
remeasurement or translation of these accounts from local currencies into U.S. dollars were immaterial to the con-
solidated financial statements.
The Company acquired Virident Systems, Inc. (“Virident”) on October 17, 2013, sTec, Inc. (“sTec”) on Sep-
tember 12, 2013, and VeloBit, Inc. (“VeloBit”) on July 9, 2013. In addition, on March 8, 2012, the Company com-
pleted its acquisition of all of the issued and paid-up share capital of Viviti Technologies Ltd., known until shortly
before acquisition as Hitachi Global Storage Technologies Holdings Pte. Ltd. (“HGST”), from Hitachi, Ltd.
(“Hitachi”). These acquisitions are further described in Note 15 below. In connection with the acquisitions, Virident,
sTec, VeloBit and HGST became indirect wholly-owned subsidiaries of the Company. The results of operations of
Virident, sTec, VeloBit and HGST since the respective dates of acquisition are included in the consolidated financial
statements.
Cash and Cash Equivalents
The Company’s cash equivalents represent highly liquid investments in money market funds, which are invested
in U.S. Treasury securities and U.S. Government agency securities as well as direct investments in bank acceptances
with original maturities when purchased of three months or less. Cash equivalents are carried at cost, which approx-
imates fair value.
Investments
The Company’s investments in U.S. Treasury securities, U.S. Government agency securities, commercial paper
and certificates of deposit with original maturities at purchase of more than three months. These investments are
classified as available-for-sale securities and included within short-term investments and other non-current assets in
the consolidated balance sheets. Available-for-sale securities are stated at fair value with unrealized gains and losses
included in accumulated other comprehensive income (loss), which is a component of shareholders’ equity. The
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