Western Digital 2015 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2015 Western Digital annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

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”), solid-state drives (“SSDs”), direct attached storage solutions, personal cloud network attached storage sol-
utions, and public and private cloud data center storage solutions. HDDs are the Company’s principal products and
are today’s primary storage medium for the vast majority of digital content, with the use of solid-state storage prod-
ucts growing rapidly. The Company’s products are marketed under the HGST, WD and G-Technology brand names.
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 53 or 52-week fiscal year. The 2015 fiscal year ended on July 3, 2015 and consisted of 53
weeks. The 2014 and 2013 fiscal years ended on June 27, 2014 and June 28, 2013, respectively, and both consisted of
52 weeks.
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 2015, 2014,
and 2013, the accounts for all foreign subsidiaries have been remeasured using the U.S. dollar as the functional cur-
rency. Gains or losses resulting from remeasurement of these accounts from local currencies into U.S. dollars were
immaterial to the consolidated financial statements.
The Company acquired Amplidata NV (“Amplidata”) on March 9, 2015, Virident Systems, Inc. (“Virident”) on
October 17, 2013, and sTec, Inc. (“sTec”) on September 12, 2013. In connection with the acquisitions, Amplidata, Vir-
ident, and sTec became indirect wholly-owned subsidiaries of the Company. The results of operations of Amplidata,
Virident, and sTec 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. Gains and
losses on available-for-sale securities are recorded based on the specific identification method. The Company evaluates
the available-for sale securities in an unrealized loss position for other-than-temporary impairment. The amortized
cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization and accretion are included in total other expense, net in the consolidated statements of income. In
addition, realized gains and losses are included in total other expense, net in the consolidated statements of income.
59