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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table presents the unfunded amounts as recognized on the Company’s consolidated balance sheets
as of July 3, 2015 and June 27, 2014 (in millions):
2015 2014
Current liabilities .......................................................... $ 1 $ 1
Non-current liabilities ...................................................... 45 63
Net amount recognized ................................................... $46 $64
The accumulated benefit obligation for the Japanese defined benefit pension plans was $231 million at July 3,
2015. As of July 3, 2015, net actuarial gains for the Japanese defined benefit pension plans of $5 million are included
in accumulated other comprehensive income (loss) in the consolidated balance sheet. There were no prior service cred-
its for the defined benefit pension plans recognized in accumulated other comprehensive income (loss) in the con-
solidated balance sheet as of July 3, 2015. The amount expected to be amortized into net periodic benefit cost in fiscal
2016 is immaterial to the consolidated financial statements.
Assumptions
Weighted-Average Assumptions
The weighted-average actuarial assumptions used to determine benefit obligations for the Japanese defined bene-
fit pension plans were as follows for 2015, 2014 and 2013:
2015 2014 2013
Discount rate ....................................................... 1.3% 1.6% 1.6%
Rate of compensation increase .......................................... 0.9% 1.0% 0.9%
The weighted-average actuarial assumptions used to determine benefit costs for the Japanese defined benefit
pension plans were as follows for 2015, 2014 and 2013:
2015 2014 2013
Discount rate ....................................................... 1.6% 1.6% 1.8%
Expected long-term rate of return on plan assets ............................ 3.5% 3.5% 3.5%
Rate of compensation increase .......................................... 1.0% 0.9% 1.2%
The Company develops a discount rate by calculating when the estimated benefit payments will be due. Manage-
ment in Japan then matches the benefit payments to AA or higher bond ratings that match the timing of the expected
benefit payments to determine the appropriate discount rate.
The Company develops the expected long-term rate of return on plan assets by analyzing rates of return in Japan as
well as the investment portfolio applicable to the plan. Management’s estimates of future rates of return on assets is based
in large part on the projected rate of return from the respective investment managers using a long-term view of historical
returns, as well as actuarial recommendations using the most current generational and mortality tables and rates.
The Company develops the rate of compensation increase assumptions using local compensation practices and
historical rates of increases.
Plan Assets
Investment Policies and Strategies
The investment policy in Japan is to generate a stable return on investments over a long-term horizon in order to
have adequate pension funds to meet the Company’s future obligations. In order to achieve this investment goal, a
diversified portfolio with target asset allocation and expected rate of return is established by considering factors such
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