This excerpt taken from the WDC 10-K filed Aug 20, 2008.
Note 4. Commitments and Contingencies
The Company leases certain facilities and equipment under long-term, non-cancelable operating and capital leases. The Companys operating leases consist of leased property and equipment that expire at various dates through 2015.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Rental expense under these operating leases, including month-to-month rentals, was $18 million, $15 million and $16 million in 2008, 2007 and 2006, respectively. The Companys capital leases consist of leased equipment. These leases have maturity dates through July 2009 and interest rates averaging approximately 6.3%. Future minimum lease payments under operating and capital leases that have initial or remaining non-cancelable lease terms in excess of one year at June 27, 2008 are as follows (in millions):
Product Warranty Liability
Changes in the warranty accrual for 2008, 2007 and 2006 were as follows (in millions):
Accrued warranty also includes amounts classified in non-current liabilities of $24 million at June 27, 2008 and $17 million at June 29, 2007.
Long-term Purchase Agreements
The Company has entered into long-term purchase agreements with various component suppliers. The commitments depend on specific products ordered and may be subject to minimum quality requirements and future price negotiations. For 2009, 2010, 2011, 2012, 2013 and thereafter, the Company expects these commitments to total approximately $673 million, $4 million, $4 million, $4 million, $3 million and $7 million, respectively. In conjunction with these agreements, the Company has advanced approximately $36 million related to 2009 purchase commitments which is included in advances to suppliers as of June 27, 2008.