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This excerpt taken from the WDC 10-K filed Aug 20, 2008. Note 4. Commitments
and Contingencies
Lease
Commitments
The Company leases certain facilities and equipment under
long-term, non-cancelable operating and capital leases. The
Company’s operating leases consist of leased property and
equipment that expire at various dates through 2015.
Table of Contents
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
Company’s 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.
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