Western Digital (WDC)

 

Net cash used in investing activities for 2008 was $1.3 billion as compared to $383 million for 2007 and $303 million for 2006. During 2008, cash used in investing activities consisted of $927 million for acquisitions and $615 million for capital expenditures, partially offset by cash provided by investments of $221 million. During 2007, cash used in investing activities consisted of $324 million for capital expenditures and $59 million for investments. The increase in capital expenditures in 2008 compared to 2007 primarily consisted of the on-going conversion of our head wafer fabrication facilities to utilizing 8-inch wafers from 6-inch wafers, continued investment in advanced head technologies, increased capacity for our broadening and growing product portfolio and continued investment in media equipment as a result of the Acquisition. The increase in capital expenditures in 2007 compared to 2006 was primarily a result of equipment purchased to support our investments in advanced head technologies, new product platforms and capacity for our broadening and growing product portfolio.

 

Net cash used in investing activities for 2007 was $383 million as compared to $303 million for 2006 and $274 million for 2005. During 2007, cash used in investing activities consisted of $324 million for capital expenditures and $59 million for short-term investments. During 2006, cash used in investing activities consisted of $268 million for capital expenditures and $35 million for short-term investments. The increase in capital expenditures in 2007 compared to 2006 primarily consists of equipment purchased to support our investments in advanced head technologies, new product platforms and capacity for our broadening and growing product portfolio. The increase in capital expenditures in 2006 compared to 2005 was primarily a result of assets purchased to upgrade our head manufacturing capabilities, increased desktop and mobile hard drive production capabilities and for the normal replacement of existing assets. Additionally, during 2006, we purchased our previously leased head wafer manufacturing facility in Fremont, California for $27 million. For 2008, we expect capital additions to be between $600 million and $650 million, of which approximately $200 million will be utilized for the expansion of our head wafer fabrication capacity. Depreciation and amortization for 2008 is expected to be between $270 and $290 million.

 

 

Net cash used in investing activities for 2006 was $337 million as compared to $314 million for 2005 and $259 million for 2004. During 2006, cash used in investing activities consisted of $302 million for capital expenditures and $35 million for short-term investments. During 2005, cash used in investing activities consisted of $233 million for capital expenditures and $81 million for short-term investments. The net cash used in investing activities for 2004 consisted of $132 million for capital expenditures, $95 million for the Read-Rite asset acquisition and $32 million for short-term investments. The increases in capital expenditures in 2006 and 2005 were primarily a result of assets purchased to upgrade our head manufacturing capabilities, increased desktop and mobile hard drive production capabilities and for the normal replacement of existing assets. Additionally, during 2006, we purchased our previously leased head wafer manufacturing facility in Fremont, California for $27 million. The increase in short-term investments in 2005 was a result of additional investments in auction rate securities. For 2007, we expect capital expenditures to be approximately $350 million to $375 million consisting primarily of investments in advanced head technologies, new product platforms and capacity for our broadening and growing product portfolio.