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These excerpts taken from the WDC 10-K filed Aug 20, 2008. 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.
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. This excerpt taken from the WDC 10-K filed Aug 28, 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 2008 and 2009,
WD expects these commitments to total approximately
$985 million and $754 million, respectively. In
conjunction with these agreements, the Company has advanced
approximately $99 million related to 2008 and 2009 purchase
commitments, of which $63 million is included in advances
to suppliers and $36 million is included in other long-term
assets as of June 29, 2007. These amounts do not reflect
the reduction in commitments resulting from the planned
acquisition of Komag.
In the normal course of business, the Company is subject to
legal proceedings, lawsuits and other claims. Although the
ultimate aggregate amount of monetary liability or financial
impact with respect to these matters is subject to many
uncertainties and is therefore not predictable with assurance,
management believes that any monetary liability or financial
impact to the Company from these matters or the specified
matters below, individually and in the aggregate, beyond that
provided at June 29, 2007, would not be material to the
Company’s financial condition. However, there can be no
assurance with respect to such result, and monetary liability or
financial impact to the Company from these legal proceedings,
lawsuits and other claims could differ materially from those
projected.
In June 1994, Papst Licensing (“Papst”) brought suit
against the Company alleging infringement by the Company of five
hard drive motor patents owned by Papst. In December 1994, Papst
dismissed its case without prejudice. In July 2002, Papst filed
a new complaint against the Company and several other defendants
alleging infringement by the Company of seventeen of
Papst’s patents related to hard drive motors that the
Company purchased from motor vendors. Papst sought an injunction
and damages. The Company filed an answer on September 4,
2002, denying Papst’s complaint, and the lawsuit was
subsequently stayed pending the outcome of certain other related
litigation. On July 4, 2005, the Company entered into a
Settlement and License Agreement with Papst. In connection with
the settlement, the Company made a one-time payment of
$24 million to Papst on July 29, 2005, of which
$19 million represented a charge to selling, general and
administrative expense for the Company’s 2005 fiscal fourth
quarter ($5 million had been accrued
Table of Contents
WESTERN
DIGITAL CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
in a prior year). In exchange for the payment, Papst has
dismissed with prejudice its lawsuit pending against the
Company, granted the Company a fully-paid license to certain
patents owned by Papst, and released the Company of all past,
present and future claims alleging infringement by the Company
of those Papst patents. The Settlement and License Agreement
resolved all outstanding litigation between the two companies
without any admission of infringement by the Company.
Since the Company’s announcement on July 27, 2006 that
it was conducting a company-initiated, voluntary review of its
historical stock option grants, several purported derivative
actions were filed nominally on behalf of the Company against
certain current and former directors and officers of the Company
in the United States District Court for the Central District of
California and the Superior Court of the State of California for
the County of Orange. These complaints assert claims for
violations of Sections 10(b), 14(a) and 20(a) of the
Securities Exchange Act, accounting, breach of fiduciary duty
and/or
aiding and abetting, constructive fraud, waste of corporate
assets, unjust enrichment, rescission, breach of contract,
violation of the California Corporations Code, abuse of control,
gross mismanagement, and constructive trust in connection with
the Company’s option granting practices. The complaints
seek unspecified monetary damages and other relief against the
individual defendants and certain governance reforms affecting
the Company. The Company is named solely as a nominal defendant
in each action. The parties in the actions engaged in a
voluntary mediation on June 6, 2007, and these discussions
are continuing.
On January 22, 2007, StorMedia Texas LLC filed a complaint
against the Company and several other companies, including other
disk drive manufacturers, for patent infringement in the Eastern
District of Texas alleging infringement of U.S. Patent
No. 6,805,891. The Company served an answer to the
complaint denying all material allegations and asserting
affirmative defenses, and has also filed counterclaims against
StorMedia. The Company intends to defend itself vigorously in
this matter. As described elsewhere in this Annual Report on
Form 10-K,
the Company has entered into a definitive agreement to acquire
Komag. Komag has provided its customers with certain contractual
indemnification undertakings for patent infringement involving
its products and Komag has received claims for reimbursement of
legal defense costs from its customers related to the StorMedia
patent infringement litigation. The Company is evaluating the
position of Komag in relation to this litigation.
This excerpt taken from the WDC 10-K filed Nov 20, 2006. 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 2007, 2008, and
2009, WD expects these commitments to total approximately
$885 million, $1.075 billion and $970 million,
respectively. In conjunction with these agreements, the Company
has advanced approximately $92 million related to 2007 and
2008 purchase commitments, of which $80 million is included
in advances to suppliers and $12 million is included in
other long-term assets as of June 30, 2006.
In the normal course of business, the Company is subject to
legal proceedings, lawsuits and other claims. Although the
ultimate aggregate amount of monetary liability or financial
impact with respect to these matters is subject to many
uncertainties and is therefore not predictable with assurance,
management believes that any monetary liability or financial
impact to the Company from these matters or the specified
matters below, individually and in the aggregate, beyond that
provided at June 30, 2006, would not be material to the
Company’s financial condition. However, there can be no
assurance with respect to such result, and monetary liability or
financial impact to the Company from these legal proceedings,
lawsuits and other claims could differ materially from those
projected.
In June 1994, Papst Licensing (“Papst”) brought suit
against the Company alleging infringement by the Company of five
hard drive motor patents owned by Papst. In December 1994, Papst
dismissed its case without prejudice. In July 2002, Papst
filed a new complaint against the Company and several other
defendants alleging infringement by the Company of seventeen of
Papst’s patents related to hard drive motors that the
Company purchased from motor vendors. Papst sought an injunction
and damages. The Company filed an answer on September 4,
2002, denying Papst’s complaint, and the lawsuit was
subsequently stayed pending the outcome of certain other related
litigation. On July 4, 2005, the Company entered into a
Settlement and License Agreement with Papst. In connection with
the settlement, the Company made a one-time payment of
$24 million to Papst on July 29, 2005, of which
$19 million represented a charge to selling, general and
administrative expense for the Company’s 2005 fiscal fourth
quarter ($5 million had been accrued in a prior year). In
exchange for the payment, Papst has dismissed with prejudice its
lawsuit pending against the Company, granted the Company a
fully-paid license to certain patents owned by Papst, and
released the Company of all past, present and future claims
alleging infringement by the Company of those Papst patents. The
Settlement and License Agreement resolved all outstanding
litigation between the two companies without any admission of
infringement by the Company.
Table of Contents
WESTERN
DIGITAL CORPORATION
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Since the Company’s announcement on July 27, 2006 that
it was conducting a company-initiated, voluntary review of its
historical stock option grants, several purported derivative
actions were filed nominally on behalf of the Company against
certain current and former directors and officers of the Company
in the United States District Court for the Central District of
California and the Superior Court of the State of California for
the County of Orange. These complaints assert claims for
violations of Sections 14(a) and 20(a) of the Securities
Exchange Act, accounting, breach of fiduciary duty and/or aiding
and abetting, constructive fraud, waste of corporate assets,
unjust enrichment, rescission, breach of contract, violation of
the California Corporations Code, abuse of control, gross
mismanagement, and constructive trust in connection with the
Company’s option granting practices. The complaints seek
unspecified monetary damages and other relief against the
individual defendants and certain governance reforms affecting
the Company. The Company is named solely as a nominal defendant
in each action. The Company has joined or intends to join the
other defendants in filing motions to dismiss each action.
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