Western Digital (WDC)

 

Our long-term investments consist of auction-rate securities totaling $28 million as of June 27, 2008. The recent negative conditions in the global credit markets have prevented some investors from liquidating their holdings of auction-rate securities because the amount of securities submitted for sale has exceeded the amount of purchase orders for such securities. If the credit market does not improve, auctions for our invested amounts may fail. If an auction fails for securities in which we have invested, we may be unable to liquidate some or all of our auction-rate securities at par, should we need or desire to access the funds invested in those securities. In the event we need or desire to access these funds, we will not be able to do so until a future auction on these investments is successful or a buyer is found outside the auction process. If a buyer is found but is unwilling to purchase the investments at par, we may incur a loss. For example, during the year ended June 27, 2008, the market values of some of the auction-rate securities we owned were impacted by the macro-economic credit market conditions and as a result, we recognized $10 million of other-than-temporary losses to mark the remaining investments to estimated market value. Further, rating downgrades of the security issuer or the third-parties insuring such investments may require us to adjust the carrying value of these investments through an additional impairment charge.

 

 

Our long-term investments consist of auction-rate securities
totaling $28 million as of June 27, 2008. The recent
negative conditions in the global credit markets have prevented
some investors from liquidating their holdings of auction-rate
securities because the amount of securities submitted for sale
has exceeded the amount of purchase orders for such securities.
If the credit market does not improve, auctions for our invested
amounts may fail. If an auction fails for securities in which we
have invested, we may be unable to liquidate some or all of our
auction-rate securities at par, should we need or desire to
access the funds invested in those securities. In the event we
need or desire to access these funds, we will not be able to do
so until a future auction on these investments is successful or
a buyer is found outside the auction process. If a buyer is
found but is unwilling to purchase the investments at par, we
may incur a loss. For example, during the year ended
June 27, 2008, the market values of some of the
auction-rate securities we owned were impacted by the
macro-economic credit market conditions and as a result, we
recognized $10 million of other-than-temporary losses to
mark the remaining investments to estimated market value.
Further, rating downgrades of the security issuer or the
third-parties insuring such investments may require us to adjust
the carrying value of these investments through an additional
impairment charge.