Western Digital (WDC)

 

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition in Financial Statements.” Under SAB No. 104, revenue is recognized when the title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, delivery has occurred, or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured. The Company establishes provisions against revenue and cost of revenue for estimated sales returns in the same period that the related revenue is recognized based on existing product return notifications.

 

In accordance with standard industry practice, the Company has agreements with resellers that provide limited price protection for inventories held by resellers at the time of published list price reductions and other incentive programs. Either party may terminate these agreements upon written notice. In the event of termination, the Company may be obligated to repurchase a certain portion of the resellers’ inventory. The Company records a reduction to revenue for estimated price protection and other programs in effect until the resellers sell such inventory to their customers. These adjustments are based on anticipated price decreases during the reseller holding period, estimated amounts to be reimbursed to qualifying customers, as well as historical pricing information. If end-market demand for hard drives declines significantly, the Company may have to increase sell-through incentive payments to resellers, resulting in an increase in price protection allowances, which could adversely impact operating results. Net revenue recognized on sales to resellers was approximately $3.8 billion, $2.8 billion and $2.0 billion in 2008, 2007 and 2006, respectively. Repurchases of reseller inventory were not material in 2008, 2007 or 2006.

 

Western Digital establishes an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency, disputes or other collection issues. In addition, the Company routinely analyzes the different receivable aging categories and its bad debt loss history and establishes reserves based on a combination of past due receivables and expected future losses based primarily on the Company’s historical levels of bad debt losses. If the financial condition of a significant customer deteriorates resulting in its inability to pay its accounts when due, or if the overall loss history of the Company changes significantly, an adjustment in the Company’s allowance for doubtful accounts would be required, which could affect operating results.

 

 

The Company recognizes revenue in accordance with SEC Staff
Accounting Bulletin (“SAB”) No. 104,
“Revenue Recognition in Financial Statements.” Under
SAB No. 104, revenue is recognized when the title and
risk of loss have passed to the customer, there is persuasive
evidence of an arrangement, delivery has occurred, or services
have been rendered, the sales price is fixed or determinable and
collectability is reasonably assured. The Company establishes
provisions against revenue and cost of revenue for estimated
sales returns in the same period that the related revenue is
recognized based on existing product return notifications.

 

In accordance with standard industry practice, the Company has
agreements with resellers that provide limited price protection
for inventories held by resellers at the time of published list
price reductions and other incentive programs. Either party may
terminate these agreements upon written notice. In the event of
termination, the Company may be obligated to repurchase a
certain portion of the resellers’ inventory. The Company
records a reduction to revenue for estimated price protection
and other programs in effect until the resellers sell such
inventory to their customers. These adjustments are based on
anticipated price decreases during the reseller holding period,
estimated amounts to be reimbursed to qualifying customers, as
well as historical pricing information. If end-market demand for
hard drives declines significantly, the Company may have to
increase sell-through incentive payments to resellers, resulting
in an increase in price protection allowances, which could
adversely impact operating results. Net revenue recognized on
sales to resellers was approximately $3.8 billion,
$2.8 billion and $2.0 billion in 2008, 2007 and 2006,
respectively. Repurchases of reseller inventory were not
material in 2008, 2007 or 2006.

 

Western Digital establishes an allowance for doubtful accounts
by analyzing specific customer accounts and assessing the risk
of loss based on insolvency, disputes or other collection
issues. In addition, the Company routinely analyzes the
different receivable aging categories and its bad debt loss
history and establishes reserves based on a combination of past
due receivables and expected future losses based primarily on
the Company’s historical levels of bad debt losses. If the
financial condition of a significant customer deteriorates
resulting in its inability to pay its accounts when due, or if
the overall loss history of the Company changes significantly,
an adjustment in the Company’s allowance for doubtful
accounts would be required, which could affect operating results.

 

 

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition in Financial Statements.” Under SAB No. 104, revenue is recognized when the title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, delivery has occurred, or services have been rendered, the sales price is fixed or determinable and collectibility is reasonably assured. The Company establishes provisions against revenue and cost of revenue for estimated sales returns in the same period that the related revenue is recognized based on existing product return notifications.

 

In accordance with standard industry practice, the Company has agreements with resellers that provide limited price protection for inventories held by resellers at the time of published list price reductions and other incentive programs. Either party may terminate these agreements upon written notice. In the event of termination, the Company may be obligated to repurchase a certain portion of the resellers’ inventory. The Company records a reduction to revenue for estimated price protection and other programs in effect until the resellers sell such inventory to their customers. These adjustments are based on anticipated price decreases during the reseller holding period, estimated amounts to be reimbursed to qualifying customers, as well as historical pricing information. If end-market demand for hard drives declines significantly, the Company may have to increase sell-through incentive payments to resellers, resulting in an increase in price protection allowances, which could adversely impact operating results. Net revenue recognized on sales to resellers was approximately $2.8 billion, $2.0 billion and $1.5 billion in 2007, 2006 and 2005, respectively. Repurchases of reseller inventory were not material in 2007, 2006 or 2005.

 

Western Digital establishes an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency, disputes or other collection issues. In addition, the Company routinely

 

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition in Financial Statements.” Under SAB No. 104, revenue is recognized when the title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, delivery has occurred, or services have been rendered, the sales price is fixed or determinable and collectibility is reasonably assured. The Company establishes provisions against revenue and cost of revenue for estimated sales returns in the same period that the related revenue is recognized based on existing product return notifications.

 

In accordance with standard industry practice, the Company has agreements with resellers that provide limited price protection for inventories held by resellers at the time of published list price reductions and other incentive programs. Either party may terminate these agreements upon written notice. In the event of termination, the Company may be obligated to repurchase a certain portion of the resellers’ inventory. The Company records a reduction to revenue for estimated price protection and other programs in effect until the resellers sell such inventory to their customers. These adjustments are based on anticipated price decreases during the reseller holding period, estimated amounts to be reimbursed to qualifying customers, as well as historical pricing information. If end-market demand for hard drives declines significantly, the Company may have to increase sell-through incentive payments to resellers, resulting in an increase in price protection allowances, which could adversely impact operating results. Net revenue recognized on sales to resellers was approximately $2.0 billion, $1.5 billion and $1.5 billion in 2006, 2005 and 2004, respectively. Repurchases of reseller inventory were not material in 2006, 2005 or 2004.

 

Western Digital establishes an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency, disputes or other collection issues. In addition, the Company routinely analyzes the different receivable aging categories and its bad debt loss history and establishes reserves based on a combination of past due receivables and expected future losses based primarily on the Company’s historical levels of bad debt losses. If the financial condition of a significant customer deteriorates resulting in its inability to pay its accounts when due, or if the overall loss history of the Company changes significantly, an adjustment in the Company’s allowance for doubtful accounts would be required, which could affect operating results.