WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
For the year ended June 29, 2012, the Company had a $1 million settlement in its Level 3 financial assets meas-
ured on a recurring basis, reducing the balance from $15 million to $14 million. For the year ended July 1, 2011,
there were no changes in Level 3 financial assets measured on a recurring basis.
Note 11.
Foreign Exchange Contracts
As of June 29, 2012, the net amount of existing losses expected to be reclassified into earnings within the next
twelve months was $16 million and the Company did not have any foreign exchange contracts with credit-risk-related
contingent features. The Company opened $3.2 billion and $4.7 billion, and closed $3.2 billion and $3.2 billion, in
foreign exchange contracts for the years ended June 29, 2012 and July 1, 2011, respectively. The fair value and bal-
ance sheet location of such contracts were as follows (in millions):
Asset Derivatives
Liability Derivatives
2012
2011
2012
2011
Derivatives Designated as
Hedging Instruments
Balance Sheet
Location
Fair Value
Balance Sheet
Location
Fair Value
Balance Sheet
Location
Fair Value
Balance Sheet
Location
Fair Value
Foreign exchange
contracts . . . . . . . . . . . . Other current assets
$1
--
--
Accrued expenses
$22
Accrued expenses
$5
The impact on the consolidated financial statements was as follows (in millions):
Derivatives in Cash
Flow Hedging Relationships
Amount of Gain (Loss)
Recognized in
Accumulated OCI
on Derivatives
Location of Gain (Loss)
Reclassified from
Accumulated
OCI into Income
Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income
2012
2011
2012
2011
Foreign exchange contracts . . . . . . . . . . . . . .$(12)
$77
Cost of revenue
$1
$93
The total net realized transaction and foreign exchange contract currency gains and losses were not material to
the consolidated financial statements during 2012, 2011 and 2010, respectively. See Notes 1 and 10 for additional
disclosures related to the Company's foreign exchange contracts.
Note 12.
Other Intangible Assets
In 2012, the Company acquired $834 million of intangibles as a result of the HGST acquisition, primarily
related to existing technology, customer relationships and in-process research and development. See Note 14 below for
a discussion of intangible assets acquired as a result of the Acquisition. Other intangible assets consist primarily of
technology acquired in business combinations and are amortized on a straight-line basis over the respective estimated
useful lives of the assets. Intangible assets as of June 29, 2012 were as follows:
Weighted Average
Amortization Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(in years)
(in millions)
(in millions)
(in millions)
Existing technology . . . . . . . . . . . . . . . .
5
$543
$108
$435
Customer relationships . . . . . . . . . . . . . .
4
139
14
125
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
65
10
55
Leasehold interests . . . . . . . . . . . . . . . . .
28
43
2
41
In-process research and development . . .
--
143
--
143
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
$933
$134
$799
Other intangible assets in the table above include a joint development agreement, trade names and a
non-compete agreement.
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