WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
If available, fixed income securities are valued using the close price reported on the major market on which the
individual securities are traded and are classified as Level 1. The fair value of other fixed income securities is typically
estimated using pricing models and quoted prices of securities with similar characteristics, and is generally classified
as Level 2.
Cash includes money market accounts that are valued at their cost plus interest on a daily basis, which approx-
imates fair value. Short-term investments represent securities with original maturities of one year or less. These assets
are classified as either Level 1 or Level 2.
Alternative investment valuations require significant judgment due to the absence of quoted market prices, the
inherent lack of liquidity and the long-term nature of the underlying assets. These assets are valued based on
individual fund manager valuation models utilizing available and relevant market data. These investments are classi-
fied as Level 3.
Cash Flows
Contributions
The Company's expected employer contributions for 2013 are $14 million for its Japanese defined benefit pen-
sion plans.
Estimated Future Benefits Payments
Annual benefit payments from the Japanese defined benefit pension plans are estimated to range from $6 million
to $9 million annually over the next five years.
Note 14.
Acquisitions
HGST
On March 8, 2012, the Company, through WDI, its indirect wholly-owned subsidiary, completed the Acquis-
ition pursuant to the SPA. HGST is a developer and manufacturer of storage devices. As a result of the Acquisition,
HGST became an indirect wholly-owned subsidiary of the Company. The preliminary, aggregate purchase price of the
Acquisition was approximately $4.7 billion, which was paid on the Closing Date and funded with $3.7 billion of
existing cash and cash from new debt, as well as 25 million newly issued shares of the Company's common stock with
a fair value of $877 million. The fair value of the newly issued shares of the Company's common stock was determined
based on the closing market price of the Company's shares of common stock on the date of the Acquisition, less a 10%
discount for lack of marketability as the shares issued are subject to a restriction that limits their trade or transfer for
one year from the Closing Date. The Acquisition is intended over time, and subject to compliance with applicable
regulatory conditions imposed on the Acquisition, to result in a more efficient and innovative customer-focused stor-
age company with significant operating scale, strong global talent and a broad product lineup backed by a rich tech-
nology portfolio. HGST's results of operations since the date of the Acquisition are included in the consolidated
financial statements.
The total preliminary purchase price for HGST was approximately $4.7 billion and was comprised of:
(in millions)
Mar. 8,
2012
Acquisition of all issued and outstanding paid-up share capital of HGST . . . . . . . . . . . . . . . . . . . .
$4,612
Fair value of stock options, restricted stock-based awards and SARs assumed . . . . . . . . . . . . . . . . .
102
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,714
85