8-KRegulation FD

WESTERN DIGITAL CORP 8-K Report, Regulation FD Disclosure (Jan 24, 2012)

Filed January 24, 2012For Securities:WDC

Summary

Western Digital Corporation (WDC) reported on January 23, 2012, regarding a confidential arbitration action in Minnesota. A sole arbitrator awarded Seagate Technology, LLC pre-award interest of $105.4 million, in addition to the previously announced $525 million award. The company has filed a petition to have this final arbitration award vacated. Despite this additional financial obligation, WDC stated that it does not believe the arbitration award will impact its operational capabilities, its ongoing recovery efforts in Thailand, or its planned acquisition of Viviti Technologies Ltd. (formerly Hitachi GST), provided regulatory approvals are obtained. The company's forward-looking statements caution investors about potential risks and uncertainties, including recovery costs, operational performance, regulatory hurdles for the Hitachi GST acquisition, and integration challenges.

Key Highlights

  • 1WDC was awarded an additional $105.4 million in pre-award interest to Seagate Technology, LLC in an arbitration case, bringing the total award to $630.4 million ($525M + $105.4M).
  • 2The company is actively contesting the final arbitration award by filing a petition to have it vacated in Minnesota state court.
  • 3Western Digital asserts that this arbitration award is not expected to hinder its day-to-day operations.
  • 4The company also believes the award will not impede its progress in recovering from its Thailand operations.
  • 5WDC reiterated that the acquisition of Hitachi GST remains on track, contingent on securing necessary regulatory approvals.
  • 6The filing includes a cautionary note on forward-looking statements, highlighting potential risks such as higher recovery costs, operational performance impacts, and acquisition-related challenges.

Frequently Asked Questions

The initial award was $525 million, and an additional $105.4 million in pre-award interest was awarded. This brings the total to $630.4 million. However, Western Digital is seeking to have this final award vacated.

Western Digital stated that it does not believe the award will affect its ability to conduct operations, complete recovery efforts in Thailand, or close the planned acquisition of Hitachi GST, assuming regulatory approvals are obtained.

Western Digital has filed a petition in the District Court of Hennepin County, Minnesota, to have the final arbitration award vacated.

The company warned of risks including higher than anticipated recovery costs, unfavorable operational results impacting debt covenants, delays or failure to obtain regulatory approvals for the Hitachi GST acquisition, failure to consummate the acquisition, and challenges in integrating Hitachi GST.