WESTERN DIGITAL CORP Goodwill & Intangibles Disclosure
Carrying Amount | |||
(in millions) | |||
Balance at June 30, 2017 | $ | 10,014 | |
Goodwill recorded in connection with acquisitions | 61 | ||
Balance at June 29, 2018 | 10,075 | ||
Foreign currency translation adjustment | 1 | ||
Balance at June 28, 2019 | $ | 10,076 | |
June 28, 2019 | |||||||||||||
Weighted Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(in years) | (in millions) | ||||||||||||
Finite: | |||||||||||||
Existing technology | 3 | $ | 4,332 | $ | (3,316 | ) | $ | 1,016 | |||||
Trade names and trademarks | 7 | 648 | (310 | ) | 338 | ||||||||
Customer relationships | 6 | 635 | (372 | ) | 263 | ||||||||
Other | 2 | 180 | (180 | ) | — | ||||||||
Leasehold interests | 31 | 29 | (7 | ) | 22 | ||||||||
Total finite intangible assets | 5,824 | (4,185 | ) | 1,639 | |||||||||
In-process research and development | 72 | — | 72 | ||||||||||
Total intangible assets | $ | 5,896 | $ | (4,185 | ) | $ | 1,711 | ||||||
June 29, 2018 | |||||||||||||
Weighted Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(in years) | (in millions) | ||||||||||||
Finite: | |||||||||||||
Existing technology | 3 | $ | 4,323 | $ | (2,528 | ) | $ | 1,795 | |||||
Trade names and trademarks | 7 | 648 | (222 | ) | 426 | ||||||||
Customer relationships | 6 | 635 | (299 | ) | 336 | ||||||||
Other | 2 | 180 | (161 | ) | 19 | ||||||||
Leasehold interests | 31 | 32 | (8 | ) | 24 | ||||||||
Total finite intangible assets | 5,818 | (3,218 | ) | 2,600 | |||||||||
In-process research and development | 80 | — | 80 | ||||||||||
Total intangible assets | $ | 5,898 | $ | (3,218 | ) | $ | 2,680 | ||||||
2019 | 2018 | 2017 | |||||||||
(In millions) | |||||||||||
Intangible asset amortization | $ | 968 | $ | 1,185 | $ | 1,169 | |||||
Future Intangible Asset Amortization Expense | |||
(in millions) | |||
Fiscal year | |||
2020 | $ | 758 | |
2021 | 503 | ||
2022 | 226 | ||
2023 | 134 | ||
2024 and thereafter | 18 | ||
Total future amortization expense | $ | 1,639 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2019 | Aug 27, 2019 | Showing above |
| 2018 | Aug 24, 2018 | |
| 2017 | Aug 29, 2017 | |
| 2016 | Aug 29, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.