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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarter Ended April 1, 2007
 Commission File Number 0-16852
 KOMAG, INCORPORATED
  
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INDEX
KOMAG, INCORPORATED
 PagePART I. FINANCIAL INFORMATIONItem1.
    
    Condensed Consolidated Financial Statements (Unaudited)
    
    
    4Condensed Consolidated Statements of Income  three months ended April 1, 2007 and April 2, 2006
    
    
    4Condensed Consolidated Balance Sheets  April 1, 2007 and December 31, 2006
    
    
    5Condensed Consolidated Statements of Cash Flows  three months ended April 1, 2007 and April 2,
2006
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7-11Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12-20Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4.
    
    Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    22Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 6.
    
    Exhibits
    
    
    37SIGNATURES
    
    
    
    
    38EXHIBIT 10.1EXHIBIT 10.2EXHIBIT 10.3EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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PART I. FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 KOMAG, INCORPORATED
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
 (Unaudited)
 Three Months EndedApril 1, 2007
    
    
    April 2, 2006Net sales
    
    $
    264,666
    
    
    $
    208,512Cost of sales
    
    
    205,660
    
    
    
    149,419Gross profit
    
    
    59,006
    
    
    
    59,093Operating expenses:Research, development, and engineering
    
    
    16,499
    
    
    
    15,075Selling, general, and administrative
    
    
    8,467
    
    
    
    8,024Gain on disposal of assets
    
    
    (54
    )
    
    
    (60
    )24,912
    
    
    
    23,039Operating income
    
    
    34,094
    
    
    
    36,054Other income (expense):Interest income
    
    
    1,459
    
    
    
    2,071Interest expense
    
    
    (511
    )
    
    
    (441
    )Other expense, net
    
    
    (5
    )
    
    
    (476
    )943
    
    
    
    1,154Income before income taxes
    
    
    35,037
    
    
    
    37,208Provision for income taxes
    
    
    2,060
    
    
    
    971Net income
    
    $
    32,977
    
    
    $
    36,237Basic net income per share
    
    $
    1.09
    
    
    $
    1.22Diluted net income per share
    
    $
    0.99
    
    
    $
    1.09Number of shares used in basic per share computations
    
    
    30,166
    
    
    
    29,685Number of shares used in diluted per share computations
    
    
    33,811
    
    
    
    33,499
 4
    Table of Contents   KOMAG, INCORPORATED
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except par value)
 (Unaudited)
 April 1, 2007
    
    
    December 31, 2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    191,458
    
    
    $
    129,632Short-term investments
    
    
    62,000
    
    
    
    41,500Accounts receivable (less allowances of $2,427 and $2,326 respectively)
    
    
    136,941
    
    
    
    140,230Inventories
    
    
    159,601
    
    
    
    104,181Prepaid expenses and deposits
    
    
    2,437
    
    
    
    2,119Total current assets
    
    
    552,437
    
    
    
    417,662Property, plant, and equipment (net of accumulated depreciation of $244,616
and $219,388, respectively)
    
    
    538,890
    
    
    
    542,585Deferred income taxes
    
    
    5,712
    
    
    
    7,346Other assets
    
    
    15,956
    
    
    
    10,094$
    1,112,995
    
    
    $
    977,687LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesTrade accounts payable
    
    $
    148,769
    
    
    $
    139,477Customer advances
    
    
    101,139
    
    
    
    127,181Accrued expenses and other current liabilities
    
    
    15,651
    
    
    
    25,412Current portion of long-term debt
    
    
    80,500
    
    
    
    Total current liabilities
    
    
    346,059
    
    
    
    292,070Long-term debt
    
    
    250,000
    
    
    
    80,500Other long term liabilities
    
    
    3,677
    
    
    
    3,091Total liabilities
    
    
    599,736
    
    
    
    375,661Stockholders equityCommon stock, $0.01 par value per share:Authorized - 120,000 sharesIssued and outstanding - 27,758 and 31,178 shares, respectively
    
    
    278
    
    
    
    312Additional paid-in capital
    
    
    252,030
    
    
    
    283,679Accumulated other comprehensive loss
    
    
    (600
    )
    
    
    (611
    )Retained earnings
    
    
    261,551
    
    
    
    318,646Total stockholders equity
    
    
    513,259
    
    
    
    602,026$
    1,112,995
    
    
    $
    977,687
 5
    Table of Contents   KOMAG, INCORPORATED
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Three Months EndedApril 1, 2007
    
    
    April 2, 2006Operating ActivitiesNet income
    
    $
    32,977
    
    
    $
    36,237Adjustments to reconcile net income to net cash provided
by (used in) operating activities:Depreciation and amortization of property, plant, and equipment
    
    
    25,562
    
    
    
    14,476Deferred income taxes
    
    
    1,735
    
    
    
    Tax provision charged to additional paid-in capital
    
    
    
    
    
    
    810Stock-based compensation
    
    
    4,055
    
    
    
    3,536Non-cash interest charges
    
    
    50
    
    
    
    38Other non-cash charges
    
    
    143
    
    
    
    116Foreign exchange loss
    
    
    1,781
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    3,316
    
    
    
    (3,245
    )Inventories
    
    
    (55,420
    )
    
    
    (18,517
    )Prepaid expenses and deposits
    
    
    (419
    )
    
    
    428Trade accounts payable
    
    
    10,295
    
    
    
    16,767Customer advances
    
    
    (26,042
    )
    
    
    19,642Accrued expenses and other liabilities
    
    
    (9,478
    )
    
    
    (11,555
    )Other non-current assets
    
    
    817
    
    
    
    Net cash (used in) provided by operating activities
    
    
    (10,628
    )
    
    
    58,733Investing ActivitiesAcquisition of property, plant, and equipment
    
    
    (24,655
    )
    
    
    (73,988
    )Purchases of short-term investments
    
    
    (55,200
    )
    
    
    (36,850
    )Proceeds from short-term investments
    
    
    34,700
    
    
    
    56,900Proceeds from disposal of property, plant, and equipment
    
    
    92
    
    
    
    99Other
    
    
    6
    
    
    
    (65
    )Net cash used in investing activities
    
    
    (45,057
    )
    
    
    (53,904
    )Financing ActivitiesProceeds from issuance of long-term debt, net of issuance costs
    
    
    243,235
    
    
    
    Repurchase of common stock
    
    
    (126,492
    )
    
    
    (1,049
    )Proceeds from sale of common stock
    
    
    682
    
    
    
    2,225Net cash provided by financing activities
    
    
    117,425
    
    
    
    1,176Effect of exchange rate changes on cash and cash equivalents
    
    
    86
    
    
    
    Increase in cash and cash equivalents
    
    
    61,826
    
    
    
    6,005Cash and cash equivalents at beginning of period
    
    
    129,632
    
    
    
    99,984Cash and cash equivalents at end of period
    
    $
    191,458
    
    
    $
    105,989
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Note 1. Basis of Presentation and Summary of Significant Accounting Policies
  Use of Estimates in the Preparation of Financial Statements:
 Fiscal Year:
 Inventories:
 April 1, 2007
    
    
    December 31, 2006Raw materials
    
    $
    130,992
    
    
    $
    78,701Work in process
    
    
    17,368
    
    
    
    15,900Finished goods
    
    
    11,241
    
    
    
    9,580$
    159,601
    
    
    $
    104,181
 Computation of Net Income Per Share:
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Three Months EndedApril 1, 2007
    
    
    April 2, 2006Numerator for basic net income per share:Net income as reported
    
    $
    32,977
    
    
    $
    36,237Numerator for diluted net income per share:Net income as reported
    
    $
    32,977
    
    
    $
    36,237Interest adjustment related to contigently convertible debt
    
    
    511
    
    
    
    441$
    33,488
    
    
    $
    36,678Denominator for basic net income per share:Weighted average shares outstanding
    
    
    30,166
    
    
    
    29,685Denominator for diluted net income per share:Weighted average shares outstanding
    
    
    30,166
    
    
    
    29,685Effect of dilutive securities:Shares under contingently convertible debt
    
    
    3,286
    
    
    
    3,049Stock options
    
    
    164
    
    
    
    473Unvested common stock
    
    
    195
    
    
    
    29233,811
    
    
    
    33,499Basic net income per share
    
    $
    1.09
    
    
    $
    1.22Diluted net income per share
    
    $
    0.99
    
    
    $
    1.09
 Recent Accounting Pronouncements: Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 Fair Value Measurement .
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Note 2. Common Stock
  Note 3. Concentration of Customer, Supplier, and Geographic Risk
  Three Months EndedApril 1, 2007
    
    April 2, 2006Seagate Technology
    
    
    37
    %
    
    
    39
    %Western Digital Corporation
    
    
    37
    %
    
    
    35
    %Hitachi Global Storage Technologies (1)
    
    
    21
    %
    
    
    22
    %
 
 (1)
    
    Includes sales to Hitachi Global Storage Technologies contract
manufacturer.(2)
    
    Total revenue used to calculate the customer concentration percentage
excludes the sale of approximately $11.2 million of precious metal inventory in the
first quarter of 2007.   9




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Note 4. Accrued Expenses and Other Current Liabilities
  April 1, 2007
    
    
    December 31, 2006Accrued compensation and benefits
    
    $
    12,586
    
    
    $
    22,481Other current liabilities
    
    
    3,065
    
    
    
    2,931$
    15,651
    
    
    $
    25,412
 Note 5. Customer Advances
  Note 6. Debt
 Conversion of Convertible Subordinated Notes due 2024
  Convertible Subordinated Notes due 2014
  10




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Note 7. Income Taxes
 , Accounting for Uncertainty
in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48),
    11




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    12




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Results of Operations
 Overview
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Three Months EndedApril 1, 2007
    
    
    April 2, 2006Net sales
    
    $
    264,666
    
    
    
    100.0
    %
    
    $
    208,512
    
    
    
    100.0
    %Cost of sales
    
    
    205,660
    
    
    
    77.7
    %
    
    
    149,419
    
    
    
    71.7
    %Gross profit
    
    
    59,006
    
    
    
    22.3
    %
    
    
    59,093
    
    
    
    28.3
    %Research, development, and engineering
    
    
    16,499
    
    
    
    6.2
    %
    
    
    15,075
    
    
    
    7.2
    %Selling, general, and administrative expense
    
    
    8,467
    
    
    
    3.2
    %
    
    
    8,024
    
    
    
    3.8
    %Gain on disposal of assets
    
    
    (54
    )
    
    
    (0.0
    %)
    
    
    (60
    )
    
    
    (0.0
    %)Interest income
    
    
    1,459
    
    
    
    0.6
    %
    
    
    2,071
    
    
    
    1.0
    %Interest expense
    
    
    (511
    )
    
    
    (0.2
    %)
    
    
    (441
    )
    
    
    (0.2
    %)Other expense, net
    
    
    (5
    )
    
    
    (0.0
    %)
    
    
    (476
    )
    
    
    (0.2
    %)Provision for income taxes
    
    
    2,060
    
    
    
    0.8
    %
    
    
    971
    
    
    
    0.5
    %Net income
    
    $
    32,977
    
    
    
    12.5
    %
    
    $
    36,237
    
    
    
    17.4
    %
 Net Sales
    14




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Gross Profit
  Research, Development, and Engineering Expenses
  Selling, General, and Administrative Expenses
  Interest Expense
  15




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Tax provision
  Critical Accounting Policies
  Allowance for Sales Returns
   Inventory Obsolescence
  16




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Provision for Income Tax and Valuation Allowance
 Accounting for Income Taxes,
 Accounting for Uncertainty in Income Taxes
 Stock-based Compensation
 Share-Based Payment.
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Liquidity and Capital Resources
  
    
    net income of $33.0 million, net of non-cash depreciation and amortization of
property, plant and equipment of $25.6 million and other non-cash charges, of $7.8
million;
    
    an accounts receivable decrease of $3.3 million, which primarily reflected
faster collections;
    
    an inventory increase of $55.4 million, which primarily reflected increased
precious metal inventory to support the transition of technology to PMR;
    
    an accounts payable increase of $10.3 million;
    
    a net decrease in customer advances of $26.0 million, which primarily reflected
repayments of advances to customers; and
    
    an accrued expenses and other liabilities decrease of $9.5 million, which
primarily reflected payments of incentive compensation accruals.
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Remainderof2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    TotalLong-Term Debt Obligations
    
    $
    80,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    250,000
    
    
    $
    330,500Operating Lease Obligations
    
    
    1,642
    
    
    
    2,065
    
    
    
    3,162
    
    
    
    3,152
    
    
    
    3,145
    
    
    
    10,100
    
    
    
    23,266Unconditional Purchase
Obligations (1)
    
    
    2,097
    
    
    
    2,632
    
    
    
    2,632
    
    
    
    2,632
    
    
    
    2,609
    
    
    
    9,295
    
    
    
    21,897Total Contractual Cash
Obligations
    
    $
    84,239
    
    
    $
    4,697
    
    
    $
    5,794
    
    
    $
    5,784
    
    
    $
    5,754
    
    
    $
    269,395
    
    
    $
    375,663
 
 (1)
    
    Unconditional purchase obligations are defined as agreements to purchase goods or
services that are enforceable and legally binding, and that specify all significant terms,
including: fixed or minimum quantities to be purchased; fixed, minimum, or variable pricing
provisions; and the approximate timing of the transactions. The amounts are based on our
contractual commitments.  19




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Off-Balance Sheet Arrangements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     20




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ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Internal Control over Financial Reporting
  
    
    pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the company;
    
    provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and
    
    provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the companys assets that could have a
material effect on the financial statements.
  Changes in Internal Control Over Financial Reporting
  Limitations on the Effectiveness of Controls
  21




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PART II. OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
 These risks and uncertainties are not the only ones facing our company. Additional risks and
uncertainties that we are unaware of or currently deem immaterial may also become important factors
that may harm our business. If any of the following risks actually occur, or other unexpected
events occur, our business, financial condition and results of operations could be materially
adversely affected, the value of our stock could decline, and investors may lose part or all of
their investment. Further, this Form 10-Q contains forward-looking statements, and actual results
may differ significantly from the results contemplated by our forward-looking statements.
 Risks Related to Our Business
 Our business is concentrated in the disk drive market, so downturns in the disk drive manufacturing
market and related markets may decrease our sales and margins, which would materially and adversely
affect our business.
  The disk drive market in which our business is concentrated is seasonal and cyclical, so it is
difficult to predict our sales and margins, which could make our stock price more volatile.
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If we are unable to perform successfully in the highly competitive and increasingly concentrated
disk industry, we may not be able to maintain or gain additional market share and our business and
operating results would be harmed.
  If we do not keep pace with the rapid technological changes in the disk drive industry, we will not
be able to compete effectively, and our operating results could suffer.
 1 2
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If we fail to effectively implement our perpendicular magnetic recording media (PMR) product
transition plans, our operating results will suffer.
  If we are unable to minimize the use of precious metals in our products and the price and scarcity
of these precious metals continue to increase, our ability to transition to PMR products could be
delayed or eliminated.
  
    
    our PMR products could become more expensive and therefore less competitive
than alternative or existing technologies regardless of technological superiority; or
    
    our PMR products could simply become unsustainably expensive to manufacture,
which would require us to abandon the development of PMR products and cause us to sell
more LMR products.
 Because
we depend on a limited number of suppliers, if for any
reason we are unable to obtain adequate supplies of high quality
materials or equipment, our production, operating results and growth potential could be
harmed.
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
    
    our production capacity could be reduced if we lack the supplies necessary to
manufacture the number of products for which we have sales orders, which could cause us
to breach agreements with our customers, make price concessions or otherwise cause a
reduction in our revenues;
    
    we might have to modify our products, which could both delay shipment of those
products and cause those modified products to be more expensive to manufacture
resulting is a lower rate of return on those products;
    
    even if we were able to obtain alternative supplies, those supplies could be
more expensive, thereby causing our costs of production to increase;
    
    if we are not able to pass these price increases along to our customers, our
operating margins would decline; and
    
    we might be delayed in shipping products or unable to ship products at all,
which could cause existing and potential customers to make purchases from our
competitors, thus causing our revenues and margins to decline.
  We receive a large percentage of our net sales from only a few disk drive manufacturing customers,
the loss or reduction of any of which would materially and adversely affect our business and sales.
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Our agreements with each of our major customers require us to meet certain production volumes and
to provide certain credits on future disk sales, and if we fail to successfully perform under these
agreements, we may incur substantial costs and expenses, and our business and financial condition
could be materially and adversely affected.
  Our failure to timely and efficiently transition our enterprise resource planning software from the
system we currently use to a new system, could adversely affect our business and financial results.
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If we are not able to attract and retain key personnel our business and operation results could be
harmed.
  If our production capacity is underutilized, our gross margin will be adversely affected and we
could sustain significant losses.
  Internal disk operations of disk drive manufacturers may adversely affect our ability to sell our
disk products.
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All of our manufacturing operations are in Malaysia and our foreign operations and international
sales subject
us to additional risks inherent in doing business on an international level that could make it more
costly and difficult to conduct our business.
    
    
    compliance with changing legal and regulatory requirements of foreign jurisdictions;
    
    fluctuations in tariffs or other trade barriers;
    
    difficulties in staffing and managing foreign operations;
    
    political, social, and economic instability;
    
    increased exposure to threats and acts of terrorism;
    
    exposure to taxes in multiple jurisdictions;
    
    exposure to fluctuations in the value of currency;
    
    local infrastructure problems or failures including but not limited to loss of
power and water supply; and
    
    transportation delays and interruptions.
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Because our products require a lengthy sales cycle with no assurance of high volume sales, we may
expend significant financial and other resources without a return.
  Disk drive programs are highly customized. If we fail to respond to our customers demanding
requirements, we will not be able to compete effectively.
  If we fail to improve the quality of, and control contamination in our manufacturing processes, we
will lose our ability to remain competitive.
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An industry trend towards glass-based applications could negatively impact our ability to remain
competitive.
  If we do not protect our patents and other intellectual property rights, our net sales could
suffer.
  We may face intellectual property infringement claims that are costly to resolve, may divert our
managements attention, and may negatively impact our business and operating results.
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Historical quarterly results may not accurately predict our performance due to a number of
uncertainties and market factors, and as a result it is difficult to predict our future results.
  
    
    timing of significant orders, or order cancellations;
    
    changes in our product mix and average selling prices;
    
    modified, adjusted, or rescheduled shipments;
    
    actions by our competitors, including announcements of new products or technological innovations;
    
    availability of disks versus demand for disks;
    
    the cyclical nature of the disk drive industry;
    
    our ability to develop and implement new and efficient manufacturing process technologies;
    
    increases in our production and engineering costs associated with initial design and
production of new product programs;
    
    availability and price of key materials;
    
    our ability to execute future product development and production ramps effectively;
    
    fluctuations in exchange rates, particularly between the US dollar and the Malaysian ringgit;
    
    the ability of our process equipment to meet more stringent future product requirements;
    
    our ability to introduce new products that achieve cost-effective high-volume
production in a timely manner, timing of product announcements, and market acceptance of
new products;
    
    the availability of our production capacity, and the extent to which we can use that
capacity;
    
    changes in our manufacturing efficiencies, in particular product yields and input
costs for direct materials, operating supplies and other running costs;
    
    prolonged disruptions of operations at any of our facilities for any reason;
    
    changes in the cost of or limitations on availability of labor;
    
    structural changes within the disk industry, including combinations, failures, and
joint venture arrangements; and
    
    changes in tax regulations in foreign jurisdictions that could potentially reduce our
tax incentives in areas such as Malaysian capital allowances, tax holidays, and exemptions
on withholding tax on royalty payments made by our Malaysian operations to our subsidiary
in the Netherlands.
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If we make unprofitable acquisitions or are unable to successfully integrate future acquisitions,
our business could suffer.
  
    
    difficulties in integrating the operations, technologies, products and personnel
of the acquired companies, especially given the specialized nature of our technology;
    
    diversion of managements attention from normal daily operations of the business;
    
    potential difficulties in completing projects associated with in-process research and development;
    
    initial dependence on unfamiliar supply chains or relatively small supply partners; and
    
    the potential loss of key employees of the acquired companies.
  
    
    issue stock that would dilute our current stockholders percentage ownership;
    
    assume liabilities;
    
    record goodwill and non-amortizable intangible assets that will be subject to
impairment testing and potential periodic impairment charges;
    
    incur amortization expenses related to certain intangible assets;
    
    incur large and immediate write-offs; or
    
    become subject to litigation.
  The nature of our operations makes us susceptible to material environmental liabilities, which
could result in significant compliance and clean-up expenses and adversely affect our financial
condition.
  
    
    the use, storage, discharge, and disposal of hazardous materials used during
our manufacturing process;
    
    the treatment of water used in our manufacturing process; and
    
    air quality management.
  32




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
    
    we could be subject to significant penalties;
    
    our ability to expand or operate in California or Malaysia could be restricted;
    
    our ability to establish additional operations in other locations could be restricted; or
    
    we could be required to obtain costly equipment or incur significant expenses
to comply with environmental regulations.
  From time to time, we may have to defend against lawsuits in connection with the operation of our
business.
  Earthquakes, tsunamis or other natural or man-made disasters could disrupt our operations.
  Terrorist attacks may adversely affect our business and operating results.
  33




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Compliance with the rules and regulations concerning corporate governance may be costly,
time-consuming, and difficult to achieve, which could harm our operating results and business.
   In the future, we may need additional capital, which may not be available on favorable terms, or at
all.
  
    
    the rate of our sales growth;
    
    the level of our profits or losses;
    
    the timing and extent of our spending to increase inventories to support our
transition to PMR products, support facilities upgrades and product development
efforts;
    
    the timing and size of business or technology acquisitions;
    
    the timing of introductions of new products and enhancements to our existing products; and
    
    the length of product life cycles.
  Anti-takeover provisions in our certificate of incorporation could discourage potential acquisition
proposals or delay or prevent a change of control.
  34




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Risks Related to our Indebtedness
 We are leveraged, and our debt obligations will continue to make us vulnerable to economic
downturns.
  We are dependent on cash flow from our subsidiaries to meet our obligations.
  The assets of our subsidiaries may not be available to make payments on our debt obligations.
  35




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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
  TotalNumber ofShares
    
    
    Maximum NumberPurchased
    
    
    (or Approximateas Part of
    
    
    Dollar Value)Total
    
    
    Average
    
    
    Publicly
    
    
    of SharesNumber of
    
    
    Price
    
    
    Announced
    
    
    that May Yet BeShares
    
    
    Paid per
    
    
    Plans or
    
    
    Purchased under thePeriod
    
    Purchased (1)
    
    
    Share
    
    
    Programs
    
    
    Plans or ProgramsJanuary 1 to January 28
    
    
    23,498
    
    
    $
    36.37
    
    
    
    
    
    
    
    January 29 to February 25
    
    
    20,521
    
    
    $
    32.10
    
    
    
    
    
    
    
    February 26 to April 1
    
    
    3,826,687
    
    
    $
    32.76
    
    
    
    3,815,000
    
    
    $
    75,020,600Total
    
    
    3,870,706
    
    
    $
    32.78
    
    
    
    3,815,000
    
    
    $
    75,020,600
 
 (1)
    
    Includes shares repurchased from certain of our officers pursuant to net share tax settlement
transactions upon the vesting of shares of restricted common stock held by such officers as well as
stock repurchased under the authorized stock repurchase program. 36




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ITEM 6. Exhibits
 10.1
    
    Agreement dated January 1, 2007 by and between Williams Advanced Materials,
Incorporated and Komag, Incorporated.*10.2
    
    Amendment No. 1 to Media Supply Agreement dated February 23, 2007 between Komag USA
(Malaysia) Sdn. and Komag, Incorporated and Seagate Technology International.*10.3
    
    Substrate Product Supply Agreement dated February 23, 2007 between Komag USA
(Malaysia) Sdn. and Komag, Incorporated and Seagate Technology International.*10.4
    
    Form of Indenture by and between Komag, Incorporated and U.S. Bank National
Association, as Trustee (incorporated by reference to Exhibit 10.19 filed with the
Companys Form 8-K on March 28, 2007)31.1
    
    Rule 13a  14 (a) Certification of Chief Executive Officer31.2
    
    Rule 13a  14 (a) Certification of Chief Financial Officer32
    
    Section 1350 Certification of Chief Executive Officer and Chief Financial Officer,
furnished herewith
 
 *
    
    Confidential treatment has been requested with respect to portions of this exhibit. Omitted
portions have been filed separately with the Securities and Exchange Commission. 37




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##### Table of Contents



SIGNATURES
  KOMAG, INCORPORATED(Registrant)DATE: May 4, 2007
    
    BY:
    
    /s/ Timothy D. HarrisTimothy D. HarrisChief Executive OfficerKomag, IncorporatedDATE: May 4, 2007
    
    BY:
    
    /s/ Kathleen A. BaylessKathleen A. BaylessExecutive Vice President, Chief Financial OfficerKomag, Incorporated
 38




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EXHIBIT INDEX
 10.1
    
    Agreement dated January 1, 2007 by and between Williams Advanced Materials,
Incorporated and Komag, Incorporated.*10.2
    
    Amendment No. 1 to Media Supply Agreement dated February 23, 2007 between Komag USA
(Malaysia) Sdn. and Komag, Incorporated and Seagate Technology International.*10.3
    
    Substrate Product Supply Agreement dated February 23, 2007 between Komag USA
(Malaysia) Sdn. and Komag, Incorporated and Seagate Technology International.*10.4
    
    Form of Indenture by and between Komag, Incorporated and U.S. Bank National
Association, as Trustee (incorporated by reference to Exhibit 10.19 filed with the
Companys Form 8-K on March 28, 2007)31.1
    
    Rule 13a  14 (a) Certification of Chief Executive Officer31.2
    
    Rule 13a  14 (a) Certification of Chief Financial Officer32
    
    Section 1350 Certification of Chief Executive Officer and Chief Financial Officer,
furnished herewith
 
 *
    
    Confidential treatment has been requested with respect to portions of this exhibit. Omitted
portions have been filed separately with the Securities and Exchange Commission. 39