UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Western Digital Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware		001-08703		33-0956711
(State or Other Jurisdiction of		(Commission File Number)		(I.R.S. Employer Identification No.)
Incorporation or Organization)

20511 Lake Forest Drive
Lake Forest, California		92630
(Address of Principal Executive Offices)		(Zip Code)

(949) 672-7000
(Registrant’s Telephone Number, Including Area Code)

Not applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition.

     On July 24, 2008, Western Digital Corporation (“Western Digital”) announced financial results for the fourth fiscal quarter and fiscal year ended June 27, 2008. A copy of the press release making this announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference. A copy of Western Digital’s Investor Information Summary for the fiscal quarter ended June 27, 2008 is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

     In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	99.1		Press Release issued by Western Digital Corporation on July 24, 2008 announcing financial results for the fourth fiscal quarter and fiscal year ended June 27, 2008.
	99.2		Fourth Quarter Fiscal Year 2008 Western Digital Corporation Investor Information Summary.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				Western Digital Corporation
				(Registrant)
		By:		/s/ Raymond M. Bukaty
Date: July 24, 2008				Raymond M. Bukaty
				Senior Vice President, Administration,
				General Counsel and Secretary

Exhibit Index

Exhibit Number		Description
99.1		Press Release issued by Western Digital Corporation on July 24, 2008 announcing financial results for the fourth fiscal quarter and fiscal year ended June 27, 2008.
99.2		Fourth Quarter Fiscal Year 2008 Western Digital Corporation Investor Information Summary.

Exhibit 99.1

Company contacts:
Bob Blair
Investor Relations
949.672.7834
robert.blair@wdc.com

Steve Shattuck
Public Relations
949.672.7817
steve.shattuck@wdc.com

FOR IMMEDIATE RELEASE:

WD ANNOUNCES Q4 REVENUE OF $2.0 BILLION
AND NET INCOME OF 94 CENTS PER SHARE

Full-year Revenue Totals $8.1 Billion, up 48 Percent,
Net Income of $3.84 Per Share, up 54 Percent

LAKE FOREST, Calif. — Jul. 24, 2008 — Demonstrating strong year-over-year performance, Western Digital Corp. (NYSE: WDC) today reported financial results for its fiscal year 2008 and fourth quarter ended June 27, 2008.

     The company posted revenue of $8.1 billion and operating income of $1.0 billion for fiscal year 2008. Net income was $867 million, or $3.84 per share, compared to $564 million, or $2.50 per share for the prior year. The 2008 net income amount included net charges of $75 million for taxes related to the license of intellectual property to subsidiaries and $49 million for acquired in-process research and development. The 2007 net income amount included an income tax benefit of $126 million related to adjustments to the value of the company’s deferred tax assets.

     These fiscal-year results represented increases in revenue of 48 percent, compared with the prior year’s $5.5 billion, and unit growth of 38 percent, from 96.5 million in 2007 to

WD Announces Q4 Revenue of $2.0 Billion
and Net Income of 94 Cents Per Share
Page 2

133.3 million in 2008. The company grew its hard drive revenue contribution from non-desktop PC markets to 56 percent from 43 percent in the prior year.

     For the fourth quarter, revenue totaled $2.0 billion on shipments of approximately 35.2 million units, with operating income of $241 million and net income of $213 million, or $0.94 per share. The fourth quarter net income amount includes a $15 million incremental tax charge related to the license of intellectual property to subsidiaries.

     The June quarter results also represented strong year-over-year performance, including growth in revenue and unit shipments of 46 percent and 41 percent, respectively. In the year-ago quarter, the company reported revenue of $1.4 billion, unit shipments of 24.9 million, operating income of $79 million and net income of $212 million, or $0.94 per share. Net income in the year-ago period included a $126 million tax benefit reflecting a favorable adjustment to the valuation allowance of the company’s deferred tax assets.

     Sixty-three percent of Q4 revenue was derived from non-desktop sources, while 37 percent came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 46 percent non-desktop sources versus 54 percent desktop PC revenue.

     The company shipped 11.7 million 2.5-inch mobile drives and 4.1 million 3.5-inch units for the PVR/DVR market in the fourth quarter, sequential quarterly increases of 15 percent and 32 percent, respectively, and year-over-year increases of 208 percent and 52 percent, respectively. Branded product revenue of $386 million for the quarter increased 17 percent sequentially and 68 percent year-over-year. The company also continued to grow its shipments

WD Announces Q4 Revenue of $2.0 Billion
and Net Income of 94 Cents Per Share
Page 3

of enterprise-class Serial ATA drives and hard drives featuring its unique GreenPower^™ technology into the desktop, enterprise and consumer electronics markets.

     The company generated $318 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $1.1 billion.

     “Fiscal 2008 was an outstanding year for WD, capped off with the strong fourth-quarter financial performance,” said John Coyne, president and chief executive officer. “Our outstanding financial performance demonstrates the efficiency and effectiveness of the business model that we have built and refined over the last several years, underpinned by our industry–leading cost structure. Customer satisfaction with WD’s broad product line, high quality and reliability, service excellence and overall value proposition continues to drive our profitable growth.”

     Coyne also noted that the company’s integration of the Komag acquisition—announced just over one year ago and closed in September, 2007—was complete and that its new media operation was already generating solid technology and cost contributions to the overall business.

     The investment community conference call to discuss these results and the company’s outlook will be broadcast live over the Internet today at 2 p.m. PDT/5 p.m. EDT. The call will be accessible live and on an archived basis via the link below:

Audio Webcast:		www.westerndigital.com/investor
		Click on “Conference Calls”
Telephone Replay:		866-365-4129 (toll-free)
		+1-203-369-0222 (international)

About WD

WD Announces Q4 Revenue of $2.0 Billion
and Net Income of 94 Cents Per Share
Page 4

     WD, one of the storage industry’s pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company produces reliable, high-performance hard drives that keep users’ data accessible and secure from loss. WD applies its storage expertise to consumer products for external, portable and shared storage applications.

     WD was founded in 1970. The company’s storage products are marketed to leading systems manufacturers, selected resellers and retailers under the Western Digital and WD brand names. Visit the Investor section of the company’s Web site (www.westerndigital.com) to access a variety of financial and investor information.

     This press release contains forward-looking statements concerning WD’s financial and operational performance, WD’s business model, cost structure and customer satisfaction, and the impacts of the integration of WD’s media operations. These forward-looking statements are based on WD’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: supply and demand conditions in the hard drive industry; actions by competitors; unexpected advances in competing technologies; uncertainties related to the development and introduction of products based on new technologies and expansion into new hard drive markets; business conditions and growth in the various hard drive markets; pricing trends and fluctuations in average selling prices; failure to continue to effectively integrate WD’s media and head technologies; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; negative impacts of the conditions in the global credit markets on

WD Announces Q4 Revenue of $2.0 Billion
and Net Income of 94 Cents Per Share
Page 5

WD’s investment portfolio; and other risks and uncertainties listed in WD’s recent Form 10-Q filed with the SEC on May 6, 2008, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and WD undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

###

Western Digital, WD, and the WD logo are registered trademarks of Western Digital Technologies, Inc. in the U.S. and other countries.

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions; unaudited)

		Jun. 27,				Jun. 29,
		2008				2007
ASSETS
Current assets:
Cash and cash equivalents		$	1,104			$	700
Short-term investments			3				207
Accounts receivable, net			1,010				697
Inventories			456				259
Other			158				166
Total current assets			2,731				2,029
Property and equipment, net			1,668				741
Deferred taxes, goodwill and other, net			472				131
Total assets		$	4,871			$	2,901
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,181			$	882
Accrued expenses			262				163
Accrued warranty			90				73
Current portion of long-term debt			27				12
Total current liabilities			1,560				1,130
Long-term debt			482				10
Other liabilities			133				45
Total liabilities			2,175				1,185
Shareholders’ equity			2,696				1,716
Total liabilities and shareholders’ equity		$	4,871			$	2,901

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts)
(unaudited)

		Three Months Ended												Years Ended
		Jun. 27,				Mar. 28,				Jun. 29,				Jun. 27,				Jun 29,
		2008				2008				2007				2008				2007
Revenue, net		$	1,993			$	2,111			$	1,367			$	8,074			$	5,468
Cost of revenue			1,568				1,634				1,162				6,335				4,568
Gross margin			425				477				205				1,739				900
Operating expenses:
Research and development			128				123				79				464				306
Selling, general and administrative			56				56				47				220				179
Acquired in-process research and development			—				—				—				49				—
Total operating expenses			184				179				126				733				485
Operating income			241				298				79				1,006				415
Net interest and other			(4	)			(8	)			7				(25	)			28
Income before income taxes			237				290				86				981				443
Income tax provision (benefit)			24				10				(126	)			114				(121	)
Net income		$	213			$	280			$	212			$	867			$	564
Net income per common share:
Basic		$	0.96			$	1.26			$	0.97			$	3.92			$	2.57
Diluted		$	0.94			$	1.23			$	0.94			$	3.84			$	2.50
Common shares used in computing per share amounts:
Basic			222				222				219				221				219
Diluted			227				227				225				226				226

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

		Three Months Ended								Years Ended
		Jun. 27,				Jun 29,				Jun 27,				Jun 29,
		2008				2007				2008				2007
Cash flows from operating activities
Net income		$	213			$	212			$	867			$	564
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization			113				61				413				210
In-process research and development			—				—				49				—
Deferred income taxes			24				(126	)			101				(126	)
Stock-based compensation			10				14				37				48
Loss on investments			2				—				13				—
Changes in operating assets and liabilities			(44	)			(7	)			8				(78	)
Net cash provided by operating activities			318				154				1,488				618
Cash flows from investing activities
Acquisitions, net of cash acquired			(2	)			—				(927	)			—
Capital expenditures			(146	)			(85	)			(615	)			(324	)
Investments, net			—				(36	)			221				(59	)
Net cash used in investing activities			(148	)			(121	)			(1,321	)			(383	)
Cash flows from financing activities
Acquisition-related debt, net			—				—				250				—
Issuance of common stock under employee plans			21				13				60				30
Repurchase of common stock			—				(45	)			(60	)			(73	)
Repayment of long-term debt			(4	)			(5	)			(13	)			(43	)
Net cash provided by (used in) financing activities			17				(37	)			237				(86	)
Net increase (decrease) in cash and cash equivalents			187				(4	)			404				149
Cash and cash equivalents, beginning of period			917				704				700				551
Cash and cash equivalents, end of period		$	1,104			$	700			$	1,104			$	700

Exhibit 99.2

WESTERN DIGITAL CORPORATION
INVESTOR INFORMATION SUMMARY
Q4 FY2008 (All amounts in millions, except ASPs and headcount)

				Q4 FY07					Q1 FY08					Q2 FY08					Q3 FY08					Q4 FY08
	HARD DRIVE UNITS:				24.9					29.4					34.2					34.5					35.2
	REVENUE1:			$	1,367				$	1,766				$	2,204				$	2,111				$	1,993
	HARD DRIVE AVERAGE SELLING PRICE:			$	55				$	59				$	61				$	59				$	56
	GROSS MARGIN %:				15.0	%				18.3	%				23.3	%				22.6	%				21.3	%
	REVENUE BY CHANNEL (HDD ONLY):
	OEM				47	%				50	%				48	%				50	%				57	%
	DISTRIBUTORS				36	%				31	%				34	%				34	%				24	%
	RETAIL				17	%				19	%				18	%				16	%				19	%
	REVENUE BY GEOGRAPHY (HDD ONLY):
	AMERICAS				40	%				34	%				32	%				28	%				29	%
	EUROPE				26	%				33	%				32	%				31	%				25	%
	ASIA				34	%				33	%				36	%				41	%				46	%
	REVENUE CONCENTRATION (HDD ONLY):
	10 LARGEST CUSTOMERS				48	%				46	%				47	%				48	%				53	%
	WORLDWIDE HEADCOUNT:				29,572					41,263					42,534					41,876					50,072
	CASH RELATED INFORMATION:
	CASH FLOW FROM OPERATIONS			$	154				$	219				$	519				$	431				$	318
	CAPITAL EXPENDITURES			$	85				$	163				$	169				$	137				$	146
	DEPRECIATION AND AMORTIZATION			$	61				$	78				$	111				$	111				$	113
	DAYS SALES OUTSTANDING				46					51					45					44					46
	INVENTORY METRICS:
	RAW MATERIALS			$	12				$	165				$	171				$	153					144
	WORK IN PROCESS				94					145					131					131					145
	FINISHED GOODS				153					151					157					171					167
	TOTAL INVENTORY, NET			$	259				$	461				$	459				$	455				$	456
	INVENTORY TURNS				18					13					15					14					14