1 ============================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------------------------- FORM 11-K [X] Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the fiscal year ended June 30, 1996 OR [ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from _____ to _____ Commission File Number 1-8703 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: WESTERN DIGITAL CORPORATION 8105 Irvine Center Drive Irvine, California 92618 2 INTRODUCTION Western Digital Corporation (the "Company") has established the Western Digital Corporation Savings and Profit Sharing Plan (the "Plan"). The Plan is a cash or deferred arrangement plan intended to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended. REQUIRED INFORMATION I. Financial Statements: These statements are listed in the Index to the Financial Statements. II. Exhibits: Consent of Independent Auditors. 2 3 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized. WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN Date: December 23, 1996 By: /s/ DUSTON M. WILLIAMS ----------------- ---------------------- Duston M. Williams Chairman of the Retirement Plan Committee 3 4 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Schedules of Prohibited Transactions, Obligations in Default and Leases in Default are not included herein because there were no such transactions during the period. 4
Page ---- Independent Auditors' Report.......................................................... 5 Statements of Net Assets Available for Plan Benefits as of June 30, 1996 and 1995..... 6 Statements of Changes in Net Assets Available for Plan Benefits for the years ended June 30, 1996 and 1995.............................................................. 7 Notes to Financial Statements......................................................... 8-17 Schedule I -- Item 27a -- Schedule of Assets Held for Investment Purposes............. 18 Schedule II -- Item 27d -- Schedule of Reportable Transactions........................ 19 5 INDEPENDENT AUDITORS' REPORT Retirement Plan Committee Western Digital Corporation Savings and Profit Sharing Plan: We have audited the accompanying statements of net assets available for plan benefits of the Western Digital Corporation Savings and Profit Sharing Plan (the "Plan") as of June 30, 1996 and 1995 and the related statements of changes in net assets available for plan benefits for the years then ended, as listed in the accompanying index. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Western Digital Corporation Savings and Profit Sharing Plan as of June 30, 1996 and 1995, and the changes in net assets available for plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedules of Assets Held for Investment Purposes and Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG PEAT MARWICK LLP Orange County, California November 27, 1996 5 6 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (IN THOUSANDS) The accompanying notes are an integral part of these financial statements. 6
June 30, --------------------- 1996 1995 ------- ------- Assets Investments, at current value: (Notes 1, 2, 4 and 5) Debt and equity securities ........................... $83,530 $58,290 Participant loans .................................... 3,898 2,684 ------- ------- Total investments ............................... 87,428 60,974 Cash and cash equivalents ................................. 17 -- Receivables (Notes 2 and 3) Participants' contributions .......................... 497 1,214 Employer's contribution .............................. 167 390 Employer's profit sharing contribution ............... 4,552 5,810 ------- ------- Total assets .................................... $92,661 $68,388 ======= ======= Net assets available for Plan benefits: Available to terminated participants ................. $23,113 $ 7,367 Available to continuing participants ................. 69,548 61,021 ------- ------- Net assets available for Plan benefits .......... $92,661 $68,388 ======= ======= 7 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (IN THOUSANDS) The accompanying notes are an integral part of these financial statements. 7
Year ended June 30, ---------------------- 1996 1995 ------- ------- Additions to net assets: Participants' contributions .................... $10,447 $ 8,197 Employer's contributions ....................... 2,460 2,263 Employer's profit sharing contributions ........ 4,552 5,810 Interest and dividend income ................... 7,689 1,800 Realized/unrealized gain ....................... 4,269 7,396 ------- ------- Total additions ........................... 29,417 25,466 Deductions from net assets: Participant distributions paid ................. 5,144 3,123 ------- ------- Increase in net assets available for Plan benefits ..................... 24,273 22,343 Net assets available for Plan benefits at beginning of year ............................ 68,388 46,045 ------- ------- Net assets available for Plan benefits at end of year .................................. $92,661 $68,388 ======= ======= 8 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Western Digital Corporation Savings and Profit Sharing Plan (the "Plan") have been prepared on an accrual basis of accounting and present the net assets available for Plan benefits as of June 30, 1996 and 1995 and changes in net assets available for Plan benefits for the years ended June 30, 1996 and 1995. Valuation of Investments Investments in marketable securities and common stock traded on national security exchanges are valued at current market values, determined through reference to public market information on the last business day of the Plan's fiscal year. Securities not traded on the last business day are valued at the last reported bid price. At June 30, 1996 and 1995, the Plan held investments in mutual funds, which are reported at fair market value. Cash and cash equivalents are valued at cost plus accrued interest which approximates market. Participant loans are carried at their contract value which approximates fair market value. Income Tax Status The Internal Revenue Service ("IRS") is currently reviewing the Plan's application for a determination letter. However, the Company believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, it believes that the Plan was qualified and the trust was tax-exempt as of June 30, 1996. (2) DESCRIPTION OF THE PLAN General The Plan is a defined contribution plan as defined by the Employee Retirement Income Security Act of 1974. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Contributions All U.S. based employees of the Company are eligible to participate in the Plan and to receive employer matching contributions. Eligible employees may elect to contribute up to 14% of their compensation on a pretax basis and 9% of their compensation on an after tax basis (with an aggregate limit of 14%) for investment in eleven funds, provided that contributions do not exceed IRS limitations. The Company may make contributions equal to 50% of pretax participant contributions to the Plan, which are limited to 5% of the participant's compensation. The Company may also make additional contributions at its discretion. The Company may suspend matching contributions when it does not have sufficient net profits to make the applicable matching contribution. Contributions to the Plan are recorded as soon as administratively possible after the Company makes payroll deductions from Plan participants. 8 9 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Investments Participants designate their contributions, and those made by the Company, for investment in any or all of the following funds: Fund Investment Strategy ---- ------------------- Puritan Fund The Puritan Fund purchases shares in the Fidelity Puritan Mutual Fund, which invests primarily in common stock, preferred stock and bonds of corporations with an emphasis on growth. Disciplined The Disciplined Equity Fund purchases shares in Equity Fund the Fidelity Disciplined Equity Mutual Fund, which invests primarily in domestic common stocks that are considered undervalued compared to industry norms. Blue Chip Fund The Blue Chip Fund purchases shares in the Fidelity Blue Chip Mutual Fund, which invests primarily in common stock of well-known and established companies. Magellan Fund The Magellan Fund purchases shares in the Fidelity Magellan Mutual Fund, which invests primarily in common stock and securities convertible into common stock of corporations with an emphasis on capital appreciation. Stable Value Fund The Stable Value Fund purchases shares in the T. Rowe Price Stable Value Mutual Fund, which invests primarily in guaranteed investment contracts ("GICs"), bank investment contracts ("BICs") and structured investment contracts ("SICs"). Western Digital The Western Digital Common Stock Fund invests in Common Stock Fund the Company's common stock. International The International Stock Fund purchases shares in Stock Fund the T. Rowe Price International Stock Mutual Fund, which invests primarily in common stock of well-established, non-U.S. corporations. Small-Cap Value The Small-Cap Value Fund purchases shares in the Fund T. Rowe Price Small-Cap Value Mutual Fund, which invests primarily in common stock of corporations with a market value of $500 million or less that appear undervalued compared to industry norms. Science & The Science and Technology Fund purchases shares Technology Fund in the T. Rowe Price Science and Technology Mutual Fund, which invests primarily in common stock of companies expected to benefit from the development, advancement, and use of science and technology. 9 10 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN Notes to Financial Statements (continued) Fund Investment Strategy ---- ------------------- Equity Income Fund The Equity Income Fund purchases shares in the T. Rowe Price Equity Income Mutual Fund, which invests primarily in dividend-paying common stock, particularly of established companies with favorable prospects for both increasing dividends and capital appreciation. Spectrum Income The Spectrum Income Fund purchases shares in the Fund T. Rowe Price Spectrum Income Mutual Fund, which invests primarily in a diversified group of T. Rowe Price mutual funds which, in turn, invest principally in fixed income securities. As of June 30, 1996, all of the Plan's assets were invested in mutual funds, Western Digital common stock, cash and cash equivalents or participant loans. Participants may transfer all or a portion of the balance in their accounts between investment funds on a daily basis. Change in Trustee On June 1, 1995, T. Rowe Price Trust Company ("TRP") replaced First Interstate Bank ("FIB") as trustee of the Plan's assets and all of the Plan's assets were transferred to TRP. On the same day, the Fixed Interest Fund was closed and all of the Fund's assets were transferred to the Stable Value Fund. In addition, seven new mutual fund options were offered by the Plan, increasing the participants' investment options to eleven. No interfund transfers were allowed from June 1, 1995 through July 5, 1995. Employee and employer contributions for the month of June and employer profit sharing contributions were received by TRP after July 5, 1995 and were invested in any or all of the eleven remaining investment options in accordance with the participants' elections. These amounts are reflected as receivables in the statement of net assets available for Plan benefits at June 30, 1995. Participant Loans Loans can be made to a participant up to an amount equal to the lesser of $50,000 or 50% of a participant's vested account balance. The loans bear interest at 1% above the current prime rate published by T. Rowe Price Trust Company and are generally payable in installments over periods ranging from one to five years, unless the loan is used for the purchase of a primary residence, in which case the repayment period may be up to ten years. Principal and interest payments are allocated to the participants' accounts in the same manner as their current contributions. The Plan allows participants to have no more than two active loans at a time. The annual interest rate charged on employee loans during 1996 ranged from 7% to 10%. 10 11 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Participant Accounts A separate account is maintained for each participant in each designated fund. Each account is adjusted for contributions and net investment income or loss on a daily basis. Net investment income or loss is allocated to the accounts in the same proportion as the participant's beginning account balance invested in the fund (as defined in the Plan) bears to the total of all participants' beginning account balances invested in the fund. Payment of Benefits Upon termination, participants may receive a lump-sum payment in cash and/or shares of the Company's common stock. The nonvested portion of terminated participants' accounts is forfeited subject to a five-year reinstatement period. Forfeitures are allocated annually to remaining participants in the same ratio as each participant's compensation for the plan year bears to the total compensation for the plan year of all participants eligible to share in the allocation. Certain restrictions apply to withdrawals of amounts from the Plan while a participant continues to be employed by the Company. Vesting Participants are at all times one hundred percent vested in the value of their voluntary contributions. A participant is fully vested in the Company's matching contributions and earnings thereon after five years of service (as defined in the Plan), or upon retirement (at normal retirement age), permanent disability or death. For information concerning the vesting of employer profit sharing contributions, see Note 3. The Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants will become fully vested in their accounts. Administration of the Plan The Retirement Plan Committee (the "Committee"), appointed by the Board of Directors and consisting of at least three members, has the authority to control and manage the operation and administration of the Plan. The assets of the Plan are held in a non-discretionary trust by T. Rowe Price Trust Company as trustee and are administered under a trust agreement which requires that the trustee hold, administer and distribute the funds of the Plan in accordance with the text of the Plan and the instructions of the Committee or its designees. The compensation or fees of accountants, counsel and other specialists and any other costs of administering the Plan or the trust are paid by the Company or charged to the trust at the discretion of the Company. (3) PROFIT SHARING FEATURE The Company adopted an annual profit sharing feature effective beginning with the Company's 1992 fiscal year. All eligible domestic employees of the Company who are employed on the last day of the Company's fiscal year are eligible to participate in the profit sharing. The amount of profit sharing paid to participants is dependent upon their eligible compensation earned during the fiscal year. A portion of each eligible participant's allocation of the Company's profit sharing contribution is deposited into an individual profit sharing account established under the Plan (4.7% and 6% of eligible fiscal year compensation in 1996 and 1995, respectively) and the excess allocable to such participant, if any, is paid as a fiscal year-end cash bonus. Beginning on June 1, 1995, participants became one hundred percent vested in their profit sharing accounts. Prior to June 1, 1995, a participant became fully vested in the Company's profit sharing contributions and earnings thereon after five years of service (as defined in the Plan), or upon 11 12 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) retirement (at normal retirement age), permanent disability or death. Benefits are generally payable following retirement, disability, death, hardship or termination of employment. During 1996 and 1995, the Company authorized 6.5% and 8%, respectively, of defined pre-tax profits to be allocated to the participants. In 1996 and 1995, the Company contributed $4,552,101 and $5,810,379, respectively, as profit sharing to the Plan. (4) INVESTMENTS The Plan's investments consist of the following at June 30, 1996 (in thousands): 12
Shares Current Held Cost Value ------ ------- ------- Puritan Fund: Fidelity Puritan Mutual Fund......................... 759 $12,432 $13,421 Disciplined Equity Fund: T. Rowe Price Disciplined Equity Mutual Fund......... 34 752 754 Blue Chip Fund: Fidelity Blue Chip Mutual Fund....................... 69 2,192 2,227 Magellan Fund: Fidelity Magellan Mutual Fund........................ 306 24,237 22,910 Stable Value Fund: T. Rowe Price Stable Value Mutual Fund............... 18,788 18,788 18,788 Western Digital Common Stock Fund....................... 478 6,359 12,484 International Stock Fund: T. Rowe Price International Stock Mutual Fund........ 99 1,245 1,324 Small-Cap Value Fund: T. Rowe Price Small-Cap Value Mutual Fund............ 110 1,909 2,040 Science & Technology Fund: T. Rowe Price Science & Technology Mutual Fund....... 192 5,969 5,907 Equity Income Fund: T. Rowe Price Equity Income Mutual Fund.............. 151 2,966 3,190 Spectrum Income Fund: T. Rowe Price Spectrum Income Mutual Fund............ 44 488 485 Western Digital Participant Loans....................... -- 3,898 3,898 ------- ------- $81,235 $87,428 ======= ======= 13 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Plan's investments consist of the following at June 30, 1995 (in thousands): 13
Shares Current Held Cost Value ------ ------- ------- Puritan Fund: Fidelity Puritan Mutual Fund................. 716 $11,006 $11,570 Magellan Fund: Fidelity Magellan Mutual Fund................ 238 16,065 19,878 Stable Value Fund: T. Rowe Price Stable Value Mutual Fund....... 18,109 18,109 18,109 Western Digital Common Stock Fund............... 499 4,417 8,733 Western Digital Participant Loans............... -- 2,684 2,684 ------- ------- $52,281 $60,974 ======= ======= 14 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) (5) NET ASSETS AND CHANGES IN NET ASSETS BY FUND The net assets at June 30, 1996 and 1995 and changes in net assets for the years ended June 30, 1996 and 1995, allocated to the separate investment funds are shown below. Net assets available for Plan benefits by fund (in thousands):
June 30, 1996 ------------------------------------------------------------------------------------------ Disci- Western Inter- plined Blue Stable Digital national Puritan Equity Chip Magellan Value Common Stock Fund Fund Fund Fund Fund Stock Fund Fund -------- -------- -------- -------- -------- -------- -------- Assets Investments, at current value.... $ 13,421 $ 754 $ 2,227 $ 22,910 $ 18,788 $ 12,484 $ 1,324 Cash and cash equivalents........ -- -- 2 -- 2 -- 7 Receivables Participants' contributions..... 78 7 29 119 93 43 14 Employer's contribution......... 27 2 9 40 33 15 5 Employer's profit sharing contribution.................. 611 51 190 921 1,434 424 93 -------- -------- -------- -------- -------- -------- -------- 14,137 814 2,457 23,990 20,350 12,966 1,443 Interfund receivable(payable).... (14) (1) (4) (21) 71 (9) (3) -------- -------- -------- -------- -------- -------- -------- Net assets available for Plan benefits.................... $ 14,123 $ 813 $ 2,453 $ 23,969 $ 20,421 $ 12,957 $ 1,440 ======== ======== ======== ======== ======== ======== ======== 14
June 30, 1996 (continued) ----------------------------------------------------------------------------------- Small-Cap Science & Equity Spectrum Value Technology Income Income Participant Total Fund Fund Fund Fund Loans Plan --------- ---------- ------- -------- ----------- ------- Assets Investments, at current value.... $ 2,040 $ 5,907 $ 3,190 $ 485 $ 3,898 $87,428 Cash and cash equivalents........ -- 6 -- -- -- 17 Receivables Participants' contributions..... 19 61 26 8 -- 497 Employer's contribution......... 6 19 8 3 -- 167 Employer's profit sharing contribution.................. 141 429 190 68 -- 4,552 ------- ------- ------- ------- ------- ------- 2,206 6,422 3,414 564 3,898 92,661 Interfund receivable(payable).... (4) (10) (4) (1) -- -- ------- ------- ------- ------- ------- ------- Net assets available for Plan benefits.................... $ 2,202 $ 6,412 $ 3,410 $ 563 $ 3,898 $92,661 ======= ======= ======= ======= ======= ======= 15 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Net assets available for Plan benefits by fund (in thousands):
June 30, 1995 ---------------------------------------------------------------------------------------- Disci- Western Inter- plined Blue Stable Digital national Puritan Equity Chip Magellan Value Common Stock Fund Fund Fund Fund Fund Stock Fund Fund -------- -------- -------- -------- -------- ---------- -------- Assets Investments, at current value..... $ 11,570 $ -- $ -- $ 19,878 $ 18,109 $ 8,733 $ -- Receivables Participants' contributions...... 277 3 18 380 345 114 6 Employer's contribution.......... 90 1 5 119 113 39 2 Employer's profit sharing contribution................... 1,072 16 75 1,481 2,266 554 29 -------- -------- -------- -------- -------- -------- -------- 13,009 20 98 21,858 20,833 9,440 37 Interfund receivable(payable)..... (6) 1 3 (19) 4 5 1 -------- -------- -------- -------- -------- -------- -------- Net assets available for Plan benefits..................... $ 13,003 $ 21 $ 101 $ 21,839 $ 20,837 $ 9,445 $ 38 ======== ======== ======== ======== ======== ======== ======== 15
June 30, 1996 (continued) ----------------------------------------------------------------------------------- Small-Cap Science & Equity Spectrum Value Technology Income Income Participant Total Fund Fund Fund Fund Loans Plan --------- ---------- ------- -------- ----------- ------- Assets Investments, at current value..... $ -- $ -- $ -- $ -- $ 2,684 $60,974 Receivables Participants' contributions...... 7 42 15 7 -- 1,214 Employer's contribution.......... 2 12 5 2 -- 390 Employer's profit sharing contribution................... 36 176 68 37 -- 5,810 ------- ------- ------- ------- ------- ------- 45 230 88 46 2,684 68,388 Interfund receivable(payable)..... 1 7 2 1 -- -- ------- ------- ------- ------- ------- ------- Net assets available for Plan benefits..................... $ 46 $ 237 $ 90 $ 47 $ 2,684 $68,388 ======= ======= ======= ======= ======= ======= 16 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Changes in net assets available for Plan benefits by fund (in thousands):
Year ended June 30, 1996 --------------------------------------------------------------------------------------- Disci- Western Inter- plined Blue Stable Digital national Puritan Equity Chip Magellan Value Common Stock Fund Fund Fund Fund Fund Stock Fund Fund -------- -------- -------- -------- -------- ---------- -------- Additions to net assets: Participants' contributions............. $ 1,494 $ 255 $ 541 $ 2,488 $ 2,465 $ 788 $ 197 Employer's contributions................ 413 32 103 644 593 233 41 Employer's profit sharing contribution.......................... 611 51 190 921 1,434 424 93 Interest and dividend income............ 721 45 94 4,826 1,104 (3) 16 Realized/unrealized gain (loss)......... 1,127 (1) 31 (2,319) -- 4,987 82 -------- -------- -------- -------- -------- -------- -------- Total additions...................... 4,366 382 959 6,560 5,596 6,429 429 -------- -------- -------- -------- -------- -------- -------- Deductions from net assets: Participant distributions paid.......... 835 19 39 1,641 2,335 853 70 Net forfeitures transferred out (in)............................... 6 2 4 (3) (51) 14 4 -------- -------- -------- -------- -------- -------- -------- Total deductions..................... 841 21 43 1,638 2,284 867 74 -------- -------- -------- -------- -------- -------- -------- Net interfund transfers................... (2,405) 431 1,436 (2,792) (3,728) (2,050) 1,047 -------- -------- -------- -------- -------- -------- -------- Increase (decrease) in net assets available for Plan benefits.......... 1,120 792 2,352 2,130 (416) 3,512 1,402 Net assets available for Plan benefits at: Beginning of year...................... 13,003 21 101 21,839 20,837 9,445 38 -------- -------- -------- -------- -------- -------- -------- End of year............................ $ 14,123 $ 813 $ 2,453 $ 23,969 $ 20,421 $ 12,957 $ 1,440 ======== ======== ======== ======== ======== ======== ======== 16
Year ended June 30, 1996 (continued) -------------------------------------------------------------------------------- Small-Cap Science & Equity Spectrum Value Technology Income Income Participant Total Fund Fund Fund Fund Loans Plan --------- ---------- ------- -------- ----------- ------- Additions to net assets: Participants' contributions............. $ 315 $ 1,104 $ 573 $ 227 $ -- $10,447 Employer's contributions................ 53 222 88 38 -- 2,460 Employer's profit sharing contribution.......................... 141 429 190 68 -- 4,552 Interest and dividend income............ 37 418 116 25 290 7,689 Realized/unrealized gain (loss)......... 145 (24) 243 (2) -- 4,269 ------- ------- ------- ------- ------- ------- Total additions...................... 691 2,149 1,210 356 290 29,417 ------- ------- ------- ------- ------- ------- Deductions from net assets: Participant distributions paid.......... 32 149 80 15 (924) 5,144 Net forfeitures transferred out (in)............................... 5 12 6 1 -- -- ------- ------- ------- ------- ------- ------- Total deductions..................... 37 161 86 16 (924) 5,144 ------- ------- ------- ------- ------- ------- Net interfund transfers................... 1,502 4,187 2,196 176 -- -- ------- ------- ------- ------- ------- ------- Increase (decrease) in net assets available for Plan benefits.......... 2,156 6,175 3,320 516 1,214 24,273 Net assets available for Plan benefits at: Beginning of year...................... 46 237 90 47 2,684 68,388 ------- ------- ------- ------- ------- ------- End of year............................ $ 2,202 $ 6,412 $ 3,410 $ 563 $ 3,898 $92,661 ======= ======= ======= ======= ======= ======= 17 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Changes in net assets available for Plan benefits by fund (in thousands):
Year ended June 30, 1995 ------------------------------------------------------------------------------------- Disci- Western Inter- plined Blue Fixed Stable Digital national Puritan Equity Chip Magellan Interest Value Common Stock Fund Fund Fund Fund Fund Fund Stock Fund Fund -------- ------ ----- -------- -------- ------- ---------- -------- Additions to net assets: Participants' contributions.............. $ 2,064 $ 3 $ 18 $ 2,655 $ 2,098 $ 371 $ 849 $ 6 Employer's contributions................. 568 1 5 725 577 113 239 2 Employer's profit sharing contribution........................... 1,072 16 75 1,481 -- 2,266 554 29 Interest and dividend income............. 669 -- -- 77 817 90 3 -- Realized/unrealized gain................. 515 -- -- 4,441 -- -- 2,371 -- ------- ------ ----- -------- -------- ------- -------- -------- Total additions....................... 4,888 20 98 9,379 3,492 2,840 4,016 37 ------- ------ ----- -------- -------- ------- -------- -------- Deductions from net assets: Participant distributions paid........... 502 -- -- 827 1,116 3 594 -- Net forfeitures transferred out (in)................................ 6 (1) (3) 19 -- (4) (5) (1) ------- ------ ----- -------- -------- ------- -------- -------- Total deductions...................... 508 (1) (3) 846 1,116 (1) 589 (1) ------- ------ ----- -------- -------- ------- -------- -------- Net interfund transfers.................... (891) -- -- (1,278) (14,891) 17,996 (276) -- ------- ------ ----- -------- -------- ------- -------- -------- Increase (decrease) in net assets available for Plan benefits........... 3,489 21 101 7,255 (12,515) 20,837 3,151 38 Net assets available for Plan benefits at: Beginning of year....................... 9,514 -- -- 14,584 12,515 -- 6,294 -- ------- ------ ----- -------- -------- ------- -------- -------- End of year............................. $13,003 $ 21 $ 101 $ 21,839 $ -- $20,837 $ 9,445 $ 38 ======= ====== ===== ======== ======== ======= ======== ======== 17
Year ended June 30, 1995 (continued) ---------------------------------------------------------------------------------- Western Small-Cap Science & Equity Spectrum Digital Value Technology Income Income Bond Participant Main Total Fund Fund Fund Fund Fund Loans Fund Plan --------- ---------- ------ -------- ------- ----------- ------- ------- Additions to net assets: Participants' contributions............... $ 7 $ 42 $ 15 $ 7 $ 62 $ -- $ -- $ 8,197 Employer's contributions.................. 2 12 5 2 12 -- -- 2,263 Employer's profit sharing contribution............................ 36 176 68 37 -- -- -- 5,810 Interest and dividend income.............. -- -- -- -- 37 131 (24) 1,800 Realized/unrealized gain.................. -- -- -- -- 69 -- -- 7,396 ------- ------- ------ ------- ------- ------- ------- ------- Total additions........................ 45 230 88 46 180 131 (24) 25,466 ------- ------- ------ ------- ------- ------- ------- ------- Deductions from net assets: Participant distributions paid............ -- -- -- -- 51 26 4 3,123 Net forfeitures transferred out (in)................................. (1) (7) (2) (1) -- -- -- -- ------- ------- ------ ------- ------- ------- ------- ------- Total deductions....................... (1) (7) (2) (1) 51 26 4 3,123 ------- ------- ------ ------- ------- ------- ------- ------- Net interfund transfers..................... -- -- -- -- (1,162) 515 (13) -- ------- ------- ------ ------- ------- ------- ------- ------- Increase (decrease) in net assets available for Plan benefits............ 46 237 90 47 (1,033) 620 (41) 22,343 Net assets available for Plan benefits at: Beginning of year........................ -- -- -- -- 1,033 2,064 41 46,045 ------- ------- ------ ------- ------- ------- ------- ------- End of year.............................. $ 46 $ 237 $ 90 $ 47 $ -- $ 2,684 $ -- $68,388 ======= ======= ====== ======= ======= ======= ======= ======= 18 SCHEDULE I WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN ITEM 27A -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1996 (IN THOUSANDS) * These entities are considered "parties in interest" under the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 because they either provide services to the Plan or are an employer whose employees are covered by the Plan. See accompanying independent auditors' report. 18
Identity of Issuer, Borrower, Description of Investment, Current Lessor or Similar Party Including Collateral or Par Value Cost Value - ----------------------------- --------------------------------- ------- ------- Fidelity Retirement Services 759 shares Fidelity Puritan Mutual Fund $12,432 $13,421 Fidelity Retirement Services 69 shares Fidelity Blue Chip Mutual Fund 2,192 2,227 Fidelity Retirement Services 306 shares Fidelity Magellan Mutual Fund 24,237 22,910 *T. Rowe Price Trust 34 shares T. Rowe Price Disciplined Company Equity Mutual Fund 752 754 *T. Rowe Price Trust 18,788 shares T. Rowe Price Stable Company Value Mutual Fund 18,788 18,788 *T. Rowe Price Trust 99 shares T. Rowe Price International Company Stock Mutual Fund 1,245 1,324 *T. Rowe Price Trust 110 shares T. Rowe Price Small-Cap Company Value Mutual Fund 1,909 2,040 *T. Rowe Price Trust 192 shares T. Rowe Price Science Company & Technology Mutual Fund 5,969 5,907 *T. Rowe Price Trust 151 shares T. Rowe Price Equity Company Income Mutual Fund 2,966 3,190 *T. Rowe Price Trust 44 shares T. Rowe Price Spectrum Company Income Mutual Fund 488 485 *Western Digital Corporation 478 shares common stock; $.10 par value 6,359 12,484 *Western Digital Corporation Participant Loans 3,898 3,898 ------- ------- $81,235 $87,428 ======= ======= 19 SCHEDULE II WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN ITEM 27D -- SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED JUNE 30, 1996 Transactions in Excess of 5% of Current Value of the Plan's Assets: None See accompanying independent auditors' report. 19
Current Expense Value of Incurred Asset on Identity of Purchase Selling Lease with Cost Transaction Net Party Involved Description of Asset Price Price Rental Transaction of Asset Date Gain - -------------- -------------------- -------- ------- ------ ----------- -------- ----------- ----- Series of Transactions in Excess of 5% of Current Value of the Plan's Assets (in thousands): Fidelity Retirement Fidelity Puritan Mutual Services Fund $ 4,132 -- -- -- $ 4,132 $ 4,132 -- Fidelity Retirement Fidelity Puritan Mutual Services Fund -- 3,408 -- -- 3,244 3,408 164 Fidelity Retirement Fidelity Magellan Mutual Services Fund 10,105 -- -- -- 10,105 10,100 5 Fidelity Retirement Fidelity Magellan Mutual Services Fund -- 4,748 -- -- 4,409 4,748 339 Western Digital Corporation Common Stock 5,873 -- -- -- 5,873 5,857 16 Western Digital Corporation Common Stock -- 7,093 -- -- 4,607 7,093 2,486 T. Rowe Price T. Rowe Price Trust Stable Value Company Mutual Fund 9,068 -- -- -- 9,068 9,068 -- T. Rowe Price T. Rowe Price Trust Stable Value Company Mutual Fund -- 8,364 -- -- 8,364 8,364 -- T. Rowe Price T. Rowe Price Trust Science & Technology Company Mutual Fund 6,741 -- -- -- 6,741 6,741 -- T. Rowe Price T. Rowe Price Trust Science & Technology Company Mutual Fund -- 809 -- -- 764 809 45 T. Rowe Price T. Rowe Price Trust Equity Income Company Mutual Fund 3,324 -- -- -- 3,324 3,324 -- T. Rowe Price T. Rowe Price Trust Equity Income Company Mutual Fund -- 378 -- -- 365 378 13 20 WESTERN DIGITAL CORPORATION SAVINGS AND PROFIT SHARING PLAN INDEX TO EXHIBITS 20
Sequentially Exhibit Description Numbered Page - ------- ----------- ------------- 23. Consent of Independent Auditors 21
1 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS Retirement Plan Committee Western Digital Corporation Savings and Profit Sharing Plan: We consent to the incorporation by reference in the Registration Statement (No. 33-56128) on Form S-8 of Western Digital Corporation Savings and Profit Sharing Plan of our report dated November 27, 1996, relating to the statements of net assets available for plan benefits of Western Digital Corporation Savings and Profit Sharing Plan as of June 30, 1996 and 1995 and the related statements of changes in net assets available for plan benefits for the years ended June 30, 1996 and 1995, which report appears in the June 30, 1996 annual report on Form 11-K of Western Digital Corporation Savings and Profit Sharing Plan. KPMG PEAT MARWICK LLP Orange County, California December 23, 1996 21