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1 ================================================================================ UNITED STATES 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, 1999 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 RETIREMENT 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 Retirement Savings and Profit Sharing Plan (the "Plan"), formerly known as the Western Digital Corporation Savings and Profit Sharing 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 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 RETIREMENT SAVINGS AND PROFIT SHARING PLAN Date: December 17, 1999 By: DUSTON M. WILLIAMS ----------------------------- ----------------------------------- Duston M. Williams Chairman of the Retirement Plan Committee 3

4 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Page ---- Independent Auditors' Report ................................................ 5 Statements of Net Assets Available for Plan Benefits as of June 30, 1998 and 1999............................................. 6 Statements of Changes in Net Assets Available for Plan Benefits for the years ended June 30, 1998 and 1999......................... 7 Notes to Financial Statements............................................. 8-17 Schedule I -- Item 27a -- Schedule of Assets Held for Investment Purposes .............................................. 18 Schedule II -- Item 27b -- Schedule of Loans or Fixed Income Obligations.......................................... 19 Schedule III -- Item 27d -- Schedule of Reportable Transactions.......... 20 All other schedules are omitted because they are not required by Department of Labor regulations or are not applicable. 4

5 INDEPENDENT AUDITORS' REPORT Retirement Plan Committee of the Board of Directors Western Digital Corporation Retirement Savings and Profit Sharing Plan: We have audited the accompanying statements of net assets available for plan benefits of the Western Digital Corporation Retirement Savings and Profit Sharing Plan (the "Plan") as of June 30, 1998 and 1999 and the related statements of changes in net assets available for plan benefits for the years then ended. 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 Retirement Savings and Profit Sharing Plan as of June 30, 1998 and 1999, 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 Schedule of Assets Held for Investment Purposes, Schedule of Loans or Fixed Income Obligations and Schedule of 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 LLP Orange County, California December 7, 1999 5

6 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (IN THOUSANDS) June 30, ------------------------ 1998 1999 -------- -------- Assets Investments, at current value: (Notes 1, 2, 4 and 5) Debt and equity securities ..................... $138,486 $154,407 Participant loans .............................. 5,147 4,692 -------- -------- Total investments ......................... 143,633 159,099 Cash and cash equivalents ........................... 63 113 -------- -------- Total assets .............................. $143,696 $159,212 ======== ======== Net assets available for Plan benefits: Available to terminated participants ........... $ 31,301 $ 58,134 Available to continuing participants ........... 112,395 101,078 -------- -------- Net assets available for Plan benefits..... $143,696 $159,212 ======== ======== The accompanying notes are an integral part of these financial statements. 6

7 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (IN THOUSANDS) Year ended June 30, -------------------------- 1998 1999 --------- -------- Additions to net assets: Participants' contributions ......... $ 13,468 $ 13,501 Employer's contributions ............ 2,880 3,234 --------- -------- Total contributions ............ 16,348 16,735 --------- -------- Interest and dividend income ........ 7,973 8,967 Realized/unrealized gain (loss) ..... (12,638) 3,334 --------- -------- Total investment income (loss) . (4,665) 12,301 --------- -------- Total additions ................ 11,683 29,036 Deductions from net assets: Participant distributions paid ...... 7,424 13,520 --------- -------- Increase in net assets available for Plan benefits .......... 4,259 15,516 Net assets available for Plan benefits at beginning of year .................. 139,437 143,696 --------- -------- Net assets available for Plan benefits at end of year ........................ $ 143,696 $159,212 ========= ======== The accompanying notes are an integral part of these financial statements. 7

8 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 AND 1999 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Western Digital Corporation Retirement Savings and Profit Sharing Plan (the "Plan"), formerly known as the Western Digital Corporation Savings and Profit Sharing Plan, have been prepared on an accrual basis of accounting and present the net assets available for Plan benefits as of June 30, 1998 and 1999 and changes in net assets available for Plan benefits for the years ended June 30, 1998 and 1999. Valuation of Investments Investments in marketable securities and common stock traded on national securities 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, 1998 and 1999, 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 outstanding balance which approximates fair market value. Income Tax Status The Internal Revenue Service has determined and informed Western Digital Corporation (the "Company") by a letter dated January 17, 1997, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the requirements of the IRC. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates. (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 U.S.- based employees of the Company, who meet the Plan's eligibility criteria, 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 12 funds, provided that contributions do not exceed IRS limitations. The Company may make contributions equal to 50% of pretax participant contributions to the Plan, up to the first 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 8

9 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. 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. Blue Chip The Blue Chip Fund purchases shares in the Fidelity Blue Fund 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 The Stable Value Fund purchases shares in the Fund 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 The Western Digital Common Stock Fund invests in Digital the Company's common stock. Common Stock Fund International The International Stock Fund purchases shares in the T. Stock Fund Rowe Price International Stock Stock Fund Mutual Fund, which invests primarily in common stock of well-established, non-U.S. corporations. Small-Cap The Small-Cap Value Fund purchases shares in the Value Fund T. Rowe Price Small-Cap Value Mutual Fund 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 in Technology the T. Rowe Price Science and Technology Fund Technology Fund Mutual Fund, which invests primarily in common stock of companies expected to benefit from the development, advancement, and use of science and technology. Equity Income The Equity Income Fund purchases shares in the T. Rowe Fund 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. 9

10 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Fund Investment Strategy ---- ------------------- Spectrum Income The Spectrum Income Fund purchases shares in the T. Rowe Fund 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. Equity Index Trust The Equity Index Fund purchases shares in the T. Rowe Price Equity Index Trust, which invests in, to the extent practicable, all 500 stocks the Standard & Poor's 500 Stock Index comprises in proportion to their respective weighting in the index. Small Company The Small Company Growth Fund purchases shares in the Growth Fund Warburg Pincus Small Company Growth Portfolio Mutual Fund, which invests primarily in common stock of small-sized domestic corporations. As of June 30, 1999, 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. As of June 30, 1999, the following investments represented greater than 5% of the market value of the Plan's net assets (in thousands): Fund Market Value ---- ------------ Puritan Fund $18,810 Blue Chip Fund 11,994 Magellan Fund 38,632 Stable Value Fund 26,773 Western Digital Stock Fund 13,984 Science & Technology Fund 16,536 Equity Income Fund 9,609 Participant Loans Loans can be made to a participant up to an amount equal to the lesser of $50,000 reduced by the participant's highest outstanding balance during the preceding 12 months 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 1999 ranged from 7.0% to 11.9%. 10

11 WESTERN DIGITAL CORPORATION RETIREMENT 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 and the Company's profit sharing 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. 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 as of the beginning of 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 component. 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 (0% of eligible fiscal year compensation in 1998 and 1999) and the excess allocable to such participant, if any, is paid as a fiscal year-end cash bonus. Benefits are generally payable following retirement, disability, death, hardship or termination of employment. During 1998 and 1999, the Company did not authorize any defined pre-tax profits to be allocated to the participants. In 1998 and 1999, the Company did not contribute to the profit sharing feature of the Plan. 11

12 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) (4) INVESTMENTS The Plan's investments consist of the following at June 30, 1998 (in thousands): Shares Current Held Cost Value ------ ---- ------- Puritan Fund: Fidelity Puritan Mutual Fund ................. 880 $ 15,195 $ 18,597 Blue Chip Fund: Fidelity Blue Chip Mutual Fund ............... 163 5,956 7,651 Magellan Fund: Fidelity Magellan Mutual Fund ................ 287 24,161 31,516 Stable Value Fund: T. Rowe Price Stable Value Mutual Fund ....... 25,372 25,372 25,372 Western Digital Common Stock Fund ................ 1,303 26,263 15,392 International Stock Fund: T. Rowe Price International Stock Mutual Fund 213 2,973 3,252 Small-Cap Value Fund: T. Rowe Price Small-Cap Value Mutual Fund .... 310 6,476 7,437 Science & Technology Fund: T. Rowe Price Science & Technology Mutual Fund 340 10,461 10,777 Equity Income Fund: T. Rowe Price Equity Income Mutual Fund ...... 412 9,774 11,232 Spectrum Income Fund: T. Rowe Price Spectrum Income Mutual Fund .... 215 2,487 2,536 Equity Index Trust: T. Rowe Price Equity Index Trust ............. 144 3,624 4,199 Small Company Growth Fund: Warburg Pincus Small Company Growth Portfolio Mutual Fund .................................. 33 503 525 Western Digital Participant Loans ................ -- 5,147 5,147 -------- -------- $138,392 $143,633 ======== ======== 12

13 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Plan's investments consist of the following at June 30, 1999 (in thousands): Shares Current Held Cost Value ------ ---- ------- Puritan Fund: Fidelity Puritan Mutual Fund ................. 910 $ 16,012 $ 18,810 Blue Chip Fund: Fidelity Blue Chip Mutual Fund ............... 220 9,028 11,994 Magellan Fund: Fidelity Magellan Mutual Fund ................ 298 26,926 38,632 Stable Value Fund: T. Rowe Price Stable Value Mutual Fund ....... 26,773 26,773 26,773 Western Digital Common Stock Fund ................ 2,151 33,223 13,984 International Stock Fund: T. Rowe Price International Stock Mutual Fund 211 2,970 3,297 Small-Cap Value Fund: T. Rowe Price Small-Cap Value Mutual Fund .... 229 4,597 4,533 Science & Technology Fund: T. Rowe Price Science & Technology Mutual Fund 336 10,894 16,536 Equity Income Fund: T. Rowe Price Equity Income Mutual Fund ...... 330 7,972 9,609 Spectrum Income Fund: T. Rowe Price Spectrum Income Mutual Fund .... 236 2,716 2,637 Equity Index Trust: T. Rowe Price Equity Index Trust ............. 194 5,409 6,956 Small Company Growth Fund: Warburg Pincus Small Company Growth Portfolio Mutual Fund .................................. 40 588 646 Western Digital Participant Loans ................ -- 4,692 4,692 -------- -------- $151,800 $159,099 ======== ======== 13

14 WESTERN DIGITAL CORPORATION RETIREMENT 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, 1998 and 1999 and changes in net assets for the years ended June 30, 1998 and 1999, allocated to the separate investment funds are shown below. Net assets available for Plan benefits by fund (in thousands): June 30, 1998 ------------------------------------------------------------------------------------------- Western Inter- Blue Stable Digital national Small-Cap Puritan Chip Magellan Value Common Stock Value Fund Fund Fund Fund Stock Fund Fund Fund ------- ------- -------- -------- ---------- -------- --------- Assets Investments, at current value ................... $18,597 $ 7,651 $31,516 $ 25,372 $15,392 $3,252 $7,437 Cash and cash equivalents . 55 -- -- 8 -- -- -- ------- ------- ------- -------- ------- ------ ------ 18,652 7,651 31,516 25,380 15,392 3,252 7,437 Interfund receivable (payable) ................ 7 6 10 (64) 13 3 4 ------- ------- ------- -------- ------- ------ ------ Net assets available for Plan benefits ............. $18,659 $ 7,657 $31,526 $ 25,316 $15,405 $3,255 $7,441 ======= ======= ======= ======== ======= ====== ====== June 30, 1998 (continued) ------------------------------------------------------------------------------------------- Science & Equity Spectrum Equity Small Technology Income Income Index Company Participant Total Fund Fund Fund Trust Growth Fund Loans Plan ---------- ------- -------- ------ ----------- ----------- -------- Assets Investments, at current value ................... $10,777 $11,232 $2,536 $4,199 $ 525 $ 5,147 $143,633 Cash and cash equivalents . -- -- -- -- -- -- 63 ------- ------- ------ ------ ------ -------- -------- 10,777 11,232 2,536 4,199 525 5,147 143,696 Interfund receivable (payable) ................ 8 6 2 4 1 -- -- ------- ------- ------ ------ ------ -------- -------- Net assets available for Plan benefits ............. $10,785 $11,238 $2,538 $4,203 $ 526 $ 5,147 $143,696 ======= ======= ====== ====== ====== ======== ======== 14

15 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) Net assets available for Plan benefits by fund (in thousands): June 30, 1999 ----------------------------------------------------------------------------------------- Western Inter- Blue Stable Digital national Small-Cap Puritan Chip Magellan Value Common Stock Value Fund Fund Fund Fund Stock Fund Fund Fund ------- ------- -------- -------- ---------- -------- --------- Assets Investments, at current value ................... $18,810 $11,994 $38,632 $ 26,773 $13,984 $3,297 $4,533 Cash and cash equivalents . -- -- -- 33 -- 5 5 ------- ------- ------- -------- ------- ------ ------ 18,810 11,994 38,632 26,806 13,984 3,302 4,538 Interfund receivable (payable) ............... 10 13 18 (106) 16 5 4 ------- ------- ------- -------- ------- ------ ------ Net assets available for Plan benefits ............. $18,820 $12,007 $38,650 $ 26,700 $14,000 $3,307 $4,542 ======= ======= ======= ======== ======= ====== ====== June 30, 1999 (continued) ------------------------------------------------------------------------------------------ Science & Equity Spectrum Equity Small Technology Income Income Index Company Participant Total Fund Fund Fund Trust Growth Fund Loans Plan ---------- ------ -------- ------ ----------- ----------- -------- Assets Investments, at current value ................. $16,536 $9,609 $2,637 $6,956 $ 646 $ 4,692 $159,099 Cash and cash equivalents . 37 33 -- -- -- -- 113 ------- ------ ------ ------ ------ -------- -------- 16,573 9,642 2,637 6,956 646 4,692 159,212 Interfund receivable (payable) ............. 17 9 3 10 1 -- -- ------- ------ ------ ------ ------ -------- -------- Net assets available for Plan benefits ........... $16,590 $9,651 $2,640 $6,966 $ 647 $ 4,692 $159,212 ======= ====== ====== ====== ====== ======== ======== 15

16 WESTERN DIGITAL CORPORATION RETIREMENT 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, 1998 ----------------------------------------------------------------------------------------- Western Inter- Blue Stable Digital national Small-Cap Puritan Chip Magellan Value Common Stock Value Fund Fund Fund Fund Stock Fund Fund Fund -------- ------ -------- -------- ---------- --------- --------- Additions to net assets: Participants' contributions ... $ 912 $ 953 $ 1,689 $ 2,821 $ 1,961 $ 511 $ 889 Employer's contributions ...... 250 185 376 561 467 109 179 Interest and dividend income .. 1,411 287 1,962 1,474 (3) 149 447 Realized/unrealized gain (loss) 1,582 1,231 5,147 -- (23,110) (60) 591 -------- ------ -------- -------- -------- ------- ------ Total additions ........... 4,155 2,656 9,174 4,856 (20,685) 709 2,106 -------- ------ -------- -------- -------- ------- ------ Deductions from net assets: Participant distributions paid 706 180 2,160 1,877 1,174 147 380 Net forfeitures transferred out (in) .................... (2) -- 2 (4) 2 (1) -- -------- ------ -------- -------- -------- ------- ------ Total deductions .......... 704 180 2,162 1,873 1,176 146 380 -------- ------ -------- -------- -------- ------- ------ Net interfund transfers ......... (1,151) 710 (6) (3,694) (279) (470) 425 -------- ------ -------- -------- -------- ------- ------ Increase (decrease) in net assets available for Plan benefits 2,300 3,186 7,006 (711) (22,140) 93 2,151 Net assets available for Plan benefits at: Beginning of year ........... 16,359 4,471 24,520 26,027 37,545 3,162 5,290 -------- ------ -------- -------- -------- ------- ------ End of year ................. $ 18,659 $7,657 $ 31,526 $ 25,316 $ 15,405 $ 3,255 $7,441 ======== ====== ======== ======== ======== ======= ====== Year ended June 30, 1998 (continued) ----------------------------------------------------------------------------------------- Small Science & Equity Spectrum Equity Company Technology Income Income Index Growth Participant Total Fund Fund Fund Trust Fund Loans Plan ---------- ------- -------- ------- ------- ----------- --------- Additions to net assets: Participants' contributions ... $ 1,346 $ 1,355 $ 368 $ 547 $116 $ -- $ 13,468 Employer's contributions ...... 311 255 67 100 20 -- 2,880 Interest and dividend income .. 838 898 119 -- -- 391 7,973 Realized/unrealized gain (loss) 469 786 39 641 46 -- (12,638) -------- ------- ------ ------- ---- ------- --------- Total additions ........... 2,964 3,294 593 1,288 182 391 11,683 -------- ------- ------ ------- ---- ------- --------- Deductions from net assets: Participant distributions paid 618 546 62 84 51 (561) 7,424 Net forfeitures transferred out (in) .................... 1 2 2 (2) -- -- -- -------- ------- ------ ------- ---- ------- --------- Total deductions .......... 619 548 64 82 51 (561) 7,424 -------- ------- ------ ------- ---- ------- --------- Net interfund transfers ......... (722) 1,013 880 2,924 370 -- -- -------- ------- ------ ------- ---- ------- --------- Increase (decrease) in net assets available for Plan benefits 1,623 3,759 1,409 4,130 501 952 4,259 Net assets available for Plan benefits at: Beginning of year ........... 9,162 7,479 1,129 73 25 4,195 139,437 -------- ------- ------ ------- ---- ------- --------- End of year ................. $ 10,785 $11,238 $2,538 $ 4,203 $526 $ 5,147 $ 143,696 ======== ======= ====== ======= ==== ======= ========= 16

17 WESTERN DIGITAL CORPORATION RETIREMENT 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, 1999 --------------------------------------------------------------------------------------- Western Inter- Blue Stable Digital national Small-Cap Puritan Chip Magellan Value Common Stock Value Fund Fund Fund Fund Stock Fund Fund Fund -------- ------- -------- ------- ---------- -------- --------- Additions to net assets: Participants' contributions ... $ 1,077 $ 1,315 $ 1,707 $ 2,469 $ 1,884 $ 442 $ 628 Employer's contributions ...... 261 281 413 609 495 108 154 Interest and dividend income .. 1,945 362 2,911 1,533 (9) 118 391 Realized/unrealized gain (loss) (148) 1,643 5,618 -- (9,878) 73 (1,264) -------- ------- -------- ------- -------- ------- ------- Total additions ........... 3,135 3,601 10,649 4,611 (7,508) 741 (91) -------- ------- -------- ------- -------- ------- ------- Deductions from net assets: Participant distributions paid 1,099 713 2,814 3,561 932 184 318 Net forfeitures transferred out (in) .................... 2 -- 10 2 (9) (1) 2 -------- ------- -------- ------- -------- ------- ------- Total deductions .......... 1,101 713 2,824 3,563 923 183 320 -------- ------- -------- ------- -------- ------- ------- Net interfund transfers ......... (1,873) 1,462 (701) 336 7,026 (506) (2,488) -------- ------- -------- ------- -------- ------- ------- Increase (decrease) in net assets available for Plan benefits 161 4,350 7,124 1,384 (1,405) 52 (2,899) Net assets available for Plan benefits at: Beginning of year ........... 18,659 7,657 31,526 25,316 15,405 3,255 7,441 -------- ------- -------- ------- -------- ------- ------- End of year ................. $ 18,820 $12,007 $ 38,650 $26,700 $ 14,000 $ 3,307 $ 4,542 ======== ======= ======== ======= ======== ======= ======= Year ended June 30, 1999 (continued) ------------------------------------------------------------------------------------------ Small Science & Equity Spectrum Equity Company Technology Income Income Index Growth Participant Total Fund Fund Fund Trust Fund Loans Plan ---------- -------- -------- ------- ------- ----------- -------- Additions to net assets: Participants' contributions ... $ 1,388 $ 1,034 $ 422 $ 1,018 $117 $ -- $ 13,501 Employer's contributions ...... 330 246 88 222 27 -- 3,234 Interest and dividend income .. 314 778 206 (3) -- 421 8,967 Realized/unrealized gain (loss) 5,736 549 (142) 1,139 8 -- 3,334 -------- -------- ------- ------- ---- ------- -------- Total additions ........... 7,768 2,607 574 2,376 152 421 29,036 -------- -------- ------- ------- ---- ------- -------- Deductions from net assets: Participant distributions paid 1,116 1,040 284 548 35 (876) 13,520 Net forfeitures transferred out (in) .................... (1) -- -- (5) -- -- -- -------- -------- ------- ------- ---- ------- -------- Total deductions .......... 1,115 1,040 284 543 35 (876) 13,520 -------- -------- ------- ------- ---- ------- -------- Net interfund transfers ......... (848) (3,154) (188) 930 4 -- -- -------- -------- ------- ------- ---- ------- -------- Increase (decrease) in net assets available for Plan benefits 5,805 (1,587) 102 2,763 121 (455) 15,516 Net assets available for Plan benefits at: Beginning of year ........... 10,785 11,238 2,538 4,203 526 5,147 143,696 -------- -------- ------- ------- ---- ------- -------- End of year ................. $ 16,590 $ 9,651 $ 2,640 $ 6,966 $647 $ 4,692 $159,212 ======== ======== ======= ======= ==== ======= ======== 17

18 SCHEDULE I WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1999 (IN THOUSANDS) (a) Identity of Issuer, Borrower, Description of Investment, Current Lessor or Similar Party Including Collateral or Par Value Cost Value ----------------------------- --------------------------------- -------- -------- Fidelity Retirement Services 910 shares Fidelity Puritan Mutual Fund $ 16,012 $ 18,810 Fidelity Retirement Services 220 shares Fidelity Blue Chip Mutual Fund 9,028 11,994 Fidelity Retirement Services 298 shares Fidelity Magellan Mutual Fund 26,926 38,632 *T. Rowe Price Trust 26,733 shares T. Rowe Price Stable Company Value Mutual Fund 26,773 26,773 *T. Rowe Price Trust 211 shares T. Rowe Price International Company Stock Mutual Fund 2,970 3,297 *T. Rowe Price Trust 229 shares T. Rowe Price Small-Cap Company Value Mutual Fund 4,597 4,533 *T. Rowe Price Trust 336 shares T. Rowe Price Science Company & Technology Mutual Fund 10,894 16,536 *T. Rowe Price Trust 330 shares T. Rowe Price Equity Company Income Mutual Fund 7,972 9,609 *T. Rowe Price Trust 236 shares T. Rowe Price Spectrum Company Income Mutual Fund 2,716 2,637 *T. Rowe Price 194 shares T. Rowe Price Equity Index Trust Company Mutual Fund 5,409 6,956 Warburg Pincus Funds 40 shares of Warburg Pincus Small Company Growth Portfolio Mutual Fund 588 646 *Western Digital Corporation 2,151 shares common stock; $.01 par value 33,223 13,984 Plan Participants 767 participant loans with annual interest rates ranging from 7.0% to 11.9% 4,692 4,692 -------- -------- $151,800 $159,099 ======== ======== * Parties in interest. See accompanying independent auditors' report. 18

19 SCHEDULE II WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN ITEM 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS YEAR ENDED JUNE 30, 1999 Original Amount Report Identity and Amount Received Year Unpaid Issue Maturity Interest Amount Overdue Obligator of Loan Principal Interest Balance Date Date Rate Principal Interest - -------------------- -------- --------- -------- ------- -------- -------- -------- --------- -------- Loans in Default (in thousands): Ladick, Andrew J. ........... $13 $ -- $ -- $12 7/25/94 12/15/04 8.25% $12 $6 Tinajero, Michelle S. ....... 2 -- -- 2 8/16/96 9/14/99 9.25% 2 -- Wollum, Glenn E. ............ 17 -- -- 16 10/23/95 11/1/99 10.00% 16 5 Ibale, Federico Y. .......... 10 -- -- 8 4/1/95 6/9/00 9.50% 8 2 Moore, Barbra L. ............ 12 -- -- 5 12/11/92 12/12/97 7.00% 5 1 Huang, Lipson S. ............ 16 -- -- 15 7/25/94 12/17/04 8.25% 15 8 Rachapaetayakom, Benjarong .. 3 -- -- 3 2/1/95 3/31/00 9.50% 3 1 Donrgan, Steven ............. 7 -- -- 3 12/11/92 12/15/97 7.00% 3 1 Vu, Chinh L. ................ 10 -- -- 9 10/11/95 8/21/00 10.00% 9 2 See accompanying independent auditors' report. 19

20 SCHEDULE III WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN ITEM 27D -- SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED JUNE 30, 1999 Current Expense Value of Incurred Asset on Net Identity of Purchase Selling Lease with Cost Transaction Gain Party Involved Description of Asset Price Price Rental Transaction of Asset Date (Loss) - -------------- -------------------- -------- ------- ------ ----------- -------- ----------- ------ Series of Transactions in Excess of 5% of Current Value of the Plan's Assets (in thousands): Fidelity Retirement Fidelity Puritan Mutual Services Fund 3,796 -- -- -- 3,796 3,796 -- Fidelity Retirement Fidelity Puritan Mutual Services Fund 3,026 3,434 -- -- 3,026 3,434 408 Fidelity Retirement Fidelity Magellan Mutual Services Fund 6,714 -- -- -- 6,714 6,714 -- Fidelity Retirement Fidelity Magellan Mutual Services Fund 4,263 5,217 -- -- 4,263 5,217 954 Western Digital Corporation Common Stock 13,162 -- -- -- 13,162 13,162 -- Western Digital Corporation Common Stock 5,282 4,692 -- -- 5,282 4,692 (590) T. Rowe Price T. Rowe Price Trust Stable Value Company Mutual Fund 12,146 -- -- -- 12,146 12,146 -- T. Rowe Price T. Rowe Price Trust Stable Value Company Mutual Fund 10,763 10,763 -- -- 10,763 10,763 -- T. Rowe Price T. Rowe Price Trust Science & Technology Company Mutual Fund 4,175 -- -- -- 4,175 4,175 -- T. Rowe Price T. Rowe Price Trust Science & Technology Company Mutual Fund 3,876 4,150 -- -- 3,876 4,150 274 Transactions in Excess of 5% of Current Value of the Plan's Assets: None See accompanying independent auditors' report. 20

21 WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN INDEX TO EXHIBITS ----------------- Sequentially Exhibit Description Numbered Page - ------- ----------- ------------- 23. Consent of Independent Auditors................... 22 21

1 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS ------------------------------- Retirement Plan Committee of the Board of Directors Western Digital Corporation Retirement 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 Retirement Savings and Profit Sharing Plan of our report dated December 7, 1999, relating to the statements of net assets available for plan benefits of Western Digital Corporation Retirement Savings and Profit Sharing Plan as of June 30, 1998 and 1999 and the related statements of changes in net assets available for plan benefits for the years then ended and supplemental schedules, which report appears in the June 30, 1999 annual report on Form 11-K of Western Digital Corporation Retirement Savings and Profit Sharing Plan. KPMG LLP Orange County, California December 22, 1999