8-K

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

Date of Report (Date of earliest event reported): October 19, 2011

Western Digital Corporation

(Exact name of registrant as specified in its charter)

Delaware	001-08703	33-0956711
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3355 Michelson Drive, Suite 100 Irvine, California	92612
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (949) 672-7000

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 230.425)

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 October 19, 2011, Western Digital Corporation (“Western Digital”) announced financial results for the first fiscal quarter ended September 30, 2011. 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 first quarter ended September 30, 2011 is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

In Western Digital’s press release attached as Exhibit 99.1 hereto, Western Digital reports certain financial information, including net income and earnings per share on both a GAAP and a non-GAAP basis for the first fiscal quarter ended September 30, 2011. These non-GAAP measures exclude expenses related to Western Digital’s proposed acquisition of Hitachi Global Storage Technologies and unrelated litigation accruals. Because management believes these expenses may not be indicative of ongoing operations, management believes that the non-GAAP measures presented in the press release are useful to investors as an alternative method for measuring Western Digital’s operating performance and comparing it against prior periods’ performance.

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 October 19, 2011 announcing financial results for the first fiscal quarter ended September 30, 2011.
99.2	First Quarter Fiscal Year 2012 Western Digital Corporation Investor Information Summary.

2

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/ Michael C. Ray
Date: October 19, 2011		Michael C. Ray
		Senior Vice President, General Counsel and Secretary

EX-99.1

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 Q1 REVENUE OF $2.7 BILLION AND
NET INCOME OF $239 MILLION, OR $1.01 PER SHARE

Company to Update Impact of Thailand Floods in Today’s Conference Call

IRVINE, Calif.—Oct. 19, 2011—Western Digital Corp. (NYSE: WDC) today reported revenue of $2.7 billion, hard-drive unit shipments of 58 million and net income of $239 million, or $1.01 per share, for its first fiscal quarter ended Sept. 30, 2011. The company’s results include expenses of $21 million associated with the planned acquisition of Hitachi Global Storage Technologies (Hitachi GST) announced Mar. 7, 2011 and unrelated litigation accruals. Excluding these expenses, non-GAAP net income was $260 million or $1.10 per share.¹

In the year-ago quarter, the company reported revenue of $2.4 billion, net income of $197 million, or $0.84 per share, and shipped 51 million hard drives.

The company generated $352 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $3.7 billion.

¹ Non-GAAP net income for the first quarter of fiscal 2012 consists of GAAP net income of $239 million plus $21 million of acquisition-related expenses and unrelated litigation accruals. Non-GAAP earnings per share of $1.10 for the first quarter is calculated by using the same 237 million diluted shares as is used for GAAP earnings per share. The tax effect of the acquisition-related expenses and unrelated litigation accruals was not material.

WD Announces Q1 Revenue of $2.7 Billion and
Net Income of $239 Million, or $1.01 Per Share
Page 2

Conference Call

The investment community conference call to discuss these results will be broadcast live over the Internet today at 2 p.m. Pacific/5 p.m. Eastern. As previously reported, the company will also provide an update on the impact of the recent severe flooding in Thailand on its operations in the Bangkok region, along with its outlook for the December quarter. The live and archived conference call webcast can be accessed online at www.westerndigital.com/investor, click on “Conference Calls.” The telephone replay number is 800-568-4850 in the U.S. or +1-203-369-3813 for international callers.

About WD

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 designs and produces reliable, high-performance hard drives and solid state drives that keep users’ data accessible and secure from loss. Its advanced technologies are configured into applications for client and enterprise computing, embedded systems and consumer electronics, as well as its own consumer storage and home entertainment products.

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

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Western Digital, WD, and the WD logo are registered trademarks of Western Digital Technologies, Inc. All other trademarks mentioned herein belong to their respective owners.

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions; unaudited)

	Sept. 30,		Jul. 1,
	2011		2011
ASSETS
Current assets:
Cash and cash equivalents	$	3,675	$	3,490
Accounts receivable, net		1,356		1,206
Inventories		645		577
Other		250		214
Total current assets		5,926		5,487
Property, plant and equipment, net		2,209		2,224
Goodwill		151		151
Other intangible assets, net		67		71
Other assets		114		185
Total assets	$	8,467	$	8,118
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,708	$	1,545
Accrued expenses		348		349
Accrued warranty		135		132
Current portion of long-term debt		163		144
Total current liabilities		2,354		2,170
Long-term debt		100		150
Other liabilities		290		310
Total liabilities		2,744		2,630
Total shareholders’ equity		5,723		5,488
Total liabilities and shareholders’ equity	$	8,467	$	8,118

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

	Three Months Ended
	Sept. 30,			Oct. 1,
	2011			2010
Revenue, net	$	2,694		$	2,396
Cost of revenue		2,153			1,959
Gross margin		541			437
Operating expenses:
Research and development		193			167
Selling, general and administrative		89			59
Total operating expenses		282			226
Operating income		259			211
Net interest and other		(1	)		—
Income before income taxes		258			211
Income tax provision		19			14
Net income	$	239		$	197
Income per common share:
Basic	$	1.03		$	0.86
Diluted	$	1.01		$	0.84
Weighted average shares outstanding:
Basic		233			230
Diluted		237			234

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

	Three Months Ended
	Sept. 30,			Oct. 1
	2011			2010
Cash flows from operating activities
Net income	$	239		$	197
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		158			150
Stock-based compensation		17			19
Deferred income taxes		9			—
Changes in operating assets and liabilities		(71	)		24
Net cash provided by operating activities		352			390
Cash flows from investing activities
Purchases of property, plant and equipment		(134	)		(200	)
Cash used in investing activities		(134	)		(200	)
Cash flows from financing activities
Employee stock plans, net		(2	)		9
Repurchases of common stock		—			(50	)
Repayment of long-term debt		(31	)		(25	)
Net cash used in financing activities		(33	)		(66	)
Net increase in cash and cash equivalents		185			124
Cash and cash equivalents, beginning of period		3,490			2,734
Cash and cash equivalents, end of period	$	3,675		$	2,858

EX-99.2

Exhibit 99.2

(CHART) Page ? 1 Volume and Market Share EPS Analysis Revenue and Gross Margin Note: Unless otherwise noted, information is presented on a GAAP basis Note: Q2'09 includes restructuring charge of $113M. (r) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY08 FY08 FY08 FY09 FY09 FY09 FY09 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 TAM 143.7 131.6 131.9 145.8 123.8 111.4 135.4 152.4 160.4 163.3 156.2 164.0 167.5 159.5 165.8 176.1 Share 23.9% 26.3% 26.7% 27.0% 28.6% 28.3% 29.5% 28.9% 30.9% 31.3% 31.8% 30.9% 31.2% 31.2% 32.5% 32.8% Units (HDD) 34.2 34.5 35.2 39.4 35.5 31.6 40.0 44.1 49.5 51.1 49.7 50.7 52.2 49.8 53.8 57.8 ASP $61 $59 $56 $53 $51 $50 $48 $49 $52 $51 $47 $46 $47 $45 $44 $46 Revenue $2,204 $2,111 $1,993 $2,109 $1,823 $1,592 $1,928 $2,208 $2,619 $2,641 $2,382 $2,396 $2,475 $2,252 $2,403 $2,694 Gross Margin $513 $477 $425 $424 $290 $253 $370 $514 $687 $665 $535 $437 $475 $410 $469 $541 Gross Margin % 23.3% 22.6% 21.3% 20.1% 15.9% 15.9% 19.2% 23.3% 26.2% 25.2% 22.5% 18.2% 19.2% 18.2% 19.5% 20.1% R&D $122 $123 $128 $133 $119 $125 $132 $142 $154 $160 $154 $167 $169 $179 $188 $193 SG&A $59 $56 $56 $57 $42 $49 $52 $53 $60 $64 $61 $59 $66 $63 $77 $71 Other $ - $ - $ - $ - $113 $18 ($23) $ - $ - $ - $27 $ - $ - $10 $32 $18 Total Operating Expenses $181 $179 $184 $190 $274 $192 $161 $195 $214 $224 $242 $226 $235 $252 $297 $282 Operating Income $332 $298 $241 $234 $16 $61 $209 $319 $473 $441 $293 $211 $240 $158 $172 $259 Net Income $305 $280 $213 $211 $14 $50 $196 $288 $429 $400 $265 $197 $225 $146 $158 $239 EPS $1.35 $1.23 $0.94 $0.93 $0.06 $0.22 $0.86 $1.25 $1.85 $1.71 $1.13 $0.84 $0.96 $0.62 $0.67 $1.01 Diluted Shares Outstanding 226 227 227 226 224 226 227 230 232 234 235 234 235 236 237 237 Top 10 Customers Revenue 47% 48% 53% 51% 49% 47% 52% 56% 55% 51% 52% 50% 48% 49% 53% 49% Revenue by Channel OEM 48% 50% 57% 56% 57% 48% 54% 52% 48% 49% 54% 50% 45% 47% 55% 53% Distributors 34% 34% 24% 26% 21% 30% 29% 31% 30% 33% 29% 32% 33% 33% 29% 29% Retail 18% 16% 19% 18% 22% 22% 17% 17% 22% 18% 17% 18% 22% 20% 16% 18% Revenue by Geography Americas 32% 28% 29% 23% 23% 26% 24% 22% 25% 24% 25% 23% 22% 22% 20% 19% Europe 32% 31% 25% 29% 29% 28% 22% 22% 25% 24% 21% 23% 25% 24% 20% 22% Asia 36% 41% 46% 48% 48% 46% 54% 56% 50% 52% 54% 54% 53% 54% 60% 59% Compute Units Notebook 7.134 8.819 9.878 12.411 11.187 7.932 14.670 16.528 17.735 17.072 16.802 16.582 17.385 16.227 16.867 19.622 Desktop 18.331 17.834 15.863 17.484 14.225 14.659 16.349 18.282 19.290 21.461 20.282 20.918 20.411 20.118 22.348 21.588 Non-Compute Units Consumer Electronics 4.077 3.109 4.097 3.913 4.128 3.487 3.666 3.064 4.083 4.643 5.306 5.239 4.709 4.765 6.459 7.188 Branded 3.390 3.456 4.081 4.396 4.918 4.512 3.994 4.539 6.219 5.565 5.005 5.678 7.427 6.404 5.672 7.060 Enterprise Units 1.280 1.324 1.266 1.203 1.005 0.973 1.308 1.669 2.170 2.356 2.346 2.319 2.284 2.318 2.463 2.369 Total HDD Units 34.212 34.542 35.185 39.407 35.463 31.563 39.987 44.082 49.497 51.097 49.741 50.736 52.216 49.832 53.809 57.827 Amounts in millions; except per share amounts,ASP, percentages. Revenue by Geography Rolling Four Quarters Ending Q1 FY09 Revenue by Geography Rolling Four Quarters Ending Q1 FY12 (CHART) (CHART) Asia 56% Europe 23% Americas 21% (CHART) Asia 43% Europe 29% Americas 28% (CHART) (CHART)

Page ? 2 (r) Free Cash Flow R4Q Return on Invested Capital R&D and Capital Expenditures Gross vs. Net Cash & Cash Equivalents Business Model Gross Margin 18%-23%Operating Expense 9%-10%Operating Income 8%-14%Tax 6%-9% of Income Before TaxCapital Expenditures 7%-8% Inventory Turns 12-16 TurnsConversion Cycle 4-8 Days Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY08 FY08 FY08 FY09 FY09 FY09 FY09 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 Cash and Cash Equivalents $917 $917 $1,104 $1,213 $1,376 $1,579 $1,794 $2,056 $2,435 $2,826 $2,734 $2,858 $3,110 $3,230 $3,490 $3,675 Debt $775 $514 $509 $507 $504 $502 $482 $463 $444 $425 $400 $375 $350 $325 $294 $263 Net Cash and Cash Equivalents $142 $403 $595 $706 $872 $1,077 $1,312 $1,593 $1,991 $2,401 $2,334 $2,483 $2,760 $2,905 $3,196 $3,412 Cash Flow From Operations $519 $431 $229 $301 $300 $355 $349 $434 $557 $588 $363 $390 $505 $313 $447 $352 Free Cash Flow $350 $294 $83 $139 $160 $249 $238 $258 $358 $411 $178 $190 $255 $138 $294 $218 Capital Expenditures $169 $137 $146 $162 $140 $106 $111 $176 $199 $177 $185 $200 $250 $175 $153 $134 Depreciation and Amortization $111 $111 $113 $117 $122 $119 $122 $121 $126 $128 $134 $150 $151 $151 $150 $158 EBITDA $443 $409 $354 $351 $138 $180 $331 $440 $599 $569 $427 $361 $391 $309 $322 $417 Accounts Receivable, Net $1,086 $1,014 $1,010 $1,082 $926 $824 $926 $1,131 $1,365 $1,257 $1,256 $1,325 $1,250 $1,171 $1,206 $1,356 Inventory Raw Materials $171 $153 $144 $129 $124 $104 $97 $96 $102 $115 $159 $155 $141 $151 $172 $170 Work in Process $131 $131 $145 $168 $159 $152 $154 $173 $212 $254 $255 $266 $274 $260 $263 $275 Finished Goods $157 $171 $167 $180 $163 $129 $125 $126 $139 $138 $146 $140 $153 $163 $142 $200 Inventory, Net $459 $455 $456 $477 $446 $385 $376 $395 $453 $507 $560 $561 $568 $574 $577 $645 Property, Plant and Equipment, Net $1,560 $1,529 $1,668 $1,674 $1,620 $1,570 $1,584 $1,625 $1,696 $1,756 $2,159 $2,245 $2,277 $2,249 $2,224 $2,209 Accounts Payable $1,216 $1,144 $1,181 $1,215 $1,075 $1,001 $1,101 $1,342 $1,507 $1,508 $1,507 $1,703 $1,628 $1,486 $1,545 $1,708 Days Sales Outstanding 45 44 46 47 46 47 47 47 47 43 48 50 46 47 46 46 Days Inventory Outstanding 25 25 27 26 27 26 24 21 21 23 28 26 26 28 27 27 Days Payables Outstanding 66 64 69 66 64 68 69 72 71 69 74 79 74 73 73 72 Cash Conversion Cycle 4 5 4 7 9 5 2 (4) (3) (3) 2 (3) (2) 2 - 1 Inventory Turns 15 14 14 14 14 14 15 17 17 16 13 14 14 13 13 13 Shares Repurchased - 1.5 - 1.2 - - - - - - - 1.8 - - - - Shares Repurchased $ $ - $44 $ - $36 $ - $ - $ - $ - $ - $ - $ - $50 $ - $ - $ - $ - Remaining Amount Authorized $46 $502 $502 $466 $466 $466 $466 $466 $466 $466 $466 $416 $416 $416 $416 $416 R4Q ROIC 31.4% 33.8% 34.0% 33.5% 22.9% 14.9% 13.9% 15.3% 24.9% 31.2% 30.2% 26.4% 21.1% 15.6% 13.2% 13.6% R4Q ROA 19.0% 20.7% 21.2% 21.1% 14.7% 9.8% 9.2% 10.4% 17.0% 21.2% 20.7% 18.1% 14.6% 10.9% 9.2% 9.5% Worldwide Headcount 42,534 41,876 50,072 51,409 50,838 43,898 45,991 52,208 55,128 61,803 62,500 62,817 62,991 61,349 65,431 67,799 Balance sheet, cash flows, earnings and share repurchase amounts in millions (CHART) (CHART) (CHART) (CHART) Note: Unless otherwise noted, information is presented on a GAAP basis

Page ? 3 FootnotesFY08 and Q1 FY11 ASP, Revenue by Channel and Revenue by Geography exclude external sales of media/substratesUnit volume excludes WD TV Media Players without hard drives, WD Livewire, SSD and mediaWorldwide Headcount excludes temporary employeesConsumer Electronics includes gaming (r) FormulasShare = Units / TAMASP = Revenue / UnitsFree Cash Flow = Cash Flow from Operations - Capital ExpendituresEBITDA = Net income + Interest Expense + Income Tax Expense + Depreciation and AmortizationDays Sales Outstanding (DSO) = Accounts Receivable / (Revenue / 91 days)Days Inventory Outstanding (DIO) = Inventory / (Cost of Revenue / 91 days)Days Payables Outstanding (DPO) = Accounts Payable / (Cost of Revenue / 91 days)Cash Conversion Cycle = DSO + DIO - DPOInventory Turns = 364 days / DIOR4Q ROIC = R4Q (Net Income from Continuing Operations + Interest Expense) / R4Q Average (Equity + Debt)R4Q ROA = R4Q Net Income from Continuing Operations / R4Q Average Total Assets

Page ? 4 (r) Non-GAAP Financial MeasuresFree Cash Flow: Free cash flow is a non-GAAP financial measure defined as cash flows from operations less capital expenditures. We consider free cash flow to be useful as an indicator of our overall liquidity, as the amount of free cash flow generated in any period is representative of cash that is available for strategic opportunities including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, repaying debt and repurchasing stock. We also believe that free cash flow is one of several benchmarks used by investors for comparison of our liquidity with other companies in our industry, although our measure of free cash flow may not be directly comparable to similar measures reported by other companies. Free cash flow should not be construed as an alternative to cash flows from operations or other cash flow measurements determined in accordance with GAAP. EBITDA: EBITDA is a non-GAAP financial measure defined as net income before interest, income tax expense, depreciation and amortization. We include information concerning EBITDA because we believe it is a useful measure to evaluate our operating performance. As a measure of our operating performance, we believe EBITDA provides a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. While EBITDA is a relevant and widely used measure of operating performance, it does not represent net income as defined by GAAP and it should not be considered as an alternative to that measure in evaluating operating performance. Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY08 FY08 FY08 FY09 FY09 FY09 FY09 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 Reconciliation of Cash Flows from Operations to Free Cash Flow Cash Flows from Operations $519 $431 $229 $301 $300 $355 $349 $434 $557 $588 $363 $390 $505 $313 $447 $352 Capital Expenditures (169) (137) (146) (162) (140) (106) (111) (176) (199) (177) (185) (200) (250) (175) (153) (134) Free Cash Flow $350 $294 $83 $139 $160 $249 $238 $258 $358 $411 $178 $190 $255 $138 $294 $218 Reconciliation of Net Income to EBITDA Net Income $305 $280 $213 $211 $14 $50 $196 $288 $429 $400 $265 $197 $225 $146 $158 $239 Interest Expense 16 8 4 4 9 3 2 2 2 1 1 - 1 (1) 2 1 Income Tax Expense 11 10 24 19 (7) 8 11 29 42 40 27 14 14 13 12 19 Depreciation and Amortization 111 111 113 117 122 119 122 121 126 128 134 150 151 151 150 158 EBITDA $443 $409 $354 $351 $138 $180 $331 $440 $599 $569 $427 $361 $391 $309 $322 $417