WD® Announces Q2 Revenue of $2.475 Billion and Net Income of $225 Million, or $0.96 Per Share

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IRVINE, Calif. Jan. 18, 2011 $2.475 billion $225 million $0.96 Dec. 31, 2010 $2.619 billion $429 million $1.85

$505 million $3.1 billion

John Coyne

3 p.m. PST 6 p.m. EST

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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 media products.

www.westerndigital.com

Oct. 29, 2010

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)

			Dec. 31,	Jul. 2,
			2010	2010

ASSETS

Current assets:
	Cash and cash equivalents		$ 3,110	$ 2,734
	Accounts receivable, net		1,250	1,256
	Inventories		568	560
	Other		192	170
		Total current assets	5,120	4,720
Property and equipment, net			2,277	2,159
Goodwill			151	146
Other intangible assets, net			79	88
Other assets			216	215
		Total assets	$ 7,843	$ 7,328


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
	Accounts payable		$ 1,628	$ 1,507
	Accrued expenses		262	281
	Accrued warranty		135	129
	Current portion of long-term debt		119	106
		Total current liabilities	2,144	2,023
Long-term debt			231	294
Other liabilities			309	302
		Total liabilities	2,684	2,619
Shareholders’ equity			5,159	4,709
		Total liabilities and shareholders’ equity	$ 7,843	$ 7,328

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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


			Three Months Ended		Six Months Ended
			Dec. 31,	Jan. 1,	Dec. 31,	Jan. 1,
			2010	2010	2010	2010

Revenue, net			$ 2,475	$ 2,619	$ 4,871	$ 4,827
Cost of revenue			2,000	1,932	3,959	3,626
	Gross margin		475	687	912	1,201
Operating expenses:
	Research and development		169	154	336	296
	Selling, general and administrative		66	60	125	113
		Total operating expenses	235	214	461	409
Operating income			240	473	451	792
	Net interest and other		(1)	(2)	(1)	(4)
Income before income taxes			239	471	450	788
	Income tax provision		14	42	28	71
Net income			$ 225	$ 429	$ 422	$ 717

Income per common share:
	Basic		$ 0.98	$ 1.89	$ 1.83	$ 3.17
	Diluted		$ 0.96	$ 1.85	$ 1.80	$ 3.10

Weighted average shares outstanding:
	Basic		230	227	230	226
	Diluted		235	232	235	231

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)


		Three Months Ended		Six Months Ended
		Dec. 31,	Jan. 1,	Dec. 31,	Jan. 1,
		2010	2010	2010	2010

Cash flows from operating activities
Net income		$ 225	$ 429	$ 422	$ 717
Adjustments to reconcile net income to net cash
provided by operations:
	Depreciation and amortization	151	126	301	247
	Stock-based compensation	18	13	37	27
	Deferred income taxes	1

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