1
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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, 1998
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.
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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 RETIREMENT
SAVINGS AND PROFIT SHARING PLAN
Date: December 23, 1998 By: /s/ DUSTON M. WILLIAMS
----------------- ----------------------------------
Duston M. Williams
Chairman of the Retirement
Plan Committee
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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, 1997 and 1998........ 6
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended June 30, 1997 and 1998....................................... 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
Schedules of Prohibited Transactions and Leases in Default are not included
herein because there were no such transactions during the period.
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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, 1997 and 1998 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,
1997 and 1998, 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 PEAT MARWICK LLP
Orange County, California
December 14, 1998
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
(IN THOUSANDS)
June 30,
------------------------
1997 1998
-------- --------
Assets
Investments, at current value: (Notes 1, 2, 4 and 5)
Debt and equity securities ..................... $125,200 $138,486
Participant loans .............................. 4,195 5,147
-------- --------
Total investments .......................... 129,395 143,633
Cash and cash equivalents .......................... 1,609 63
Receivables (Notes 2 and 3)
Participants' contributions .................... 982 --
Employer's contribution ........................ 309 --
Employer's profit sharing contribution ......... 7,142 --
-------- --------
Total assets ............................... $139,437 $143,696
======== ========
Net assets available for Plan benefits:
Available to terminated participants ........... $ 27,833 $ 31,301
Available to continuing participants ........... 111,604 112,395
-------- --------
Net assets available for Plan benefits ..... $139,437 $143,696
======== ========
The accompanying notes are an integral part of these financial statements.
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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,
--------------------------
1997 1998
Additions to net assets:
Participants' contributions .............. $ 10,969 $ 13,468
Employer's contributions ................. 2,665 2,880
Employer's profit sharing contributions... 7,142 --
--------- ---------
Total contributions .................. 20,776 16,348
Interest and dividend income ............. 5,973 7,973
Realized/unrealized gain (loss) .......... 27,361 (12,638)
--------- ---------
Total investment income (loss) ....... 33,334 (4,665)
--------- ---------
Total additions ...................... 54,110 11,683
Deductions from net assets:
Participant distributions paid ........... 7,334 7,424
--------- ---------
Increase in net assets available
for Plan benefits ................ 46,776 4,259
Net assets available for Plan benefits at
beginning of year ........................ 92,661 139,437
--------- ---------
Net assets available for Plan benefits at
end of year .............................. $ 139,437 $ 143,696
========= =========
The accompanying notes are an integral part of these financial statements.
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WESTERN DIGITAL CORPORATION RETIREMENT 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
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, 1997 and 1998 and
changes in net assets available for Plan benefits for the years ended
June 30, 1997 and 1998.
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, 1997 and
1998, 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 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, 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
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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 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
Common Stock Fund in 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 Fund The Small-Cap Value Fund purchases shares in the
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 & Technology The Science and Technology Fund purchases shares
Fund in the T. Rowe Price Science and Technology
Mutual Fund, which invests primarily in common
Fund stock of companies expected to benefit from
the development, advancement, and use of science
and technology.
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.
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Fund Investment Strategy
---- -------------------
Spectrum The Spectrum Income Fund purchases shares in the
Income 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.
Equity Index The Equity Index Fund purchases shares in the T.
Trust 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
Growth Fund the Warburg Pincus Small Company Growth Portfolio
Mutual Fund, which invests primarily in common
stock of small-sized domestic corporations.
On June 30, 1997, the Plan closed the Disciplined Equity Fund and
transferred all participant balances invested in this fund into any or
all of the remaining funds offered by the Plan as instructed by the
individual participants. In the event that no designation was made by a
participant, amounts invested in the Disciplined Equity Fund were
transferred to the Stable Value Fund at June 30, 1997.
As of June 30, 1998, 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, 1998, the following investments represented greater than
5% of the market value of the Plan's net assets (in thousands):
Fund Market Value
---- ------------
Puritan Fund $18,597
Blue Chip Fund 7,651
Magellan Fund 31,516
Stable Value Fund 25,372
Western Digital Stock Fund 15,392
Small-Cap Value Fund 7,437
Science & Technology Fund 10,777
Equity Income Fund 11,232
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 1998 ranged from 7% to 10%.
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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 (6.0% and 0% of
eligible fiscal year compensation in 1997 and 1998, respectively) 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 1997 and 1998, the Company authorized 4.1% and 0%, respectively,
of defined pre-tax profits to be allocated to the participants. In 1997
and 1998, the Company contributed $7,141,684 and $0, respectively, as
profit sharing to the Plan.
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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, 1997 (in
thousands):
Shares Current
Held Cost Value
------ -------- --------
Puritan Fund:
Fidelity Puritan Mutual Fund....................... 803 $ 13,316 $ 15,505
Blue Chip Fund:
Fidelity Blue Chip Mutual Fund..................... 106 3,404 4,027
Magellan Fund:
Fidelity Magellan Mutual Fund...................... 257 20,317 23,432
Stable Value Fund:
T. Rowe Price Stable Value Mutual Fund.............. 22,103 22,009 22,103
Western Digital Common Stock Fund..................... 1,150 19,378 36,355
International Stock Fund:
T. Rowe Price International Stock Mutual Fund...... 185 2,463 2,850
Small-Cap Value Fund:
T. Rowe Price Small-Cap Value Mutual Fund.......... 223 4,166 4,842
Science & Technology Fund:
T. Rowe Price Science & Technology Mutual Fund..... 271 8,287 8,243
Equity Income Fund:
T. Rowe Price Equity Income Mutual Fund............ 273 5,858 6,851
Spectrum Income Fund:
T. Rowe Price Spectrum Income Mutual Fund.......... 87 966 992
Western Digital Participant Loans..................... -- 4,195 4,195
-------- --------
$104,359 $129,395
======== ========
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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, 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
======== ========
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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, 1997 and 1998 and changes in net assets for
the years ended June 30, 1997 and 1998, allocated to the separate
investment funds are shown below.
Net assets available for Plan benefits by fund (in thousands):
June 30, 1997
----------------------------------------------------------------------------------
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 .. $ 15,505 $ 4,027 $ 23,432 $ 22,103 $ 36,355 $ 2,850 $ 4,842
Cash and cash equivalents ...... 53 11 -- 1,539 6 -- --
Receivables
Participants' contributions ... 109 60 136 148 132 51 67
Employer's contribution ....... 37 20 44 50 39 16 20
Employer's profit sharing
contribution ............... 647 348 896 2,254 998 242 356
-------- -------- -------- -------- -------- -------- -------
16,351 4,466 24,508 26,094 37,530 3,159 5,285
Interfund receivable(payable) .. 8 5 12 (67) 15 3 5
-------- -------- -------- -------- -------- -------- -------
Net assets available for
Plan benefits .................. $ 16,359 $ 4,471 $ 24,520 $ 26,027 $ 37,545 $ 3,162 $ 5,290
======== ======== ======== ======== ======== ======== ========
June 30, 1997 (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 .. $ 8,243 $ 6,851 $ 992 $ -- $ -- $ 4,195 $129,395
Cash and cash equivalents ...... -- -- -- -- -- -- 1,609
Receivables
Participants' contributions ... 156 94 16 9 4 -- 982
Employer's contribution ....... 45 30 5 2 1 -- 309
Employer's profit sharing
contribution ................ 709 498 114 61 19 -- 7,142
-------- -------- -------- -------- -------- -------- --------
9,153 7,473 1,127 72 24 4,195 139,437
Interfund receivable(payable) .. 9 6 2 1 1 -- --
-------- -------- -------- -------- -------- -------- --------
Net assets available for
Plan benefits ................. $ 9,162 $ 7,479 $ 1,129 $ 73 $ 25 $ 4,195 $139,437
======== ======== ======== ======== ======== ======== ========
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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, 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
======= ======= ====== ====== ==== ====== ========
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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, 1997
-----------------------------------------------------------------------------
Disci- Western Inter-
plined Blue Stable Digital national Small-Cap
Puritan Equity Chip Magellan Value Common Stock Value
Fund Fund Fund Fund Fund Stock Fund Fund Fund
-------- ------ ------ -------- ------- ---------- ------ ---------
Additions to net assets:
Participants' contributions......... $ 1,134 $ 177 $ 657 $ 1,562 $ 2,044 $ 1,612 $ 432 $ 655
Employer's contributions............ 320 38 147 440 555 329 99 144
Employer's profit sharing
contribution...................... 647 -- 348 896 2,254 998 242 356
Interest and dividend income........ 1,711 72 199 735 1,285 -- 55 195
Realized/unrealized gain (loss)..... 1,432 157 645 4,554 -- 18,705 357 635
------- ------ ------ ------- ------- ------- ------ ------
Total additions.................. 5,244 444 1,996 8,187 6,138 21,644 1,185 1,985
------- ------ ------ ------- ------- ------- ------ ------
Deductions from net assets:
Participant distributions paid...... 996 24 75 1,257 2,283 2,420 1 64
Net forfeitures transferred
out (in)........................... (25) (1) (11) (40) 144 (7) (7) (11)
------- ------ ------ ------- ------- ------- ------ ------
Total deductions................ 971 23 64 1,217 2,427 2,413 (6) 53
------- ------ ------ ------- ------- ------- ------ ------
Net interfund transfers.............. (2,037) (1,234) 86 (6,419) 1,895 5,357 531 1,156
------- ------ ------ ------- ------- ------- ------ ------
Increase (decrease) in net assets
available for Plan benefits..... 2,236 (813) 2,018 551 5,606 24,588 1,722 3,088
Net assets available for Plan
benefits at:
Beginning of year................. 14,123 813 2,453 23,969 20,421 12,957 1,440 2,202
------- ------ ------ ------- ------- ------- ------ ------
End of year....................... $16,359 $ -- $4,471 $24,520 $26,027 $37,545 $3,162 $5,290
======= ====== ====== ======= ======= ======= ====== ======
Year ended June 30, 1997 (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......... $ 1,585 $ 850 $ 248 $ 9 $ 4 $ -- $ 10,969
Employer's contributions............ 345 195 50 2 1 -- 2,665
Employer's profit sharing
contribution...................... 709 498 114 61 19 -- 7,142
Interest and dividend income........ 913 400 59 -- -- 349 5,973
Realized/unrealized gain (loss)..... (83) 927 32 -- -- -- 27,361
------- ------ ----- ----- ----- ----- --------
Total additions.................. 3,469 2,870 503 72 24 349 54,110
------- ------ ----- ----- ----- ----- --------
Deductions from net assets:
Participant distributions paid.... 96 65 1 -- -- 52 7,334
Net forfeitures transferred
out (in)......................... (23) (13) (4) (1) (1) -- --
------- ------ ----- ----- ----- ----- --------
Total deductions............... 73 52 (3) (1) (1) 52 7,334
------- ------ ----- ----- ----- ----- --------
Net interfund transfers............. (646) 1,251 60 -- -- -- --
------- ------ ----- ----- ----- ----- --------
Increase (decrease) in net assets
available for Plan benefits.... 2,750 4,069 566 73 25 297 46,776
Net assets available for Plan
benefits at:
Beginning of year................ 6,412 3,410 563 -- -- 3,898 92,661
------- ------- ------- ----- ----- ------ --------
End of year...................... $ 9,162 $ 7,479 $ 1,129 $ 73 $ 25 $4,195 $139,437
======= ======= ======= ===== ===== ====== ========
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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, 1997 (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
======= ======= ====== ====== ====== ====== ========
17
18
SCHEDULE I
WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1998
(IN THOUSANDS)
Identity of Issuer, Borrower, Description of Investment, Current
Lessor or Similar Party Including Collateral or Par Value Cost Value
- ----------------------------- --------------------------------- --------- ---------
Fidelity Retirement Services 880 shares Fidelity Puritan Mutual Fund $ 15,195 $ 18,597
Fidelity Retirement Services 163 shares Fidelity Blue Chip Mutual Fund 5,956 7,651
Fidelity Retirement Services 287 shares Fidelity Magellan Mutual Fund 24,161 31,516
* T. Rowe Price Trust Company 25,372 shares T. Rowe Price Stable
Value Mutual Fund 25,372 25,372
* T. Rowe Price Trust Company 213 shares T. Rowe Price International
Stock Mutual Fund 2,973 3,252
* T. Rowe Price Trust Company 310 shares T. Rowe Price Small-Cap
Value Mutual Fund 6,476 7,437
* T. Rowe Price Trust Company 340 shares T. Rowe Price Science
& Technology Mutual Fund 10,461 10,777
* T. Rowe Price Trust Company 412 shares T. Rowe Price Equity
Income Mutual Fund 9,774 11,232
* T. Rowe Price Trust Company 215 shares T. Rowe Price Spectrum
Income Mutual Fund 2,487 2,536
* T. Rowe Price Company 144 shares T. Rowe Price Equity Index Trust
Mutual Fund 3,624 4,199
Warburg Pincus Funds 33 shares of Warburg Pincus Small Company
Growth Portfolio Mutual Fund 503 525
* Western Digital Corporation 1,303 shares common stock; $.01 par value 26,263 15,392
* Plan Participants 854 participant loans with annual interest
rates ranging from 7% to 10% 5,147 5,147
--------- ---------
$ 138,392 $ 143,633
========= =========
- ------------------
* 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
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, 1998
Original Amount Report Amount Overdue
Identity of Amount Received Year Unpaid Issue Maturity Interest -------------------
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 $ 5
Ledbetter, Letty 5 -- -- 4 1/18/94 2/15/99 7.00% 4 --
Tinajero, Michelle S. 2 -- -- 2 8/16/96 9/14/99 9.25% 2 --
Flores, Caroline J. 10 -- -- -- 2/19/93 3/5/96 7.00% -- --
Drown, Marlys I. 3 -- -- 1 3/17/93 4/15/96 7.00% 1 --
Wollum, Glenn E. 17 -- -- 16 10/23/95 11/1/99 10.00% 16 3
Ibale, Federico Y. 10 -- -- 8 4/1/95 6/9/00 9.50% 8 1
Tran, Tot T. 2 -- -- 1 6/2/93 5/30/97 7.00% 1 --
Moore, Barbra L. 12 -- -- 5 12/11/92 12/12/97 7.00% 5 --
Trussell, David M. 9 -- -- 7 3/1/95 5/12/00 9.50% 7 1
Huang, Lipson S. 16 -- -- 15 7/25/94 12/17/04 8.25% 15 6
Rachapaetayakom, Benjarong 3 -- -- 3 2/1/95 3/31/00 9.50% 3 1
Vu, Chinh L. 3 -- -- -- 9/29/93 10/01/96 7.00% -- --
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, 1998
Current
Expense Value of
Incurred Asset on Net
Identity of Purchase Selling Lease with Cost of Transaction Gain
Party Involved Description of Asset Price Price Rental Transaction Asset Date (Loss)
- -------------- ------------------------------- -------- ------- -------- ----------- ------- ----------- ------
Series of Transactions in Excess of 5% of Current Value of the Plan's Assets (in thousands):
Fidelity Retirement Services Fidelity Magellan Mutual Fund $ 8,495 $ -- $ -- $ -- $ 8,495 $ 8,495 $ --
Fidelity Retirement Services Fidelity Magellan Mutual Fund 4,848 5,558 -- -- 4,848 5,558 710
Western Digital Corporation Common Stock 27,260 -- -- -- 27,260 27,260 --
Western Digital Corporation Common Stock 20,422 25,112 -- -- 20,422 25,112 4,690
T. Rowe Price Trust Company T. Rowe Price Stable Value
Mutual Fund 24,762 -- -- -- 24,762 24,762 --
T. Rowe Price Trust Company T. Rowe Price Stable Value
Mutual Fund 21,516 21,516 -- -- 21,516 21,516 --
T. Rowe Price Trust Company T. Rowe Price Science
& Technology Mutual Fund 6,149 -- -- -- 6,149 6,149 --
T. Rowe Price Trust Company T. Rowe Price Science &
Technology Mutual Fund 3,985 4,084 -- -- 3,985 4,084 99
T. Rowe Price Trust Company T. Rowe Price Equity Income
Mutual Fund 6,133 -- -- -- 6,133 6,133 --
T. Rowe Price Trust Company T. Rowe Price Equity Income
Mutual Fund 2,306 2,539 -- -- 2,306 2,539 233
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