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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2000
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
20511 Lake Forest Drive
Lake Forest, California 92630
<PAGE> 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
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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 18, 2000 By: TERESA HOPP
------------------------ ---------------------------------
Teresa Hopp
Chairperson of the Retirement
Plan Committee
3
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WESTERN DIGITAL CORPORATION
RETIREMENT SAVINGS AND PROFIT SHARING PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report............................................................. 5
Statements of Net Assets Available for Plan Benefits as of June 30, 1999 and 2000........ 6
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended June 30, 1999 and 2000....................................... 7
Notes to Financial Statements............................................................ 8-14
Schedule I -- Schedule of Assets Held for Investment Purposes ........................... 15
</TABLE>
All other schedules are omitted because they are not required by Department of
Labor regulations or are not applicable.
4
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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, 1999 and 2000 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 auditing standards generally accepted
in the United States of America. 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,
1999 and 2000, and the changes in net assets available for plan benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
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 is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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 schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
Orange County, California
November 30, 2000
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30,
----------------------
1999 2000
-------- --------
<S> <C> <C>
Assets
Investments, at current value: (Notes 1, 2, and 4)
Debt and equity securities .......................... $154,407 $151,015
Participant loans ................................... 4,692 3,546
-------- --------
Total investments ............................... 159,099 154,561
Cash and cash equivalents ............................... 113 --
-------- --------
Total assets .................................... $159,212 $154,561
======== ========
Net assets available for Plan benefits:
Available to terminated participants ................ $ 58,134 $ 79,870
Available to continuing participants ................ 101,078 74,691
-------- --------
Net assets available for Plan benefits .......... $159,212 $154,561
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
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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)
<TABLE>
<CAPTION>
Year ended June 30,
------------------------
1999 2000
--------- ---------
<S> <C> <C>
Additions to net assets:
Participants' contributions ........................ $ 13,501 $ 9,014
Employer's contributions ........................... 3,234 2,308
--------- ---------
Total contributions ............................ 16,735 11,322
Interest and dividend income ....................... 8,967 11,366
Realized/unrealized gain (loss) .................... 3,334 1,878
--------- ---------
Total investment income (loss) ................. 12,301 13,244
--------- ---------
Total additions ................................ 29,036 24,566
Deductions from net assets:
Participant distributions paid ..................... 13,520 29,217
--------- ---------
Increase (decrease) in net assets available
for Plan benefits .......................... 15,516 (4,651)
Net assets available for Plan benefits at
beginning of year ................................ 143,696 159,212
--------- ---------
Net assets available for Plan benefits at
end of year ...................................... $ 159,212 $ 154,561
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 2000
(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, 1999 and 2000 and
changes in net assets available for Plan benefits for the years ended
June 30, 1999 and 2000.
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, 1999 and
2000, the Plan held investments in mutual funds, which are reported at
fair market value. Purchases and sales of securities are recorded on a
trade-date basis. 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
accounting principles generally accepted in the United States of America
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
8
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Plan, up to the first 5% of the participant's compensation. Effective
January 1, 2000 the Plan was amended to limit the Company's aggregate
maximum matching contribution to $2,000 for any calendar year. The
Company may also make additional contributions at its discretion. The
Company may suspend matching contributions when it does not have
sufficient net profits to make the applicable matching contribution.
Contributions to the Plan are recorded as soon as administratively
possible after the Company makes payroll deductions from Plan
participants.
Investments
Participants designate their contributions, and those made by the
Company, for investment in any or all of the following funds:
<TABLE>
<CAPTION>
Fund Investment Strategy
---- -------------------
<S> <C>
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 The Stable Value Fund purchases shares in the T.
Fund 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
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 The Small-Cap Value Fund purchases shares in the
Value Fund T. Rowe Price Small-Cap Value Mutual Fund, which
invests primarily in common stock of
corporations with a market value of $500 million
or less.
Science & The Science and Technology Fund purchases shares
Technology in the T. Rowe Price Science and 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.
</TABLE>
9
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
Fund Investment Strategy
---- -------------------
<S> <C>
Equity Income The Equity Income Fund purchases shares in the
Fund T. Rowe Price Equity Income Mutual Fund, which
invests primarily in dividend-paying common
stock, particularly of established companies
with prospects for both increasing dividends and
capital appreciation.
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 that, 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
Growth Fund in the Warburg Pincus Small Company Growth
Portfolio Mutual Fund, which invests primarily
in common stock of small-sized domestic
corporations.
</TABLE>
As of June 30, 2000, 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 and 2000, the following investments represented
greater than 5% of the Plan's net assets (in thousands):
<TABLE>
<CAPTION>
Fund 1999 2000
---- ------- -------
<S> <C> <C>
Puritan Fund $18,810 $13,432
Blue Chip Fund 11,994 12,316
Magellan Fund 38,632 36,114
Stable Value Fund 26,773 23,877
Western Digital Stock Fund 13,984 11,186
Science & Technology Fund 16,536 29,170
Equity Income Fund 9,609 *
</TABLE>
*Investment did not represent greater than 5% of the Plan's net
assets.
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 2000 ranged from 7.0% to 10.5%.
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 (0% of eligible fiscal
year compensation in 1999 and 2000, 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 1999 and 2000, the
Company did not authorize any defined pre-tax profits to be allocated to
the participants and contributed $0 as profit sharing to the Plan.
11
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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, 1999 (in
thousands):
<TABLE>
<CAPTION>
Shares Current
Held Value
-------- --------
<S> <C> <C>
Puritan Fund:
Fidelity Puritan Mutual Fund ....................... 910 $ 18,810
Blue Chip Fund:
Fidelity Blue Chip Mutual Fund ..................... 220 11,994
Magellan Fund:
Fidelity Magellan Mutual Fund ...................... 298 38,632
Stable Value Fund:
T. Rowe Price Stable Value Mutual Fund ............. 26,773 26,773
Western Digital Common Stock Fund ..................... 2,151 13,984
International Stock Fund:
T. Rowe Price International Stock Mutual Fund ...... 211 3,297
Small-Cap Value Fund:
T. Rowe Price Small-Cap Value Mutual Fund .......... 229 4,533
Science & Technology Fund:
T. Rowe Price Science & Technology Mutual Fund ..... 336 16,536
Equity Income Fund:
T. Rowe Price Equity Income Mutual Fund ............ 330 9,609
Spectrum Income Fund:
T. Rowe Price Spectrum Income Mutual Fund .......... 236 2,637
Equity Index Trust:
T. Rowe Price Equity Index Trust ................... 194 6,956
Small Company Growth Fund:
Warburg Pincus Small Company Growth Portfolio
Mutual Fund ........................................ 40 646
Western Digital Participant Loans ..................... -- 4,692
--------
$159,099
========
</TABLE>
12
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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, 2000 (in
thousands):
<TABLE>
<CAPTION>
Shares Current
Held Value
-------- --------
<S> <C> <C>
Puritan Fund:
Fidelity Puritan Mutual Fund ..................... 713 $ 13,432
Blue Chip Fund:
Fidelity Blue Chip Mutual Fund ................... 198 12,316
Magellan Fund:
Fidelity Magellan Mutual Fund .................... 268 36,114
Stable Value Fund:
T. Rowe Price Stable Value Mutual Fund ........... 23,877 23,877
Western Digital Common Stock Fund ................... 2,237 11,186
International Stock Fund:
T. Rowe Price International Stock Mutual Fund .... 256 4,681
Small-Cap Value Fund:
T. Rowe Price Small-Cap Value Mutual Fund ........ 193 3,719
Science & Technology Fund:
T. Rowe Price Science & Technology Mutual Fund ... 471 29,170
Equity Income Fund:
T. Rowe Price Equity Income Mutual Fund .......... 269 6,232
Spectrum Income Fund:
T. Rowe Price Spectrum Income Mutual Fund ........ 217 2,292
Equity Index Trust:
T. Rowe Price Equity Index Trust ................. 161 6,186
Small Company Growth Fund:
Warburg Pincus Small Company Growth Portfolio
Mutual Fund ...................................... 72 1,810
Western Digital Participant Loans ................... -- 3,546
--------
$154,561
========
</TABLE>
13
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WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(5) PLAN AMENDMENTS
Effective January 1, 2000, the Plan was amended to clarify the
definition of an "Eligible Employee" and to specifically exclude
individuals employed as independent contractors and workers provided by
temporary staffing agencies. In addition, the Plan was amended to limit
the Company's aggregate maximum matching contribution to $2,000 per
employee for any calendar year.
(6) CHANGE IN DISCLOSURE REQUIREMENTS
During September 1999, the American Institute of Certified Public
Accountants issued Statement of Position 99-3, "Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters" ("SOP 99-3"). SOP 99-3 simplifies the disclosure
requirements for certain investments and is effective for plan years
ending after December 15, 1999. The Plan adopted SOP 99-3 during the
plan year ended June 30, 2000. Accordingly, certain information
previously required to be disclosed about participant-directed fund
investment programs is not presented in the Plan's 2000 financial
statements. The Plan's 1999 financial statements have been reclassified
to conform to current year's presentation.
14
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SCHEDULE I
WESTERN DIGITAL CORPORATION RETIREMENT SAVINGS AND PROFIT SHARING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
Identity of Issuer, Borrower, Description of Investment, Current
Lessor or Similar Party Including Collateral or Par Value Value
------------------------------ ------------------------------------------------- --------
<S> <C> <C>
Fidelity Retirement Services 713 shares Fidelity Puritan Mutual Fund $ 13,432
Fidelity Retirement Services 198 shares Fidelity Blue Chip Mutual Fund 12,316
Fidelity Retirement Services 268 shares Fidelity Magellan Mutual Fund 36,114
* T. Rowe Price Trust 23,877 shares T. Rowe Price Stable
Company Value Mutual Fund 23,877
* T. Rowe Price Trust 256 shares T. Rowe Price International
Company Stock Mutual Fund 4,681
* T. Rowe Price Trust 193 shares T. Rowe Price Small-Cap
Company Value Mutual Fund 3,719
* T. Rowe Price Trust 471 shares T. Rowe Price Science
Company & Technology Mutual Fund 29,170
* T. Rowe Price Trust 269 shares T. Rowe Price Equity
Company Income Mutual Fund 6,232
* T. Rowe Price Trust 217 shares T. Rowe Price Spectrum
Company Income Mutual Fund 2,292
* T. Rowe Price 161 shares T. Rowe Price Equity Index Trust
Company Mutual Fund 6,186
Warburg Pincus Funds 72 shares of Warburg Pincus Small Company
Growth Portfolio Mutual Fund 1,810
* Western Digital Corporation 2,237 shares common stock; $.01 par value 11,186
* Plan Participants 559 participant loans with annual interest
rates ranging from 7.0% to 10.5% 3,546
--------
$154,561
========
</TABLE>
* Parties in interest.
See accompanying independent auditors' report.
15
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WESTERN DIGITAL CORPORATION
RETIREMENT SAVINGS AND PROFIT SHARING PLAN
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Description Numbered Page
------- ----------- -------------
<S> <C> <C>
23. Consent of Independent Auditors........... 17
</TABLE>
16
