Western Digital 2008 Annual Report Download - page 3

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FELLOW SHAREHOLDERS:
Fiscal 2008 was an outstanding year for Western Digital,
demonstrating the effectiveness of our strategy and of our
enhanced business model.
Customer satisfaction with WD’s broad product line, high quality
and reliability, service excellence and overall value proposition
continues to drive our business growth. Underpinning our value
proposition is a business model based on a relentless focus on
highly effi cient operations, resulting in what we believe is the hard
drive industry’s most competitive total cost structure.
In fi scal 2008 we delivered outstanding fi nancial results, outpaced
the growing global hard drive industry, established technology
leadership in the 2.5-inch notebook and 3.5-inch desktop PC
markets, and completed and integrated the largest acquisition
in company history. As a result, we entered fi scal 2009 well
positioned to continue our profi table growth.
Our fi scal 2008 performance was noteworthy, including strong
year-over-year growth by many key measures:
• Shipments of hard drives increased 38 percent, to 133 million,
driven by signifi cant growth in new markets.
• Revenue grew 48 percent, to $8.1 billion.
• Operating income increased 142 percent, to $1.0 billion,
delivering on our stated goal of profi table growth.
• Earnings per share grew 54 percent, to $3.84, driving a
signifi cant increase in shareholder value.
• We increased our total capital and research and development
spending by 71 percent, to $1.1 billion.
• We completed our $1 billion acquisition of Komag, a leading
media supplier, resulting in WD being an even more vertically
integrated player that can better scale into fast-growing markets.
Our new media operation is already generating solid technology
and cost contributions to the overall business.
• We fi nished the year with $1.1 billion in cash and cash
equivalents, an increase of over $400 million.
John F. Coyne, President and Chief Executive Offi cer
REVENUE
Dollars in millions
$3,639
$3,047
$8,074
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
FY2004 FY2005 FY2006 FY2007 FY2008
$4,341
$5,468
Refl ecting strong performance in each of our served
markets, WD grew revenue by 48% year-over-year.
OPERATING INCOME
Dollars in millions
$195
$366 $415
$1,006
$154
$0
$200
$400
$600
$800
$1,000
$1,200
FY2004 FY2005 FY2006 FY2007 FY2008
WD’s fi scal 2008 operating income of $1.0 billion
provides evidence of our disciplined operational and
fi nancial performance and our continued execution.
EARNINGS PER SHARE
$0.90
$3.84
$1.76
$2.50
$0.69
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
FY2004 FY2005 FY2006 FY2007 FY2008
WD posted EPS of $3.84 for fi scal 2008, a 54%
increase from fi scal 2007.