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Note 12. Quarterly Results of Operations (unaudited)
The Company has adjusted its consolidated financial statements for fiscal 2006 and 2005 to record additional non-
cash stock-based compensation expense and related tax accruals resulting from stock options granted during fiscal years
1998 to 2003 that were incorrectly accounted for under U.S. GAAP (see Note 2). The following table summarizes the
quarterly impact of these adjustments on results of operations (in millions, except per share amounts):
Previously
Reported Adjustment
As
Adjusted
FISCAL YEAR ENDED JUNE 30, 2006
2006 — First Quarter
Revenue, net ................................................. $1,009.9 $1,009.9
Gross margin ................................................. 178.3 178.3
Operating income ............................................. 67.9 (0.2) 67.7
Net income .................................................. 68.8 (0.2) 68.6
Basic earnings per share ......................................... $ 0.32 $ 0.32
Diluted earnings per share........................................ $ 0.31 $ 0.31
2006 — Second Quarter
Revenue, net ................................................. $1,117.1 $1,117.1
Gross margin ................................................. 228.3 228.3
Operating income ............................................. 104.3 (0.2) 104.1
Net income .................................................. 104.3 (0.2) 104.1
Basic earnings per share ......................................... $ 0.49 $ 0.49
Diluted earnings per share........................................ $ 0.47 $ 0.47
2006 — Third Quarter
Revenue, net ................................................. $1,128.8 $1,128.8
Gross margin ................................................. 217.9 217.9
Operating income ............................................. 100.7 (0.5) 100.2
Net income .................................................. 102.9 (0.5) 102.4
Basic earnings per share ......................................... $ 0.47 $ 0.47
Diluted earnings per share........................................ $ 0.45 $ 0.45
2006 — Fourth Quarter(1)
Revenue, net ................................................. $1,085.5 $1,085.5
Gross margin ................................................. 204.3 204.4
Operating income ............................................. 93.9 93.9
Net income .................................................. 119.5 119.5
Basic earnings per share ......................................... $ .55 $ .55
Diluted earnings per share........................................ $ .53 $ .53
72
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)