Western Digital 2008 Annual Report Download - page 81

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Year Ended
June 27,
2008
Year Ended
June 29,
2007
Revenue ................................................... $8,183 $6,060
Net income ................................................ $ 850 $ 656
Basic net income per share ...................................... $ 3.85 $ 3.00
Diluted net income per share .................................... $ 3.76 $ 2.90
Note 12. Other Intangible Assets
Other intangible assets consist primarily of patented technology and customer relationships acquired in business
combinations and amortized on a straight-line basis over the respective estimated useful lives of the assets. The net
carrying value of intangible assets as of June 27, 2008 and June 29, 2007 was $81 million and $4 million, respectively.
Accumulated amortization of intangibles was $29 million and $13 million as of June 27, 2008 and June 29, 2007,
respectively. Intangible assets for 2008 are as follows:
Weighted Average
Amortization Period
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(in years) (in millions) (in millions) (in millions)
Existing technology ............. 9 $100 $26 $74
Customer relationships ........... 3 10 3 7
Total ........................ $110 $29 $81
Amortization expense for intangible assets was $16 million, $3 million and $4 million for 2008, 2007 and 2006,
respectively. As of June 27, 2008, estimated future amortization expense for intangible assets is approximately
$12 million per year for 2009 and 2010 and $9 million per year for 2011, 2012 and 2013.
Note 13. Quarterly Results of Operations (unaudited)
First Second Third Fourth
2008(1)
Revenue, net .......................................... $1,766 $2,204 $2,111 $1,993
Gross margin ......................................... 323 513 477 425
Operating income ...................................... 135 332 298 241
Net income .......................................... 69 305 280 213
Basic earnings per share .................................. $ 0.31 $ 1.39 $ 1.26 $ 0.96
Diluted earnings per share ................................ $ 0.31 $ 1.35 $ 1.23 $ 0.94
2007(2)
Revenue, net .......................................... $1,264 $1,428 $1,410 $1,367
Gross margin ......................................... 218 255 222 205
Operating income ...................................... 99 122 115 79
Net income .......................................... 103 128 121 212
Basic earnings per share .................................. $ 0.47 $ 0.58 $ 0.55 $ 0.97
Diluted earnings per share ................................ $ 0.46 $ 0.57 $ 0.53 $ 0.94
75
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)