Western Digital 2009 Annual Report Download - page 45

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We also completed our acquisition of SiliconSystems resulting in a total acquisition cost of $66 million, consisting
of $65 million in cash paid to SiliconSystems shareholders and $1 million of other direct acquisition costs.
Summary Comparison of 2009, 2008 and 2007
The following table sets forth, for the periods presented, summary information from our consolidated statements of
income by dollars and percentage of revenue (in millions, except percentages):
July 3, 2009 June 27, 2008 June 29, 2007
Years Ended
Revenue, net ............................... $7,453 100.0% $8,074 100.0% $5,468 100.0%
Gross margin............................... 1,337 17.9 1,739 21.5 900 16.5
R&D and SG&A ............................ 710 9.5 684 8.5 485 8.9
Acquired in-process research and development ....... 14 0.2 49 0.6 — —
Restructuring and other, net .................... 94 1.3 — — — —
Operating income ........................... 519 7.0 1,006 12.4 415 7.6
Other income (expense), net .................... (18) (0.2) (25) (0.3) 28 0.5
Income before income taxes..................... 501 6.7 981 12.1 443 8.1
Income tax expense (benefit) .................... 31 0.4 114 1.4 (121) (2.2)
Net income ................................ 470 6.3 867 10.7 564 10.3
The following table sets forth, for the periods presented, summary information regarding volume shipments,
average selling prices (“ASPs”) and revenues by geography, channel and product (in millions, except percentages and
ASPs):
July 3,
2009
June 27,
2008
June 29,
2007
Years Ended
Net revenue ..................................... $7,453 $8,074 $5,468
Unit shipments* .................................. 146 133 97
ASPs (per unit)* .................................. $ 51 $ 59 $ 57
Revenues by Geography(%)
Americas...................................... 24% 31% 37%
Europe, Middle East and Africa...................... 27 30 29
Asia ......................................... 49 39 34
Revenues by Channel(%)
OEMs........................................ 54% 51% 48%
Distributors ................................... 26 31 36
Retailers ...................................... 20 18 16
Revenues by Product(%)*
Non-desktop sources ............................. 62% 56% 43%
Desktop hard drives .............................. 38 44 57
* Includes hard drive units only. Non-hard drive units were not significant.
Fiscal Year 2009 Compared to Fiscal Year 2008
Net Revenue. Net revenue was $7.5 billion for 2009, a decrease of 8% from 2008. Total unit shipments of hard
drives increased to 146 million as compared to 133 million for the prior year. The decrease in revenue primarily resulted
from a decline in our ASPs which reflects a more competitive pricing environment, particularly in the notebook and
branded markets. The decline in our ASPs was partially offset by an increase in unit shipments of 2.5-inch drives. We
shipped 56 million 2.5-inch drives in 2009 as compared to 37 million units in 2008. The increase in 2.5-inch unit
39