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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 17. Quarterly Results of Operations (unaudited)
First Second Third Fourth
2012(1)
Revenue, net .............................................. $2,694 $1,995 $3,035 $4,754
Gross margin ............................................. 541 648 977 1,472
Operating income .......................................... 259 162 542 808
Net income ............................................... 239 145 483 745
Basic income per common share ............................... $ 1.03 $ 0.62 $ 2.00 $ 2.93
Diluted income per common share ............................. $ 1.01 $ 0.61 $ 1.96 $ 2.87
2011(2)
Revenue, net .............................................. $2,396 $2,475 $2,252 $2,403
Gross margin ............................................. 437 475 410 469
Operating income .......................................... 211 240 158 172
Net income ............................................... 197 225 146 158
Basic income per common share ............................... $ 0.86 $ 0.98 $ 0.63 $ 0.68
Diluted income per common share ............................. $ 0.84 $ 0.96 $ 0.62 $ 0.67
(1) The first, second and third quarters of 2012 included $14 million, $14 million and $34 million, respectively, of
expenses related to the acquisition of HGST, including debt commitment fees. The first quarter of 2012 included
$7 million of litigation contingencies. The second and third quarters included $199 million and $15 million of
charges related to the flooding, net of recoveries, respectively. The third quarter of 2012 included $91 million for
costs recognized upon the sale of inventory that was written-up to fair value. The third quarter of 2012 included
$16 million of tax effects related to the aforementioned costs related to inventory. The third and fourth quarters
of 2012 included $12 million and $51 million for the amortization of intangibles related to the acquisition of
HGST, respectively. The fourth quarter of 2012 included $80 million of impairment and other charges.
(2) The third quarter of 2011 included $10 million of expenses related to the acquisition of HGST. The fourth quar-
ter of 2011 included a $25 million accrual for litigation contingencies, $7 million of expenses related to the
acquisition of HGST, and $2 million of debt commitment fees related to the acquisition of HGST.
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