Bob Blair John F. Coyne - Chief Executive Officer, Executive Director and Chairman of Executive Committee Stephen D. Milligan - President Wolfgang U. Nickl - Chief Financial Officer and Senior Vice President

Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division Richard Kugele - Needham & Company, LLC, Research Division Keith F. Bachman - BMO Capital Markets U.S. Nehal Sushil Chokshi - Technology Insights Research LLC Sherri Scribner - Deutsche Bank AG, Research Division Mark S. Miller - Noble Financial Group, Inc., Research Division Cindy Shaw - DISCERN Investment Analytics, Inc Mark A Moskowitz - JP Morgan Chase & Co, Research Division Ananda Baruah - Brean Murray, Carret & Co., LLC, Research Division

Good afternoon, and thank you for standing by. Welcome to Western Digital's Fourth Quarter Financial Results for Fiscal Year 2012. [Operator Instructions] As a reminder, this call is being recorded. Now I will turn the call over to your host, Mr. Bob Blair. You may begin.

Thank you. I want to mention that we will be making forward-looking statements on our comments and in response to your questions today concerning growth in the storage industry, hard-drive demand from the September quarter and fiscal '13 and our financial results expectations for the September quarter and fiscal '13. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially, including those listed in our 10-Q filed with the SEC on May 9, 2012. We undertake no obligation to update our forward-looking statements to reflect new information or events. In addition, references will be made during this call to non-GAAP financial measures. Reconciliations of the differences between the historical non-GAAP measures we provide during this call to the comparable GAAP financial measures are included in the investor information summary posted in the Investor Relations section of our website. The forward-looking guidance we provide during this call excludes certain items such as amortization of intangibles and the diluted impact of sales of drives to Toshiba in connection with our divestiture transaction. Because the amount of these items is not fully known to us at this time, we are unable to provide guidance for or a reconciliation to the most directly comparable GAAP financial measures. The impact of these excluded items may cause the estimated non-GAAP financial measures to differ materially from the comparable GAAP financial measures. [Operator Instructions] I also want to note that copies of remarks from today's call will be available on the Investors section of Western Digital's website immediately following the conclusion of this call. I'll now turn the call over to Western Digital's Chief Executive Officer, John Coyne. John F. Coyne: Thank you, Bob, and good afternoon, everyone. With me are President, Steve Milligan; and Chief Financial Officer, Wolfgang Nickl. To begin, I want to thank all our employees for their extraordinary achievements in one of the most challenging and exciting years in our 42-year history. While responding to 2 major natural disasters and completing the largest acquisition in the history of the industry, we achieved revenue growth of over 31% and more than doubled earnings. Turning to the market. June quarter demand was in line with our forecast of late April. Industry shipments reached 157 million units, bringing total hard drive shipments for the year to 599 million units. Our WD and HGST teams both performed ahead of plan in Q4, with consistent execution, delighting customers with compelling and high-quality products and flexible service. As a result, we delivered strong revenue, gross margin and cash flows. In formulating our outlook for fiscal 2013, which we will share with you today, we considered many factors: We took into account several broad trends such as the soft macroeconomic environment, the growing use of tablets and smartphones and a modest expectation for the initial acceptance of Windows 8 and Ultrabooks. Consequently, our planning assumption for unit growth and hard-drive demand is a 5%. We considered several Western Digital specific factors: First, due to the regulatory requirements to operate WD and HGST as separate subsidiaries for at least 2 years, we do not expect any significant OpEx synergies in that timeframe; second, our experience since completing the HGST acquisition has demonstrated customers' continued appreciation of the respective strengths of our WD and HGST subsidiaries; third, following 4 months of experience, we have confirmed the robustness and predictability of HGST's business operations, processes and controls; fourth, each subsidiary has multiple opportunities to further improve its cost structure, by ramping newer areal density platforms throughout the fiscal year and by making continued progress on cost optimization and the recovery from flood-related cost issues. Taking all this into account, we believe that Western Digital can deliver non-GAAP earnings per share of $10 in fiscal '13. Storage continues to be at the center of the evolving digital universe: In entertainment, education, commerce and communication. WD and HGST continue to focus on serving this market with a broad and expanding portfolio of products. We believe a strategy of delighting customers, focusing investments in faster growing market segments and driving strong execution in both internal operations and our supply chain will continue to deliver consistent and superior financial performance. Steve Milligan will now cover the operational highlights of our Q4 performance. Steve? Stephen D. Milligan: Thanks, John. When we announced the acquisition of HGST in March 2011, we emphasized the potential for strong financial returns. We believe the consolidated June quarter financial results provide a compelling early proof point. Both WD and HGST have a heritage of developing strategic and collaborative customer relationships, underpinned by innovative products, great technology and consistent execution. We are very pleased with the momentum we have maintained in the marketplace as we continue to focus on helping our customers succeed by developing and delivering great products across all segments of our business. We delivered strong financial performance in the June quarter, with consolidated revenue of $4.8 billion. Crisp execution and healthy profitability generated strong cash flows. Our subsidiaries also independently managed their build plans to the prevailing demand environment. We shipped a total of 71 million units or 48 million terabytes of storage into the market in the June quarter. The segment mix of the consolidated results for the 2 subsidiaries demonstrates a very healthy balance. In total, Western Digital shipped 7.9 million hard drives into the enterprise market; 54 million hard drives into the client space, including notebook and desktop; 4.2 million hard drives into the consumer electronics segment, including DVR, gaming and automotive applications; and 5 million hard drives for branded products. We also shipped 1 million non-HDD units including solid state drives, media players and routers. It is worth noting that our aggregate shipments of nearly 8 million hard drives to enterprise customers demonstrates continued momentum by both HGST and WD in this highly strategic space. As expected, WD's industry-leading branded products business rebounded in the June quarter from its post-flood downturn with exciting new products. On the operations front, WD began production in its new slider fabrication facility in Malaysia, and both subsidiaries improved efficiencies and reduced cost from flood-induced levels. It is also important to note that both WD and HGST continue to invest in new product development. During the fourth quarter, several innovations were delivered to customers including some important new market entries: Specifically, the WD branded products group advanced its connected home strategy with entry into the wireless home networking business, launching its family of My Net routers. It also added new software and services, including the WD 2go personal cloud mobile app with Dropbox integration. On the component side, WD introduced its WD Red series, the industry's first hard drives specifically designed for home and small office NAS systems. To address demand for thin and light devices, HGST continued to leverage its first-mover advantage with its 2.5-inch, 7-millimeter drives. More than 46 million of these particular drives have shipped since product inception. Continuing its leadership position in enterprise storage, HGST demonstrated the industry's first 12 gigabit per second SAS solid state drive. In a departure from Western Digital's long-standing tradition of announcing new products only as they ship, we plan on providing a preview of some exciting innovations at our Investor Day on September 13th. I look forward to seeing many of you at that time. I would now like to turn the call over to Wolfgang for his financial reports. Wolfgang U. Nickl: Thank you, Steve. I will first summarize our consolidated financial performance for last quarter and will then provide a range of expected financial results for the September quarter. The revenue for the June quarter was $4.8 billion. We shipped a total of 71 million hard drives into the market at an average selling price of $65. Both unit volume and average selling price exceeded the expectations that were implied in our guidance. OEM sales represented 69% of revenue, distribution channel sales were 21% and retail sales were 10%. Our gross margin for the quarter was 31%. This includes $39 million of amortization expense related to acquired intangible assets. Excluding this, non-GAAP gross margin was 31.8%. Non-GAAP gross margin came in better than the implied gross margin in our guidance due to lower-than-expected price declines and better-than-expected shipment linearity. R&D and SG&A spending totaled $584 million for the June quarter. SG&A included $12 million of amortization expense related to intangibles recorded through the purchase price allocation. Incremental OpEx versus our guidance reflect higher attainments on our variable compensation program. In order to better align our production with anticipated market demand, we took certain resizing actions that resulted in $80 million of restructuring charges in the June quarter, consisting of $72 million related to fixed assets and $8 million for severance. Net interest and other non-operating expense was $7 million. This includes $4 million of gains on investments. Tax expense for the June quarter was $56 million or 7% of pretax income. Our net income for the June quarter totaled $745 million or $2.87 per share. On a non-GAAP basis, net income was $872 million or $3.35 per share. Turning to the balance sheet. We generated $1.1 billion in cash from operations during the June quarter and our free cash flow totaled $804 million, reflecting better-than-expected profitability, solid shipment linearity, a reduction in inventory and reduced capital expenditures. Our conversion cycle was a positive 2 days. This consisted of 45 days of receivables, 34 days of inventory, or 11 turns, and 77 days payables. Capital spending and depreciation and amortization for the June quarter totaled $324 million and $339 million, respectively. Capital expenditure for fiscal '12 totaled $717 million. Depreciation and amortization for fiscal '12 totaled $825 million. During the June quarter, we made a scheduled $58 million principal payment on our term loan and also repaid the $500 million line of credit that was drawn during the HGST acquisition. In addition, we used $604 million to repurchase 16.4 million shares. As announced in May, our Board approved an increase of $1.5 billion in our stock purchase authorization. As of the end of last quarter, $1.3 billion remained available for future purchases. We exited fiscal Q4 with total cash and cash equivalent of $3.2 billion of which $1.5 billion was in the U.S. Subtracting our total debt of $2.2 billion dollars results in a net cash balance of $1 billion. I will now provide our guidance for the September quarter: We expect TAM to be flat with the prior quarter; revenue to be in the range of $4.2 billion to $4.3 billion; gross margin to be 30%, excluding the amortization of intangibles and a 50 basis point dilutive impact of sales of drive to Toshiba; R&D and SG&A spending to be approximately $550 million, excluding the amortization of intangibles, as we continue to operate HGST and WD as independent subsidiaries; a tax rate of approximately 8.5%; and a share count of approximately 253 million. Accordingly, we estimate non-GAAP earnings per share of between $2.45 and $2.55 for the September quarter. Operator, we are now ready to open the call for questions.

[Operator Instructions] And our first question comes from Aaron Rakers with Stifel, Nicolaus. Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division: First question. As we think about the $10 number that you're now throwing around out there and you talk about the lack of synergies due to the MOFCOM regulatory requirements, relative to your $550 million OpEx guide that you've laid out, can you help us understand what that $10 number reflects as far as how we should think about the OpEx without any synergies in the model? Put another way, is $550 million the high watermark, is that how we should model kind of quarterly OpEx to get to that $10 number? Wolfgang U. Nickl: Aaron, let me give you a bit more context and summarize what we said. The base assumption is a market that's growing approximately 5% from a unit volume perspective. We anticipate our share to be roughly flat in the fiscal year. From an OpEx perspective, like John and I mentioned, we do not expect synergies when compared with the current level of OpEx, might be up or down a little bit. But in average, you should assume what we guided for in Q1. As it relates to the tax rate, I think the 8.5% that we gave you for Q1 is probably a good proxy for the year as well. We're planning to change our approach to share repurchases, where we did more opportunistic share repurchases in the past, we are now switching over to more systematic share purchases. And when you compute all these numbers together, you're coming to a gross margin that's roughly about 30%, give or take. So those are the major assumptions. But from an OpEx perspective, you should assume the OpEx to be roughly flat with what we guided for. Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division: And then as a follow up, if my math is correct, it looks like you guys were averaged blended capacity per drive of roughly 150 gigabytes. Can you talk about that relative to where that compares to the overall industry. Are you back to normal or is there a little bit more to come as far as returning back to a normal industry average capacity per drive perspective? John F. Coyne: Well, the number was actually 681. Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division: I'm sorry, my math's wrong. John F. Coyne: Okay. And that is pretty much back into industry mix.

The next question comes from Rich Kugele with Needham & Company. Richard Kugele - Needham & Company, LLC, Research Division: In terms of just understanding then your ability to produce using your own heads, John, are you where you want to be internally or do you think that it will be a couple more quarters? You said, you brought the Malaysian facility online, but is it back to where you want in terms of an internal versus external mix? Stephen D. Milligan: I think -- Rich, I'll take that. This is Steve. But I think that -- we've obviously got different fosters, if you want to call it that, depending upon which subsidiary you're talking about. HGST has filed with a model of whether it will be 80%, 90% internal, 10%, 20% external purchases. WD has got kind of a similar model. Obviously, that became overweighted in terms of the recovery from the flood. And as John and Wolfgang alluded to, we've still got a variety of different things that we need to do as an organization to get to pre-flood kind of levels from a cost perspective. And certainly returning to that kind of blend will be something that we'll be looking to do as we progress into the future. Richard Kugele - Needham & Company, LLC, Research Division: Okay. And then just, Wolfgang, in terms of the Toshiba comment about the drag on gross margins, can you just elaborate a little bit more on how that works. Are you not allowed to get a margin like a contract manufacturer would on the drives or why would there be a drag per se? Wolfgang U. Nickl: Yes, you're right, Rich. There is, for a certain period of time, certainty this quarter, a little bit what's included in the last quarter as well and then probably the December, March quarter, as well as we transition the 3.5-inch equipment over to Toshiba, we are building drives for them on a contract manufacturer margin basis and that is dilutive on, as I said, in the quarter. We just ended at about 50 basis points. Richard Kugele - Needham & Company, LLC, Research Division: But the units are included in your total unit number or no? Wolfgang U. Nickl: No. Stephen D. Milligan: No. Because we don't want to double count them with Toshiba, right? As they ship them through. Richard Kugele - Needham & Company, LLC, Research Division: And then just lastly, relative to all the noise that was kind of going on in the channel, you said -- or going on the sell side about the channel, you said that your shipments were actually linear to the quarter. Can you just talk about what you saw in the channel and was there really 30% plus week-on-week inventory changes? Can you just talk about what was really going on in the channel in June. Stephen D. Milligan: Yes, we don't recognize any of those numbers, and in fact, our channel inventories continue to be below 4-week level.

Keith Bachman with Bank of Montréal. Keith F. Bachman - BMO Capital Markets U.S.: Just a clarification and a question. Did you say that Toshiba was coming out of the gross margins, the 30% guidance that was excluded? Wolfgang U. Nickl: That's correct. In a different number of the Toshiba effect is included. Keith F. Bachman - BMO Capital Markets U.S.: Then my question is when you think about your guidance for $10, you indicated that your share is roughly flat. So I wanted to just hear your reaction to some of the comments Toshiba's made and specifically indicating that it wants to grow its share and is willing to invest both directly and indirectly. How do we reconcile those statements, because I assume that Seagate is going to want to keep its share. How do we reconcile those statements? John F. Coyne: This is John. Market share is a reflection of the extent of how we delight our customers on a consistent and continuous basis. We earn market share on a daily basis as we execute a strength, long-term strength, of WD and an exhibited strength of HGST in the past several years has been providing the right products in the right way at the right time with the right value proposition to customers. And we believe we can continue to earn that share of business in a competitive marketplace throughout the upcoming year and we're modeling our business on that basis. Keith F. Bachman - BMO Capital Markets U.S.: Okay. Well, I'll ask one last one then I'll certainly yield the floor. In terms of the unit growth -- thanks for that perspective on guidance. Is there any calibration point that you could offer on what you think general pricing trends will be over that same period? And that's it for me. Stephen D. Milligan: I think that pricing is always one of the more difficult variables to predict in our business. And so we're going to continue to expect it to be, I'll call it, a competitive business. But I think that what -- there's a recognition from our standpoint when we look at pricing that, as John alluded to, there are a number of different factors that are impacting demand. One of the things that is not impacting demand, from our perspective, is the level of disk drive pricing, right? And there's arguably no reason to go and just transfer dollars to not create any elasticity. Right? And so we'll continue to provide the appropriate value to our customers, which includes, yes, you have to make adjustments in your pricing, but we're going to do that in a prudent fashion that ultimately allows for value creation not only from our perspective but also value creation for our customers.

The next question comes from Nehal Chokshi with Technology Insights Research. Nehal Sushil Chokshi - Technology Insights Research LLC: I have 2 questions. One, can you first review what the shipments were for the industry segments? And I have a follow-on question. Not for WD specifically. John F. Coyne: You're looking for total industry, yes. Nehal Sushil Chokshi - Technology Insights Research LLC: Yes. Stephen D. Milligan: Wolfgang is digging it out. Wolfgang U. Nickl: I can give you a flavor there, it was a total of 157 million units, as John said. We're about 82 million, 2.5-inch drive; 65 million, 3.5-inch drives; ATA that were about 17 -- they were about 9 million performance enterprise drives and then there were a few 1.8-inch that were shipped. Nehal Sushil Chokshi - Technology Insights Research LLC: Okay. So given the performance of the nearline drives and the performance of the client drives, can you talk about what your understanding is of the potential for a cannibalization of, say, a tablet without a hard drive to be transferred into a nearline cloud drive. Is there an application? Is there a one-to-one transfer? Is it a little bit less than that? Can you discuss that? Stephen D. Milligan: I'm not quite sure I follow your question. Can you kind of clarify that a bit? Nehal Sushil Chokshi - Technology Insights Research LLC: Yes. Essentially, when a client drive is speced with a solid state drive instead of a hard drive. Do you see any sort of data that indicates that, that hard drive that has been displaced with a much lower capacity solid state drive that, that capacity is being transferred into a cloud-based drive given the industry data that you're seeing here. Stephen D. Milligan: Well, I mean, that's a hard question to answer in a real simple way. I mean, I think what we're undoubtedly seeing across the industry and its not just call it "the hard drive industry," but we continue to see a tremendous amount of growth in data, right? For a variety of different reasons. And what we're seeing is a proliferation, which, by the way, there's always been a proliferation of storage devices that are used to store that increase in data, right? And so, undoubtedly, a large amount of data growth is going on in the cloud, right? No doubt about that. And we, we being Western Digital, as well as our separate subsidiaries, WD and HGST, are very well-positioned to take advantage of that in a number of different ways, whether it be the, on the HGST side, in terms of the tiering types of drives that we have, enterprise class, SSD on the front, traditional performance drives in the middle and fat drives on the back end. And then on the client side, yes, you're seeing some level of increased participation with solid state drives. But, by the way, that increased participation in pure SSD drives is not outside of our expectations, right? What we are saying, which is certainly benefiting our business, is an increased trend in terms of thin and light hard drives. So we talked about the 7-millimeter drives that, right now, both the WD sub and HGST sub have, that's being coupled up in some cases with solid-state, a dual drive configuration, that is allowing for the performance improvements or benefits that you get instant on whatever it might happen to be, coupled with the storage and cost benefit of a hard drive. And so it's a little bit difficult to answer your question in a direct fashion, but I think that the point is, is that all of this data growth is a good thing for all of us, and that what we've got to do is continue to provide the right level of innovation, the right level of products, interact with our customers in the right way, to continue to bring different solutions that address all these different applications. And so, it's actually, I think we're very optimistic in terms of our ability to be able to do that.

The next question comes from Sherri Scribner with Deutsche Bank. Sherri Scribner - Deutsche Bank AG, Research Division: Steve, nice to have you on an earnings call again. I wanted to ask about the MOFCOM details that you talked about last quarter. I think you had hoped to get some concessions from MOFCOM in terms of pieces of the business that you could combine versus pieces of the business you obviously couldn't combine over the next couple of years. Could you give us an update on any progress you've made there. John F. Coyne: Our conclusion that we will continue to operate the businesses as separate subsidiaries at least through the 2-year initial remedy requirement under MOFCOM and our expectation that we will not achieve measurable synergies in the OpEx environment, that gives you an update on where we are in clarification of the understanding between ourselves and MOFCOM as to how we will operate during the 2-year restriction period. Sherri Scribner - Deutsche Bank AG, Research Division: Okay. And then now that we're seeing some additional revenue coming from other segments like SSD and you've also mentioned the Toshiba business, which will be in for a couple of quarters, will you be breaking out a non-HDD revenue number? Did you give that this quarter and will you be giving that going forward? Wolfgang U. Nickl: We haven't decided yet. We're not spelling it out for this quarter beyond what Steve mentioned that it was a 1 million unit in shipments. Stephen D. Milligan: Hopefully, well, because we want it to be big enough so that we'll have to. Sherri Scribner - Deutsche Bank AG, Research Division: This seems like it's impacting the ASP [ph] a little bit in terms of the calculation. So it will be helpful.

Next question we have from Mark Miller with Noble Financial Capital Markets. Mark S. Miller - Noble Financial Group, Inc., Research Division: I wonder if Steve could refresh our memory in terms of what enterprise shipments were by HGST in the year-ago period. Stephen D. Milligan: You know, Mark, I honestly don't know. And so I don't have the specific number in front of me. But I can tell you and we've been very fortunate with, and I'm speaking now in the HGST side of being able to meaningfully improve our market position in the enterprise base, both in terms of traditional performance enterprise, as well as capacity enterprise and certainly something that we're very pleased with. And we want to maintain that position. We want to improve that position. We want to continue to deepen our relationships from the customer perspective. And so I apologize for not having that specific number in front of me. But I do know that it has improved rather markedly over the last 12 months. Mark S. Miller - Noble Financial Group, Inc., Research Division: Your cost of goods sold per drive unit remains high, but some of that's flood effect. And I'm just wondering how much of a upside in terms of continued strong margins, is that going to be significant next year? Are you going to be able to significantly pull those costs down? Wolfgang U. Nickl: You're right. In the Q4 numbers that we just reported there was for both subs, but in particular for the WD sub, that was mostly impacted by the flood. There was a sort of significant cost disadvantage when compared with pre-flood levels and that has to do with absorption, that has to do with higher external content, that has to do with freight modes that we use and other things, and you should assume that it's a significant opportunity going forward and that we will walk ourselves through that over the next couple of quarters. Mark S. Miller - Noble Financial Group, Inc., Research Division: Certainly doesn't appear so, but your competitor announced significant component supply issues or problems, it doesn't look like you had any problem. You were able to navigate that issue, is that correct? John F. Coyne: Yes, we haven't. There's always occasional this, that and the other thing, but nothing significant. Mark S. Miller - Noble Financial Group, Inc., Research Division: And the supply components of the channel, is that basically back to pre-flood levels or are there any bottlenecks or anything like that in the channel? John F. Coyne: I think we're pretty much, both in terms of the mix and quantity of drives, that we're in a position to make available to our customers, matches their needs and the component landscape is appropriate to support both plans.

Next comes from Cindy Shaw with DISCERN. Cindy Shaw - DISCERN Investment Analytics, Inc: Actually, I'd like to follow-up with more color. You did mention that there's -- it sounds like about 3 quarters worth of additional cost benefit to work off. I mean, I'm just wondering if you can give us more color in terms of things like, are you still sending things airfreight? At what point do you think you'll be back to that mix of internal versus external heads? How much of the cost increase that we have seen do you think is a more lasting effect versus how much do you think might be worked off, and even a range that you might be able to give us over the next few quarters will be great? Wolfgang U. Nickl: Like I said, I think we'll walk ourselves through everything by the end of the new fiscal year. Some of it is solvable more immediate like the freight mode and some of it like the component mix will take a little bit longer. We said we had multi-quarter agreements there. So it's a gradual improvement throughout the fiscal year. Cindy Shaw - DISCERN Investment Analytics, Inc: And can you give us a sense for how much -- there's been discussion also that some of the cost increases will be permanent because the supply chain will be more diversified? Can you give us a sense for how much we might think about that in terms of the cost? John F. Coyne: I think we've previously indicated that we expected the impact of that to be $1 to $2 a drive over the long haul in terms of that change in model for the business in terms of change in concentration model and the need to continue to invest in substantial incremental technology right throughout the supply chain as we move forward and address the challenges of delivering areal density on into the future. Cindy Shaw - DISCERN Investment Analytics, Inc: And then can you comment in terms of getting your production back online? Are you completely requalified on everything with all your customers? Has there been any sort of shift? I know one of your suppliers was talking months ago that there's going to be a big shift in areal density in the new equipment that was brought back up and the new process was brought back up. Is there more to go there or is that pretty much behind you as you brought the new capacity back up to the level it's at? Stephen D. Milligan: That's pretty much all behind us thanks.

Mark Moskowitz with JPMorgan. Mark A Moskowitz - JP Morgan Chase & Co, Research Division: I wanted to see if we can go back to ASPs. Just to give us a kind of a better understanding of some of the puts and takes. Because I imagine that the blended ASP benefited from a higher mix of enterprise drives this quarter, just given the contribution of growth from a unit perspective from the enterprise. So I wanted to understand that. And then the second part to that question is really about the ASP takedowns that you kind of telegraphed during the last earnings call. Were they kind of inline with your expectations? Were they more severe or less severe, and how should we think about that going into September quarter? Wolfgang U. Nickl: Let me add a few points on that. First of all, to put the LTA that we mentioned, those are all done. There were certain short term agreements. Those are all behind us. The second thing that's important to point out and that we alluded to is that WD as a response to the -- with significant impact to the flood, had increased the prices to the highest level, and we believe in Q1 has clearly met the [indiscernible] on OEM pricing again. Last quarter, pricing actually came in better than expected. You see that with the major impact of our overachieving of the EPS. And that had to do with the differential between channel pricing and OEM pricing. In the flood, the spot markets increased much more than the OEM markets and the teams were very, very disciplined to manage shipments linearity. And like Steve said, the inventories are extremely tightly managed to sub 4 weeks and that includes in transit. But we were able to maintain that spread between the markets a bit better than we thought when we gave the guidance for the quarter. For Q1, implied in our guidance is a mix. Obviously, it includes now our position in the market and enterprise drives. It has our subsidiaries at market pricing for OEMs. And it assumes that the distribution pricing gets into the normal range to the OEM pricing. Stephen D. Milligan: Yes and Mark, this is Steve. Let me add a little bit of a perspective, which I don't mean this in a disrespectful way. But I've been away from the earnings kind of stuff a little bit, but I think it's important that we -- one of the things generally technology prices come down over time, right? And so we are going to have a price declines and it's important. And we have to remind ourselves in terms of how we manage the business to do the same that you not become overly fixated on one particular data point or element of our business. And so we deal with price declines all the time. The question is rate and pace. And then the other thing is that, what we do need to deal with that? How do we manage our cost? How do we manage our mix? How do we introduce new products? How do we find other ways to add values to our customer? And at the end of the day, ultimately, it's our job to figure out how to factor that all in and deliver not only satisfactory products to our customers but a compelling return to our shareholders. Mark A Moskowitz - JP Morgan Chase & Co, Research Division: And my other question here is around Apple investments. Wolfgang, has there been any change in terms of the CapEx strategy as you go into fiscal 2013? Wolfgang U. Nickl: Yes, a few points there. First of all, you might have noticed that we came in a bit below what we said in the March quarter. We said 7 -- sorry, what we said in the May call. We said we'll be about 750. We came out at 717. We do also expect that we will not spend the full recovery capital that we indicated of 650 now because obviously, we're not bringing the capacity back to the same level. We earmarked that number at about $400 million as opposed to the $650 million. And for fiscal '13, our capital expenditure number will largely depend on what -- towards the end of the fiscal year, we expect the demand to be for [indiscernible] . But in general, you should assume that our capital spending for the fiscal year will be below the 7% to 8% that we guided to historically.

Next comes from Ananda Baruah with Brean Murray. Ananda Baruah - Brean Murray, Carret & Co., LLC, Research Division: Wolfgang, was just wondering you made mention on the call the aerial density ramps in coming quarters. I was wondering if you could comment on that. And, along with that, can you give us an update on when we should expect the ramp of single platter drives and where you are with that now? And anything else on the mix perspective that might service that tailwind to the gross margins going forward. Stephen D. Milligan: Yes. So let me take that question. So from a technology perspective, there's a few kind of key things that we're really focused on. The first thing is, and you alluded to it, is ramping to more competitive levels or cost competitive levels. The new areal density points whether that's a 500-gigabyte per platter on a 2.5-inch platform and then a terabyte for a 3.5-inch. And so our development teams, our respective development teams, are aggressively working on that ramp and we'll continue to see that transition. I mean, it is already actively in process, but we'll continue to see that occur over the course of this fiscal year. And then the maturity benefits of that from a cost perspective as we improve yields, et cetera. And so that's obviously a key area that we're focused on. The other thing is that, and we've already sort of alluded to this, but we want to continue to make sure that were investing from a product perspective on the opportunities that we see in terms of thin and light applications, whether that be in Ultrabooks or it be in Slimbooks, whatever you want to call them, where we think that we have the ability to continue to package drives in an effective way that allows us to ship into thinner devices. And then additionally, we want to continue the progress that we've made on the enterprise front. And so we're going to continue to invest meaningful dollars in expanding and improving our product portfolio in both subsidiaries so that we can continue to -- and to maintain our momentum, shall we say, in the enterprise area. And then, of course, lastly, is that we'll continue to invest in advanced areal density technologies whether that be shingle write or heat assist or energy assist, whatever you prefer calling. So those are really our priorities from a technology perspective. Ananda Baruah - Brean Murray, Carret & Co., LLC, Research Division: That's helpful. And I guess the follow-up is, Wolfgang, I think the word you used or the context you used on buyback that you would you move to be more methodical as opposed to opportunistic? And with the stock word in that, can you give us some sense of how opportunistic you may be willing to be versus methodical or what really we should take away from methodical? Wolfgang U. Nickl: Let me just say this. I mean, we got a significant increase in authorization. We took the opportunity to buy shares last quarter. We will be more systematic rather than opportunistic. We'll talk more to you at our September meeting about the exact details of the capital allocation strategy and I will leave at that for now. John F. Coyne: And thank you all for your participation in today's call. I'm very pleased with Western Digital's performance in fiscal '12, extending our 10-year record of compound annual revenue and EPS growth, the 19% and 48%, respectively. I'm excited to have such a strong and accomplished leadership team focused on the strategic development of our business to extend this long-term performance into the years ahead. And look forward to sharing our strategy and introducing the leadership to you at our upcoming Investor Day here in Southern California on September 13. Thank you.

Thank you. This does conclude today's conference. You may disconnect at this time. Have a great day.