Robert Blair - Vice President of Investor Relations Stephen D. Milligan - Chief Executive Officer, President, Director and Chairman of Executive Committee Wolfgang U. Nickl - Chief Financial Officer and Executive Vice President

Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division Richard Kugele - Needham & Company, LLC, Research Division Steven Bryant Fox - Cross Research LLC Nehal Sushil Chokshi - Technology Insights Research LLC Ananda Baruah - Brean Capital LLC, Research Division Keith F. Bachman - BMO Capital Markets U.S. Joseph Wittine - Longbow Research LLC Daniel F. Garofalo - Piper Jaffray Companies, Research Division Sherri Scribner - Deutsche Bank AG, Research Division Amit Daryanani - RBC Capital Markets, LLC, Research Division Kathryn L. Huberty - Morgan Stanley, Research Division Robert Cihra - Evercore Partners Inc., Research Division Mark S. Miller - Noble Financial Group, Inc., Research Division

Good afternoon, and thank you for standing by. Welcome to Western Digital's Fourth Quarter Financial Results for Fiscal Year 2013. [Operator Instructions] As a reminder, this call is being recorded. Now I will turn the call over to Mr. Bob Blair. Thank you. You may begin.

Thank you. We will be making forward-looking statements in our comments and in response to your questions today concerning growth, the storage industry and our position and opportunities in the industry, industry demand for the September quarter, our production levels and capital expenditures, customer response to our product offerings and our financial performance, including our financial results, expectations for the September quarter. 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 3, 2013. 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 quarterly fact sheet 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 related to the HGST acquisition, certain tax-related matters, certain employee termination benefits and other charges. Because the amount of these items is not fully known to us at this time, we are unable to provide guidance for or 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. Until our acquisition of sTec closes, Western Digital and sTec remain independent companies. So we will not be taking any questions about sTec's business or its financial performance today. [Operator Instructions] I also want to note the copies of remarks from today's call will be available on the Investor section of Western Digital's website immediately following the conclusion of this call. I will now turn the call over to Steve Milligan, President and Chief Executive Officer of Western Digital. Stephen D. Milligan: Good afternoon, and thank you for joining us. After my opening remarks, Wolfgang Nickl will provide additional commentary on our June quarter results and outlook for the September quarter. I am pleased with our performance in the June quarter. Our financial results were strong, including significant free cash flow generation, reflecting outstanding execution by our HGST and WD subsidiaries. Industry demand in the June quarter was in line with our expectations, and we expect volume in the September quarter to be up modestly. Our production levels will be adjusted to prevailing demand conditions. Our growing participation in the storage market continues to highlight our broad-based role in the important and secular trend of digital data growth. We anticipate that the demand for exabytes of storage will grow by at least 34% per year through 2020, with exabytes shipped rising from 600 in 2012 to 5,900 in 2020. With advancements in storage, processing power, software and big data analytics, storage requirements are increasing significantly. There are thousands of new applications that are emerging based on new capabilities. An excellent example is the capability of one website that is processing 200 billion flight reservations to advise it's users when to optimally buy airline tickets. It is clear from applications like these that storage and the utilization of vast amounts of data are enabling breakthrough innovations, providing tangible support to underpin these data growth forecasts. Our goal is to innovate and differentiate our solutions to help our customers create value in this dynamic environment. Customers continue to respond favorably to the breadth of storage solutions we are providing. The Western Digital platform is unique, powerful and market-driven, underpinned by increasingly collaborative customer relationships, leveraging our rich engineering heritage and resources. For our fiscal year ended June, approximately 50% of our revenue was derived from applications in markets that are powering the public and personal cloud. While we are encouraged by recent innovations in the PC space, with less than half of our revenue as we exited fiscal 2013, the storage industry is experiencing dramatic change and we are participating in the high-growth markets of the future, investing in innovation and strategic acquisitions. In the last year, we have led the industry with the introduction of several new advanced solutions including our 7-disk helium sealed drives for cloud storage, our low-profile 5- and 7-millimeter solid-state hybrid drives and hard drives for ultra portable devices and new hard drive and mass solutions for small and medium businesses. All of these products have been well received by our customers. At our Investor Day last September, we indicated that we had established a strong position in enterprise solid-state storage with our family of SaaS-based SSD solutions. We also indicated that we were evaluating an expansion into other areas of this market. We concluded that solid-state storage will play an increasingly strategic role through continued innovation and differentiation. As a result, we recently made several important investments to strengthen and expand our enterprise SSD capabilities, including our proposed acquisition of sTec, an early pioneer in enterprise-class SSDs, the acquisition of VeloBit, a provider of high-performance storage I/O optimization software, and our investment in Skyera, a provider of very high-performance storage arrays. The sTec and VeloBit acquisitions will augment our existing technology position and IP portfolio in one of the industry's fastest growing markets. In summary, we are pleased with our performance and position in today's changing storage industry, and we are continuing to take steps that will enhance our ability to become one of the world's leading technology companies. I will now turn the call over to Wolfgang. Wolfgang U. Nickl: Thank you, Steve. We are pleased with our June quarter performance as it demonstrates the resilience and strength of our business model, our sustained strong execution and the continued change of our business mix. The HDD industry shipped approximately 133 million units during the June quarter, slightly down from the March quarter and in line with our expectations in late April. In our business, we saw strength in enterprise. Stable quarter-over-quarter performance inclined in consumer electronics and anticipated seasonal softness in branded products. On a year-over-year basis, our business mix reflects our strong participation in growing cloud-related markets, with capacity enterprise and branded products up significantly. Our distribution and retail channel inventory remains lean, and our analysis suggests that inventory levels at our OEM customers remain at reasonable levels. Revenue for fiscal year 2013 was $15.4 billion. Broad-based participation in the secular growth of digital data is resulting in a more diversified mix of our revenue. Over the last 5 years, our non-PC-related business has grown from 35% to 50% of our revenue. Among PC-related businesses, includes our enterprise, branded and consumer electronic businesses. Our revenue for the June quarter was $3.7 billion. We shipped a total of 59.9 million hard drives at an average selling price of $60. We exceeded our revenue guidance due primarily to better-than-expected business mix and lower-than-expected like-for-like price declines. Our gross margin for the quarter was 28.2%. Non-GAAP gross margin was 29.1%, excluding $35 million of amortization expense related to acquired HGST intangible assets. Non-GAAP gross margin was approximately 60 basis points better than our guidance, reflecting better-than-expected business mix and capacity utilization and lower-than-anticipated price declines. R&D and SG&A spending totaled $582 million for the June quarter. SG&A included $18 million of amortization expense related to acquired HGST intangible assets and other unrelated charges. We incurred charges of $8 million in the June quarter, reflecting continued alignment of our operations with anticipated market demand. Tax expense for the June quarter was $35 million or 7.8% of pretax income. Our net income for the June quarter totaled $416 million or $1.71 per share. On a non-GAAP basis, net income was $477 million or $1.96 per share. For fiscal year 2013, our net income totaled $1.7 billion or $6.75 per share. On a non-GAAP basis, net income was $2.1 billion or $8.53 per share. Turning to the balance sheet. We generated $684 million in cash from operations during the June quarter, and our free cash flow totaled $548 million. For fiscal year 2013, we generated $3.1 billion in cash from operations and our free cash flow totaled $2.2 billion. CapEx for the June quarter totaled $136 million. For the full fiscal year, we invested $952 million or 6.2% of revenue, including approximately $191 million for expenditures related to the floods in Thailand. Excluding the flood-related spending, we would have been at 5% of revenue, reflecting our measured approach to capital spending in the current demand environment. As part of our capital allocation strategy, first outlined last September at our Investor Day, we repurchased 4.4 million shares for $235 million during the June quarter. For fiscal year 2013, in total, we repurchased 19 million shares for $842 million. We also declared a dividend in the amount of $0.25 per share or a total of $59 million during the June quarter. In total, we declared a dividend of $1 per share or a total of $240 million during fiscal year 2013. We exited Q4 with total cash and cash equivalents of $4.3 billion, of which $1.5 billion was in the U.S. As disclosed in our press release, our financial information for the June quarter does not include any additional accruals as a result of the decision of the Minnesota Court of Appeals. We're in the process of reviewing the decision to determine whether or not to record an accrual for the June quarter. I will now provide our guidance for the September quarter, which does not include the estimated impact of the proposed sTec acquisition. For the September quarter, we are cautiously optimistic about a modest increase in the TAM, and we anticipate sustained strong performance within our business model. We expect a total available market of 135 million to 140 million units, up from the June quarter, primarily due to a seasonal uptick in gaming and branded products. Revenue in the range of $3.7 billion to $3.8 billion, reflecting modest price declines and a seasonal change in business mix. Gross margin well within our business model, and approximately flat with the prior quarter, excluding the amortization of HGST intangibles. R&D and SG&A spending of approximately $550 million, excluding the amortization of HGST intangibles. Tax rate within our 7% to 10% model, and a share count of approximately 242 million. Accordingly, we estimate non-GAAP earnings per share of between $1.95 and $2.05 for the September quarter. In summary, we're pleased with our continued strong performance and we're excited about our opportunity to play an increasingly strategic role in the evolving -- of the storage market. Operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question comes from Aaron Rakers with Stifel. Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division: On the quarter, when you look at your operating expense line, it was a little bit higher than what we had expected in the June quarter. Can you talk about where we stand, as far as operating expenses, let's say, beyond the current quarter? And how we should maybe think about the progression of that operating expense relative to your long-term target model of 10% to 12%? And I do have a follow-up. Wolfgang U. Nickl: Yes, Aaron. If you look to our investors summary, total operating expenses worth $590 million. That included $8 million of other charges. There were $10 million or $11 million of amortization of intangibles in there, and there was another $7 million of restructuring charges. If you deduct all of that, you're at $565 million, which compares to our guidance of $550 million, and the entire difference was due to incentive accruals that we took based on the performance of the teams. So we pretty much came out exactly like we anticipated and the real operational difference are intended for growth. As it relates to the go-forward spending, we've been very successful to keep it around that $550 million, and we'll be prudent going forward. We have said in the FAQ document that we issued alongside with the announcement of the sTec acquisition that, that will increase the OpEx for the time being. So we continue to be prudent and -- but we'll not forgo investment opportunities. And then of course, we will have to work longer-term on amortization, which will then give us a catalyst of to get into our 10% to 12% business model. Aaron C. Rakers - Stifel, Nicolaus & Co., Inc., Research Division: And then as a follow-up, thinking about the business model and, obviously, thinking about you capital allocation strategy, you've seen a fairly consistent trend on the cash flow generation over the past several quarters, given what you've laid out for the September quarter, is there any change in the trajectory or that trend as we look out over the next couple of quarters in terms of free cash flow generation? Wolfgang U. Nickl: Yes, I mean, we're very pleased with our free cash flow, $2.2 billion and each quarter above $525 million. That is a sign of a pretty stable, well-managed business. We intend to keep it that way. We stand to our capital allocation strategy, 50% of free cash flow, like we announced last year in September at the Investor Day, and we have no change as to that, today.

Our next question comes from Rich Kugele with Needham & Company. Richard Kugele - Needham & Company, LLC, Research Division: Just 2 questions for me. First, on the SSD front, I know you don't want get too much into comments on sTec, but the -- is there any sense you have that you could give us now on whether or not, post-deal, that there'd be enough revenue where you could actually break SSDs out as a category? Right now, it's basically a plug, but is there any way you could comment on that? Then I have a follow-up. Stephen D. Milligan: Rich, that's an interesting question. This is Steve. I mean, obviously, we'd like to think that the revenue gets big enough that we can break it out. I think we'll have to wait and see how it works out. We've been encouraged, in that we are limited, because we're still going through the regulatory review process and we're 2 separate companies, but we've been encouraged by the customer reaction that we've gotten regarding our proposed acquisition and we're comfortable that we think we're going -- that, that's going to be a sound investment for us and we're looking forward to working through the regulatory approval process in closing that transaction. So I hope that I can tell you after we get through a bit that we're big enough to be able to disclose and separate that out. Richard Kugele - Needham & Company, LLC, Research Division: Okay. And then just lastly, in terms of that appeals court commentary, is -- should this actually go against you, would you be able to use your full cash balance, including the offshore, or would you need to use the domestic dollars? Wolfgang U. Nickl: We would use offshore cash.

Our next question comes from Steven Fox with Cross Research. Steven Bryant Fox - Cross Research LLC: Just 2 questions on 2 different end markets. Just -- from looking at your branded sales and looking at Seagate's, I know you mentioned seasonality in that market, but I was curious if there's any kind of weakness in demand relative to the market, or maybe you're gaining some market share there. It seems like both companies, it's my observation, were relatively weak in that market. And if not, maybe you could just talk about how you think it's going to proceed for the rest for the calendar year? And then, secondly, on the flip side, could you talk about maybe the enterprise market? It's obviously been very strong because of some web scale spending. Do you think there's a pause coming in that or how do you sort of gain the demand trends there? Wolfgang U. Nickl: I'll start you off, Steven, and then Steve will probably comment on top of that. Branded, really no surprise, it's seasonally a soft quarter, particularly Europe is always very soft at this time of the year. Very pleased with the mix. You're seeing sell-in data that we're reporting. We're very pleased with the inventory levels in the market there. I'm very confident that, that market is seasonally picking up in the next 2 quarters. So really nothing that we wouldn't have expected there. Ongoing move there to NAS Boxes away from direct attached, but really nothing extraordinary to report on. The enterprise market last quarter was a little bit stronger than we expected and particularly on the capacity enterprise space. And that's really playing out as we predicted it as well. Performance enterprise is stable, but not up. Capacity enterprise, up. And like we said before, that segment of the market that we think for the next 5, 6, 7 years, has the strongest growth. And we said before that we wouldn't be surprised if that would be double digit.

Our next question comes from Nehal Choksi with Technology Insight Research. Nehal Sushil Chokshi - Technology Insights Research LLC: So client performance was -- client hard drive performance was flat Q-to-Q, which is consistent with the third-party market research organizations. But in the March Q, the hard drive and Western Digital client performance outperformed. I was wondering if you could talk about that in the context of hybrid and dual drive uptake by OEMs. And to follow-on with that, can you talk about what your expectations are with whether or not hybrid drives will be GM accretive, and if it's not GM accretive, will be at least gross profit accretive per unit? Stephen D. Milligan: So in terms of our business, we, for the first half of the year, have not been impacted by -- we're not shipping a hybrid drive in terms of the first half of the year. It's really for us, more of a back half of calendar 2013, and in particular, 2014, as we see customers begin to adapt that sort of a solution. And now, customers are, as you referenced, dual-drive configurations are meaningful. And we're kind of agnostic, frankly, whether it's a dual-drive configuration or a hybrid configuration. And so, because both of them, ultimately, use a hard drive or spinning disks. Now in terms of the gross margin comment, I'm going to deflect that question in the sense that we don't typically talk about gross margin by product, whether or not it's accretive or non-accretive. And so I'm going to not answer that question. Nehal Sushil Chokshi - Technology Insights Research LLC: Okay. Do you mind if I ask a separate question then? Stephen D. Milligan: Sure. Nehal Sushil Chokshi - Technology Insights Research LLC: The cash conversion cycle, that was up an unseasonal 5 days quarter-over-quarter. And looks like it was primarily driven by an increase of DSOs. But you guys clearly said that channel inventory's not an issue. So can you give some clarification as far as what's really going in -- on here? And does this impact your visibility into September quarter relative to past September quarters? Wolfgang U. Nickl: Nehal, there's no change in payment behavior of our customers. We had really good linearity in the quarter, as you can see from our free cash flow. The uptick in DSO is purely a function of channel mix. If you look at the channel split, our OEM business went from 60% to 66%, and our Distribution business and Branded business went down. So no significant change. Seasonally, expect that -- and doesn't have any impact on visibility on the September quarter.

Our next question comes from Ananda Baruah with Brean Capital. Ananda Baruah - Brean Capital LLC, Research Division: I guess, two, if I could. The first is just a general question around gross margin dynamics. Could you give us an update on, I guess, where you are with the single platter shift and what the impact -- at least [indiscernible to margins was this quarter? And then, can you first speak to why margins wouldn't go up in the second half of the year? Or is there a chance for that and you're just sort of being prudent with the guidance, given sort of more stable than expected like-for-like ASPs and what's going on with mix? And I have a follow-up. Wolfgang U. Nickl: So as it relates to Q4, gross margin, we're very pleased to beat the guidance by 60 basis points. And that was really a function of several things, capacity utilization, but also of business mix, more enterprise business, and then lower like-for-like price declines. As we go into the September quarter, the flat margin is more or less a function of the business mix. We have plans for modest price declines and, as every quarter, we're trying to optimize the results as we go through the quarter. Ananda Baruah - Brean Capital LLC, Research Division: And just some clarification on the transition to single platter, and then I have a follow-up. Wolfgang U. Nickl: We're making steady progress. Last quarter, I told you that we're around 50%, and that we would probably take another year or so to completely transition it. We'll do that when it economically makes sense, and we're making steady progress on that front. Ananda Baruah - Brean Capital LLC, Research Division: Okay. Great. And I guess, the last thing for me is can you speak about, or is it too early to speak about it, could you give us some sense of what your expectations are for the game cycle? Refreshes are taking place in the second half of the year and, traditionally, that's been, I guess, a really strong market for you guys. So I guess, any detail you can give us around how we should be thinking about that in the context of industry potential and WD potential would be helpful. Stephen D. Milligan: I'm sorry, what cycle? I didn't understand what you said. Ananda Baruah - Brean Capital LLC, Research Division: The -- sort of, I guess, the new Xbox and the new PlayStation. Stephen D. Milligan: Oh, yes, yes, yes. So those are 100% attach rates and part of the demand increase that we're -- or TAM increase, I guess, I should say, that we're expecting in calendar Q3 is reflective of that, the gaming build that will take place for the Christmas season. And so we're happy that it's going to be a 100% attach rate. And we will, as a company, we've been a relatively big participant on the gaming business. I mean, there's only 2 guys, right, Microsoft and Sony. And we will continue to participate in that business to the extent that it makes economic sense. Ananda Baruah - Brean Capital LLC, Research Division: Thanks, Steven. I guess, that suggests sort of de facto share gain in the second half of the year, since you guys are the dominant player there? Stephen D. Milligan: I wouldn't imply that. I mean, we've been a strong participant in that market, if we're going back for a while. And so I wouldn't imply that we think that there'll be share gains solely as a consequence of that, right? We have to see how everything plays out.

Our next question comes Keith Bachman with Bank of Montreal. Keith F. Bachman - BMO Capital Markets U.S.: The first one for me is, could you provide some comments on what you think the TAM does in December? Wolfgang U. Nickl: Yes. We assume, right now, in our modeling that's around 140 million units. Keith F. Bachman - BMO Capital Markets U.S.: Okay. So... Stephen D. Milligan: One of the things that we're going to have to do, Keith, and this is -- it's going to be interesting to see. I mean, obviously, the news on the PC front has not been that rosy, right, in terms of what some of the other guys in the supply chain have talked about. And so now, what we're beginning to see is some building of product, sort of filling the pipe for back-to-school and for the holiday season, particularly, back-to-school, really, at this point. I mean, we're beginning to see increased sort of demand levels as a consequence of that. The key thing that we're going to have to see is, how does that product sell-through, right? Does that actually translate to either a flattening in terms of the declines that we've seen on the PC side or maybe a little bit of growth? And so what we're doing is taking a pretty cautious approach to that. And so -- but I certainly, it's kind of -- it's sort of a different question than what Rich asked about splitting out SSD, I'd certainly like to be able to report increasing or accelerating PC sales, but I don't think that we're at the point where we can say that yet. You have the sell-through happens. Keith F. Bachman - BMO Capital Markets U.S.: Okay. Well, my second question actually relates to that, Steve. Over the last 4 quarters, and in particularly the last 2 quarters, your client units have done significantly better than your competition. And what's driving that? And would you give any comments on does that continue? And obviously against Seagate in particular? Stephen D. Milligan: I don't know if I can comment on that both because, I mean, we have not had a specific strategy to increase our share in those markets, which is kind of interesting. And so, sometimes we look at the share numbers after the fact and -- because it's not a goal of ours to say, "Hey, let's go and increase our market presence in that particular market." And so, I have a neat answer for you, other than, and it may sound a little bit self-serving, we are -- both WD and HGST have done a great job from an execution standpoint. And that's allowed us to increase our position in those marketplaces. Keith F. Bachman - BMO Capital Markets U.S.: Okay. Any thoughts on whether that continues, Steve? Stephen D. Milligan: I don't want to call that. Obviously, we want to make sure that our good execution continues. And if it happens to result in profitable gains from a market share perspective and the right kind of financial performance, we're happy to do that.

Our next question comes from Joe Wittine with Longbow Research. Joseph Wittine - Longbow Research LLC: First up, I wanted to see if you could reconcile your projected growth in the TAM in the third quarter with your sales guidance. So the TAM, at the midpoint, you're up 3% or 4% sequentially. Your sales guidance at the midpoint is up 50, 60 bps, or something like that. So are you -- is that conservatism? Or are you perhaps going along with the last question, perhaps planning to concede a little bit of share after gaining quite a bit of it over the last few quarters? Wolfgang U. Nickl: Like Steve said, I mean, we're not really going into a quarter with particular share targets. We're trying to execute well and then put linearity in good products. But that's mostly a mix factor. In particular, the gaming business is a lower ASP business and that just plays into that equation. Joseph Wittine - Longbow Research LLC: And then, you already said looking at -- talking about free cash flow for '14, you said you'd like to continue the stability, I guess. Any thoughts within that on capital expenditures? Do you still expect to be within the bottom of the range next year as you were this year? Wolfgang U. Nickl: Yes, I mean, we will be in our business model from 5% to 7%, and we will heavily be focused on technology deployment and upgrades to new aerial densities and supply flexibility, et cetera. Then we just need to decide as we get into the second half of the fiscal year what the predictions are for the end of calendar '14, and that will determine where we end at the end of the day. But you should assume that we'll be extremely prudent and as just in time as possible with deployment of capital.

Our next question comes from Andrew Nowinski with Piper Jaffray. Daniel F. Garofalo - Piper Jaffray Companies, Research Division: It's Dan Garofalo on for Andy. I just wanted to talk about, from a restructuring standpoint, you've continued to kind of rightsize manufacturing, and if we set aside anything related to a favorable MOFCOM ruling, where would you say you're at with the rightsizing process? Are we -- are you kind of halfway done doing what you can do? Or is there more than less than that? Or how would you characterize that, I guess? Stephen D. Milligan: Yes, I'll answer it this way. I mean, if you look at our financial performance, I mean, obviously, we want to do everything that we can to continue to improve our profitability. I think if you look at our gross margin performance, we're solidly within our gross margin range, which kind of implies that the actions that we've taken sort of seem to be appropriate from a rightsizing perspective. And that's, obviously, based upon, let's just use round numbers, say a TAM of kind of that 135-ish kind of range, 135 million a quarter. The thing that we have to watch closely and we're certainly not predicting it, but this is, do we have something further? If that were to change, and decrease, then we'd have to look at doing something else. But I think that we're comfortable where we're at, generally speaking, from a capacity perspective, given that kind of a TAM level. Daniel F. Garofalo - Piper Jaffray Companies, Research Division: Great. That's helpful. And then, just one follow-up for me. On the enterprise side, I think you've indicated that the 7-platter helium drive should be out sometime in the second half of the year. And I know you've touched on those in your prepared remarks, could you provide an update on timing there? And secondly, when the drives are available, is it fair to say, you expect some movement from market share perspective within the capacity optimized segment? Stephen D. Milligan: Yes. So we -- we're currently sampling these products with selected customers right now, or that product with selected customers. And we continue to expect that we will have units shipped and revenue realized before the end of the calendar year. The first generation product will not be a particularly significant volume product to start out with, as customers test it out and that sort of thing. So I would doubt whether or not that will meaningfully move the needle in terms of any market share in the capacity enterprise, at least initially. And then we'll have to see how the adoption goes from there.

Our next question comes from Sherri Scribner from Deutsche Bank. Sherri Scribner - Deutsche Bank AG, Research Division: I just have a quick clarification. Can you give us some -- or can you give us the numbers for your nearline SATA enterprise versus the performance enterprise? Wolfgang U. Nickl: Sherri, we haven't broken that out. Sherri Scribner - Deutsche Bank AG, Research Division: Can you give us some ballpark or help us think about it in terms of magnitude? Wolfgang U. Nickl: What we have said before is that our share in all the areas of the market that we serve is comparable. And the performance enterprise market is pretty stable, just shy of 8 million units compared to the last quarter. Sherri Scribner - Deutsche Bank AG, Research Division: Okay. And then, just thinking about the recent acquisitions you've done with VeloBit or at least that you've announced in Skyera, just trying to understand the motivation for doing those acquisitions? I understand those to be primarily sort of SSD array type of companies, and you guys are an HD business, it doesn't seem like you'd be doing arrays yourselves, that would seem to be competing with your customers. But just wanted to understand where you're going with that technology? Stephen D. Milligan: Yes. So Sherri, just to clarify one thing. We did not acquire Skyera, we made an equity investment on Skyera back. And that -- and that's more of reflective of our interest to stay close to the technology changes and advancements that are going on in that space, as opposed to us getting into, per se, the storage or the SSD array kind of business. So that's one clarification. The VeloBit acquisition which, from a financial perspective, was not particularly significant, is really to provide software capability in terms of input/output optimization, caching kind of capability, that sort of thing, to improve our existing -- or any future offerings that we have in the enterprise SSD space. So it really is an effort to make our products more compelling than they otherwise would be.

Our next question comes from Amit Daryanani with RBC Capital Markets. Amit Daryanani - RBC Capital Markets, LLC, Research Division: Couple of questions. One, I guess, if I look at the finished goods inventory, it was up about $22 million, 5% sequentially in the quarter. Could you maybe talk about what were the drivers that led to that uptick? Wolfgang U. Nickl: I'll take that question. Overall, our inventory was pretty stable for the last 3 quarters, and there's always a bit of a shift between the raw and FGI. But we have made a conscious decision to invest in FGI in 2 areas. Number one, we're making more use of boat shipments in areas where we understand the demand very well, and that contributes to our cost savings. And the second one is, we want to make sure that our just-in-time warehouses have sufficient inventory at quarter-end to make sure that there is a smooth operation guaranteed at our customers' level. Overall, we believe that we all the time have opportunity in the inventory space, but probably more in the raw and whip [ph] area that in the FGI area. So we're pretty pleased with the executions, very stable, but future opportunity is likely. Amit Daryanani - RBC Capital Markets, LLC, Research Division: Fair enough. And I guess, if I just look at the September guide, you guys are suggesting gross margin should remain flat on a sequential basis. To me, at least it looks like the mix is going to end up being a bit of headwind with gaming's up, picking up on a sequential basis. Maybe just talk about what are the offsets to that mix being a bit of a drag in the September quarter? Wolfgang U. Nickl: Yes, you're right that the mix is a bit of a headwind but then it's likely a little bit of a higher volume. That's a tailwind and then we'll continue to work on our costs and all the other elements. But you got it, the mix is the headwind and we're offsetting it with cost and good execution.

Our next question comes from Katie Huberty with Morgan Stanley. Kathryn L. Huberty - Morgan Stanley, Research Division: Just going back to the compute market, notebooks, specifically, were up more than seasonal. Can you talk about what area of that market you think you're taking share? Stephen D. Milligan: Kate, I don't know if there's any specific area, per se. I think I commented on earlier in terms of -- it wasn't so much that we had a deliberate strategy to increase our market share in that particular segment, but both of our subs, just really, frankly, did a very nice job working with our customers in such a way that we were actually able to kind of keep our situations sort of flat when the market was down a little bit, and we were able to gain a little bit of share. Kathryn L. Huberty - Morgan Stanley, Research Division: Okay. And then just as a follow-up, I understand visibility is probably pretty low, as you said, you're seeing build for back-to-school, but you got to see demand, are you seeing any signs in your business of a demand recovery in traditional PCs, or the traditional enterprise storage market? Stephen D. Milligan: Well, okay. That's kind of a two-pronged question. The traditional PCs, I mean, we -- our customers continue to be very cautious with regards to what they're seeing from a PC demand perspective, whether that be desktop or notebooks. And particularly, notebooks, right, is where the real cautiousness is. Desktop has tended to be a little bit more stable over time. When you start moving into the enterprise space, I mean, it depends upon who you're talking to and, obviously, we don't care to talk about specific customers, but with what we're seeing from a digital data growth perspective, demand in that space, overall, continues to increase. And that's reflective in the unit increases that we're seeing in terms of our enterprise business.

Our next question comes from Rob Cihra with Evercore. Robert Cihra - Evercore Partners Inc., Research Division: I'm not sure how much it's related to the last question in -- earlier on, nearline, but Steve, maybe when you combine your SSD moves, about the strength you've had in the SaaS side and then in your planned acquisitions, and you look at the traditional enterprise market, I mean, do you look out and feel like traditional enterprise is a growth market or a shrinking market getting squeezed between nearline, at the low end, and SSD, at the high end? Or do you feel like that's actually a positive growth market going forward? Stephen D. Milligan: Yes. So traditionally, you hit the nail on the head, the traditional enterprise business, we do not view as a growth business. It's fairly stable in terms of its demand, which is great, which is fine. But the growth areas in terms of enterprise are in the capacity enterprise market, and then also we believe in enterprise class solid-state drives. Robert Cihra - Evercore Partners Inc., Research Division: Right. And if I could ask a follow-up related to that, would you -- my guess is, no, but would you guys be willing to share what percentage of your enterprise revenue, even ballpark, is direct to kind of big web scale customers rather than through traditional OEM channel? Stephen D. Milligan: Yes. I appreciate the question but that's not one that we're going to address, Rob.

Our next question comes from Mark Miller with Noble Financial. Mark S. Miller - Noble Financial Group, Inc., Research Division: A few questions back. And I know you want to be cautious. But Nidec yesterday reported a 16% increase in their unit shipments of motors to hard drive manufacturers, and yet both you and Seagate, in terms of your TAM expectations, are certainly below that. Is this an inventory restocking thing or more cautious, or both? Stephen D. Milligan: I don't know, Mark, honestly. I haven't gone and studied what Nidec disclosed. But it's -- it's obviously not -- it's got to be inventory-related. I mean, because it must be a replenishment thing, but that's speculation on my part. Mark S. Miller - Noble Financial Group, Inc., Research Division: Okay. You certainly made some big efforts recently in the solid-state drive market with your acquisition. But I was just wondering, 2 weeks ago, Micron kind of surprised people. A lot of people feel that they -- because of technology challenges that solid-state drive, NAND flash, can't be pushed much further beyond the 18-nanometer node. And a lot of firms are now looking at three-dimensional type flash. SANDisk, for instance, is talking about that in 2015. Yet Micron came out and said they, by perfecting a high-K metal gate process, were able now to -- are selectively sampling 16-nanometer flash and estimates are that they would have a factor 2 margin advantage if they can pull that off over competitors at a higher node, which if you look at it conversely, it could actually lower the price of, say, a 128-gig drive and keep margins same as some of your competitors' by $15 to $20. I'm just wondering any comments on that in terms of the impact on your solid-state or your hard drive business. Stephen D. Milligan: I don't have any direct perspective on that, Mark. But I think that one of the things that we've got to keep in mind is that, I mean, flash or NAND is shipped into a lot of different applications. And those applications have different reliability or different characteristics. So I don't know if Micron is alluding to those being able ship into kind of client applications, which maybe have a different profile associated with them, it's one of the things that we've recognized and is part of the value add that we provide, as a hard drive company, is making sure that products that are provided meet the right criteria for enterprise kind of applications. So Micron, along with some of the other NAND guys that is accompanying that, we are working with and want to continue to work with, in terms of what it is to utilize their technology to the advancement of our customers. Mark S. Miller - Noble Financial Group, Inc., Research Division: So your relationship with Micron would not put you at a disadvantage if they start competing against other people shipping flash coming out of a higher node? Is that correct? Stephen D. Milligan: I think that the opportunity in the marketplace is big and I don't -- I think that there's plenty of opportunity for all of us. Mark S. Miller - Noble Financial Group, Inc., Research Division: It was MLC flash which, I think, probably feels more for a lower end type storage application because of some of the issues with program arrays with MLC flash. Stephen D. Milligan: I want to thank you again for joining us. In closing, I also want to thank all Western Digital employees for their dedication and outstanding performance, and our customers and suppliers for their support. We look forward to being in touch with you. Thank you.

That does conclude today's conference. Thank you for your participation and you may disconnect at this time.