Separate Financial Information of Guarantor Subsidiaries

The 2026 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, subject to certain customary guarantor release conditions, by certain 100% owned material domestic subsidiaries of the Company (or the “Guarantor Subsidiaries”). The guarantee by a Guarantor Subsidiary will be released in the event of (i) the release of a Guarantor Subsidiary from its guarantee of indebtedness under the Credit Agreement or other indebtedness that would have required the Guarantor Subsidiary to guarantee the 2026 Senior Unsecured Notes, (ii) the sale, issuance or other disposition of capital stock of a Guarantor Subsidiary such that it is no longer a restricted subsidiary under the indenture governing the 2026 Senior Unsecured Notes, (iii) the sale of all or substantially all of a Guarantor Subsidiary’s assets, (iv) the Company’s exercise of its defeasance options under the indenture governing the 2026 Senior Unsecured Notes, (v) the dissolution or liquidation of a Guarantor Subsidiary or (vi) the sale of all the equity interest in a Guarantor Subsidiary. The Company’s other domestic subsidiaries and its foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee the 2026 Senior Unsecured Notes. The following condensed consolidating financial information reflects the summarized financial information of Western Digital Corporation (“Parent”), the Guarantor Subsidiaries on a combined basis, and the Non-Guarantor Subsidiaries on a combined basis.



Condensed Consolidating Balance Sheet
As of June 29, 2018

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Company
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	40		$	668	$	4,297	$	—		$	5,005
Accounts receivable, net	—			1,358		839		—			2,197
Intercompany receivables	1,903			4,256		2,674		(8,833		)	—
Inventories	—			990		2,159		(205		)	2,944
Other current assets	20			195		277		—			492
Total current assets	1,963			7,467		10,246		(9,038		)	10,638
Property, plant and equipment, net	—			1,092		2,003		—			3,095
Notes receivable and investments in Flash Ventures	—			—		2,105		—			2,105
Goodwill	—			387		9,688		—			10,075
Other intangible assets, net	—			38		2,642		—			2,680
Investments in consolidated subsidiaries	20,847			19,893		—		(40,740		)	—
Loans due from consolidated affiliates	943			16		—		(959		)	—
Other non-current assets	182			29		431		—			642
Total assets	$	23,935		$	28,922	$	27,115	$	(50,737	)	$	29,235

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—		$	279	$	1,986	$	—		$	2,265
Accounts payable to related parties	—			—		259		—			259
Intercompany payables	1,066			4,648		3,119		(8,833		)	—
Accrued expenses	198			505		571		—			1,274
Accrued compensation	—			297		182		—			479
Current portion of long-term debt	179			—		—		—			179
Total current liabilities	1,443			5,729		6,117		(8,833		)	4,456
Long-term debt	10,962			—		31		—			10,993
Loans due to consolidated affiliates	—			427		532		(959		)	—
Other liabilities	(1		)	1,768		488		—			2,255
Total liabilities	12,404			7,924		7,168		(9,792		)	17,704
Total shareholders’ equity	11,531			20,998		19,947		(40,945		)	11,531
Total liabilities and shareholders’ equity	$	23,935		$	28,922	$	27,115	$	(50,737	)	$	29,235



Condensed Consolidating Balance Sheet
As of June 30, 2017

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Company
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	18	$	1,212	$	5,124	$	—		$	6,354
Accounts receivable, net	—		1,247		701		—			1,948
Intercompany receivables	1,225		2,528		622		(4,375		)	—
Inventories	—		1,133		1,494		(286		)	2,341
Other current assets	4		158		245		6			413
Total current assets	1,247		6,278		8,186		(4,655		)	11,056
Property, plant and equipment, net	—		1,124		1,909		—			3,033
Notes receivable and investments in Flash Ventures	—		—		1,340		—			1,340
Goodwill	—		331		9,683		—			10,014
Other intangible assets, net	—		11		3,812		—			3,823
Investments in consolidated subsidiaries	19,082		17,588		—		(36,670		)	—
Loans due from consolidated affiliates	4,700		16		—		(4,716		)	—
Other non-current assets	51		723		419		(599		)	594
Total assets	$	25,080	$	26,071	$	25,349	$	(46,640	)	$	29,860

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	257	$	1,887	$	—		$	2,144
Accounts payable to Flash Ventures	—		—		206		—			206
Intercompany payables	270		4,039		66		(4,375		)	—
Accrued expenses	270		364		621		—			1,255
Accrued compensation	—		313		193		—			506
Current portion of long-term debt	233		—		—		—			233
Total current liabilities	773		4,973		2,973		(4,375		)	4,344
Long-term debt	12,889		—		29		—			12,918
Loans due to consolidated affiliates	—		546		4,170		(4,716		)	—
Other liabilities	—		1,243		530		(593		)	1,180
Total liabilities	13,662		6,762		7,702		(9,684		)	18,442
Total shareholders’ equity	11,418		19,309		17,647		(36,956		)	11,418
Total liabilities and shareholders’ equity	$	25,080	$	26,071	$	25,349	$	(46,640	)	$	29,860



Condensed Consolidating Statement of Operations
For the year ended June 29, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	14,913		$	20,155		$	(14,421	)	$	20,647
Cost of revenue	—			12,913			14,573			(14,544		)	12,942
Gross profit	—			2,000			5,582			123			7,705
Operating expenses:
Research and development	—			1,551			849			—			2,400
Selling, general and administrative	8			1,044			421			—			1,473
Intercompany operating expense (income)	—			(1,626		)	1,626			—			—
Employee termination, asset impairment, and other charges	1			47			167			—			215
Total operating expenses	9			1,016			3,063			—			4,088
Operating income (loss)	(9		)	984			2,519			123			3,617
Interest and other income (expense):
Interest income	211			8			51			(210		)	60
Interest expense	(674		)	(21		)	(191		)	210			(676		)
Other expense, net	(905		)	(9		)	(2		)	—			(916		)
Total interest and other expense, net	(1,368		)	(22		)	(142		)	—			(1,532		)
Income (loss) before taxes	(1,377		)	962			2,377			123			2,085
Income tax expense (benefit)	(354		)	1,633			131			—			1,410
Equity in earnings from subsidiaries	1,698			2,223			—			(3,921		)	—
Net income	$	675		$	1,552		$	2,246		$	(3,798	)	$	675



Condensed Consolidating Statement of Operations
For the year ended June 30, 2017

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	14,732		$	16,381		$	(12,020	)	$	19,093
Cost of revenue	—			12,786			12,203			(11,968		)	13,021
Gross profit	—			1,946			4,178			(52		)	6,072
Operating expenses:
Research and development	—			1,619			822			—			2,441
Selling, general and administrative	6			1,006			433			—			1,445
Intercompany operating expense (income)	—			(1,736		)	1,736			—			—
Employee termination, asset impairment, and other charges	—			88			144			—			232
Total operating expenses	6			977			3,135			—			4,118
Operating income (loss)	(6		)	969			1,043			(52		)	1,954
Interest and other income (expense):
Interest income	347			11			22			(354		)	26
Interest expense	(843		)	(10		)	(348		)	354			(847		)
Other income (expense), net	(290		)	49			(61		)	(62		)	(364		)
Total interest and other income (expense), net	(786		)	50			(387		)	(62		)	(1,185		)
Income (loss) before taxes	(792		)	1,019			656			(114		)	769
Income tax expense (benefit)	(282		)	259			395			—			372
Equity in earnings from subsidiaries	907			287			—			(1,194		)	—
Net income	$	397		$	1,047		$	261		$	(1,308	)	$	397



Condensed Consolidating Statement of Operations
For the year ended July 1, 2016

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	12,600		$	13,285		$	(12,891	)	$	12,994
Cost of revenue	—			11,796			10,662			(12,899		)	9,559
Gross profit	—			804			2,623			8			3,435
Operating expenses:
Research and development	—			1,095			532			—			1,627
Selling, general and administrative	4			645			348			—			997
Intercompany operating expense (income)	—			(1,087		)	1,087			—			—
Employee termination, asset impairment, and other charges	—			105			240			—			345
Total operating expenses	4			758			2,207			—			2,969
Operating income (loss)	(4		)	46			416			8			466
Interest and other income (expense):
Interest income	54			2			24			(54		)	26
Interest expense	(184		)	(128		)	(8		)	54			(266		)
Other income (expense), net	11			(30		)	(54		)	—			(73		)
Total interest and other expense, net	(119		)	(156		)	(38		)	—			(313		)
Income (loss) before taxes	(123		)	(110		)	378			8			153
Income tax benefit	(44		)	(27		)	(18		)	—			(89		)
Equity in earnings from subsidiaries	321			400			—			(721		)	—
Net income	$	242		$	317		$	396		$	(713	)	$	242



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the year ended June 29, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net income	$	675		$	1,552		$	2,246		$	(3,798	)	$	675
Other comprehensive income, before tax:
Actuarial pension loss	(2		)	(2		)	(2		)	4			(2		)
Foreign currency translation adjustment	18			15			15			(30		)	18
Net unrealized gain (loss) on derivative contracts and available-for-sale securities	7			(10		)	(6		)	16			7
Total other comprehensive income, before tax	23			3			7			(10		)	23
Income tax benefit (expense) related to items of other comprehensive income	(4		)	1			(1		)	—			(4		)
Other comprehensive income, net of tax	19			4			6			(10		)	19
Total comprehensive income	$	694		$	1,556		$	2,252		$	(3,808	)	$	694



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the year ended June 30, 2017

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net income	$	397		$	1,047		$	261		$	(1,308	)	$	397
Other comprehensive loss, before tax:
Actuarial pension gain	39			39			39			(78		)	39
Foreign currency translation adjustment	(115		)	(113		)	(136		)	249			(115		)
Net unrealized gain (loss) on derivative contracts and available-for-sale securities	(75		)	(75		)	(73		)	148			(75		)
Total other comprehensive loss, before tax	(151		)	(149		)	(170		)	319			(151		)
Income tax expense related to items of other comprehensive loss	(10		)	(10		)	(8		)	18			(10		)
Other comprehensive loss, net of tax	(161		)	(159		)	(178		)	337			(161		)
Total comprehensive income	$	236		$	888		$	83		$	(971	)	$	236



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the year ended July 1, 2016

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net income	$	242		$	317		$	396		$	(713	)	$	242
Other comprehensive income (loss), before tax:
Actuarial pension loss	(73		)	(73		)	(73		)	146			(73		)
Foreign currency translation adjustment	74			74			74			(148		)	74
Net unrealized gain (loss) on derivative contracts	99			99			93			(192		)	99
Total other comprehensive loss, before tax	100			100			94			(194		)	100
Income tax benefit related to items of other comprehensive income (loss)	23			23			23			(46		)	23
Other comprehensive loss, net of tax	123			123			117			(240		)	123
Total comprehensive income	$	365		$	440		$	513		$	(953	)	$	365



Condensed Consolidating Statement of Cash Flows
For the year ended June 29, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	(144	)	$	211		$	4,158		$	(20	)	$	4,205
Cash flows from investing activities
Purchases of property, plant and equipment	—			(220		)	(615		)	—			(835		)
Proceeds from the sale of property, plant and equipment	—			—			26			—			26
Acquisitions, net of cash acquired	—			(94		)	(6		)	—			(100		)
Purchases of investments	—			(21		)	(68		)	—			(89		)
Proceeds from sale of investments	—			—			48			—			48
Proceeds from maturities of investments	—			—			19			—			19
Notes receivable issuances to Flash Ventures	—			—			(1,313		)	—			(1,313		)
Notes receivable proceeds from Flash Ventures	—			—			571			—			571
Strategic investments and other, net	—			(2		)	20			—			18
Intercompany loan from consolidated affiliates	3,757			—			—			(3,757		)	—
Advances from (to) parent and consolidated affiliates	(86		)	86			—			—			—
Net cash provided by (used in) investing activities	3,671			(251		)	(1,318		)	(3,757		)	(1,655		)
Cash flows from financing activities
Issuance of stock under employee stock plans	220			—			—			—			220
Taxes paid on vested stock awards under employee stock plans	(171		)	—			—			—			(171		)
Repurchases of common stock	(591		)	—			—			—			(591		)
Dividends paid to shareholders	(593		)	—			—			—			(593		)
Settlement of debt hedge contracts	28			—			—			—			28
Repayment of debt and premiums	(17,074		)	—			—			—			(17,074		)
Proceeds from debt	13,840			—			—			—			13,840
Proceeds from (repayment of) revolving credit facility	500			—			—			—			500
Debt issuance costs	(59		)	—			—			—			(59		)
Intercompany loan to consolidated affiliates	—			(119		)	(3,638		)	3,757			—
Change in investment in consolidated subsidiaries	395			(385		)	(30		)	20			—
Net cash used in financing activities	(3,505		)	(504		)	(3,668		)	3,777			(3,900		)
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	22			(544		)	(827		)	—			(1,349		)
Cash and cash equivalents, beginning of year	18			1,212			5,124			—			6,354
Cash and cash equivalents, end of year	$	40		$	668		$	4,297		$	—		$	5,005



Condensed Consolidating Statement of Cash Flows
For the year ended June 30, 2017

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	(360	)	$	(836	)	$	4,593		$	40		$	3,437
Cash flows from investing activities
Purchases of property, plant and equipment	—			(240		)	(338		)	—			(578		)
Proceeds from the sale of property, plant and equipment	—			—			21			—			21
Purchases of investments	—			—			(281		)	—			(281		)
Proceeds from sale of investments	—			—			94			—			94
Proceeds from maturities of investments	—			—			417			—			417
Investments in Flash Ventures	—			—			(20		)	—			(20		)
Notes receivable issuances to Flash Ventures	—			—			(549		)	—			(549		)
Notes receivable proceeds from Flash Ventures	—			—			292			—			292
Strategic investments and other, net	—			(1		)	(31		)	—			(32		)
Intercompany loans from consolidated affiliates	1,300			39			—			(1,339		)	—
Advances from (to) consolidated affiliates	(158		)	166			—			(8		)	—
Net cash provided by (used in) investing activities	1,142			(36		)	(395		)	(1,347		)	(636		)
Cash flows from financing activities
Issuance of stock under employee stock plans	235			—			—			—			235
Taxes paid on vested stock awards under employee stock plans	(124		)	—			—			—			(124		)
Excess tax benefits from employee stock plans	119			—			—			—			119
Proceeds from acquired call option	—			—			61			—			61
Settlement of convertible debt	—			—			(492		)	—			(492		)
Dividends paid to shareholders	(574		)	—			—			—			(574		)
Settlement of debt hedge contracts	—			(21		)	—			—			(21		)
Repayment of debt and premiums	(8,702		)	(2,995		)	—			—			(11,697		)
Proceeds from debt	7,908			—			—			—			7,908
Debt issuance costs	(10		)	—			—			—			(10		)
Intercompany loan to consolidated affiliates	—			(5,454		)	4,115			1,339			—
Change in investment in consolidated subsidiaries	384			9,348			(9,700		)	(32		)	—
Net cash provided by (used in) financing activities	(764		)	878			(6,016		)	1,307			(4,595		)
Effect of exchange rate changes on cash	—			—			(3		)	—			(3		)
Net increase (decrease) in cash and cash equivalents	18			6			(1,821		)	—			(1,797		)
Cash and cash equivalents, beginning of year	—			1,206			6,945			—			8,151
Cash and cash equivalents, end of year	$	18		$	1,212		$	5,124		$	—		$	6,354



Condensed Consolidating Statement of Cash Flows
For the year ended July 1, 2016

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Cash flows from operating activities
Net cash provided by operating activities	$	(210	)	$	1,018		$	1,299		$	(124	)	$	1,983
Cash flows from investing activities
Purchases of property, plant and equipment	—			(233		)	(351		)	—			(584		)
Acquisitions, net of cash acquired	—			(13,767		)	3,932			—			(9,835		)
Purchases of investments	—			—			(632		)	—			(632		)
Proceeds from sale of investments	—			—			1,204			—			1,204
Proceeds from maturities of investments	—			—			405			—			405
Notes receivable issuances to Flash Ventures	—			—			(106		)	—			(106		)
Notes receivable proceeds from Flash Ventures	—			—			16			—			16
Strategic investments and other, net	(34		)	(10		)	(32		)	—			(76		)
Intercompany loans from (to) consolidated affiliates	(6,000		)	40			—			5,960			—
Advances to consolidated affiliates	(8,845		)	(96		)	(229		)	9,170			—
Net cash provided by (used in) investing activities	(14,879		)	(14,066		)	4,207			15,130			(9,608		)
Cash flows from financing activities
Issuance of stock under employee stock plans	117			—			—			—			117
Taxes paid on vested stock awards under employee stock plans	(50		)	—			—			—			(50		)
Excess tax benefits from employee stock plans	7			—			—			—			7
Proceeds from acquired call option	—			—			409			—			409
Settlement of convertible debt	—			—			(2,611		)	—			(2,611		)
Repurchases of common stock	(60		)	—			—			—			(60		)
Dividends paid to shareholders	(464		)	—			—			—			(464		)
Repayment of debt	—			(2,313		)	—			—			(2,313		)
Proceeds from debt	14,108			3,000			—			—			17,108
Proceeds from (repayment of) revolving credit facility	—			—			(255		)	—			(255		)
Debt issuance costs	(497		)	(27		)	—			—			(524		)
Payment upon settlement of acquired warrants	—			—			(613		)	—			(613		)
Intercompany loan from (to) consolidated affiliates	—			6,000			(40		)	(5,960		)	—
Change in investment in consolidated subsidiaries	1,928			6,933			185			(9,046		)	—
Net cash provided by (used in) financing activities	15,089			13,593			(2,925		)	(15,006		)	10,751
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	—			545			2,582			—			3,127
Cash and cash equivalents, beginning of year	—			661			4,363			—			5,024
Cash and cash equivalents, end of year	$	—		$	1,206		$	6,945		$	—		$	8,151