Separate Financial Information of Guarantor Subsidiaries

The Company’s senior unsecured notes due 2026 (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 March 29, 2019

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Company
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	9	$	1,019	$	2,654	$	—		$	3,682
Accounts receivable, net	—		645		578		—			1,223
Intercompany receivables	2,602		5,564		1,924		(10,090		)	—
Inventories	—		1,115		2,517		(192		)	3,440
Loans due from consolidated affiliates	—		—		50		(50		)	—
Other current assets	11		273		273		—			557
Total current assets	2,622		8,616		7,996		(10,332		)	8,902
Property, plant and equipment, net	—		1,038		1,993		—			3,031
Notes receivable and investments in Flash Ventures	—		—		2,403		—			2,403
Goodwill	—		388		9,687		—			10,075
Other intangible assets, net	—		27		1,891		—			1,918
Investments in consolidated subsidiaries	20,540		16,822		—		(37,362		)	—
Loans due from consolidated affiliates	—		557		—		(557		)	—
Other non-current assets	56		49		479		—			584
Total assets	$	23,218	$	27,497	$	24,449	$	(48,251	)	$	26,913

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	216	$	1,361	$	—		$	1,577
Accounts payable to related parties	—		—		312		—			312
Intercompany payables	1,704		3,969		4,417		(10,090		)	—
Accrued expenses	169		614		862		—			1,645
Accrued compensation	—		264		138		—			402
Loans due to consolidated affiliates	—		50		—		(50		)	—
Current portion of long-term debt	276		—		—		—			276
Total current liabilities	2,149		5,113		7,090		(10,140		)	4,212
Long-term debt	10,277		—		32		—			10,309
Loans due to consolidated affiliates	541		—		16		(557		)	—
Other liabilities	37		1,684		457		—			2,178
Total liabilities	13,004		6,797		7,595		(10,697		)	16,699
Total shareholders’ equity	10,214		20,700		16,854		(37,554		)	10,214
Total liabilities and shareholders’ equity	$	23,218	$	27,497	$	24,449	$	(48,251	)	$	26,913



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 Statement of Operations
For the three months ended March 29, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	3,054		$	3,817		$	(3,197	)	$	3,674
Cost of revenue	—			2,655			3,667			(3,227		)	3,095
Gross profit	—			399			150			30			579
Operating expenses:
Research and development	—			359			185			—			544
Selling, general and administrative	1			199			153			—			353
Intercompany operating expense (income)	—			(394		)	394			—			—
Employee termination, asset impairment, and other charges	—			42			34			—			76
Total operating expenses	1			206			766			—			973
Operating income (loss)	(1		)	193			(616		)	30			(394		)
Interest and other income (expense):
Interest income	—			5			11			(3		)	13
Interest expense	(119		)	(1		)	(1		)	3			(118		)
Other income, net	—			—			22			—			22
Total interest and other income (expense), net	(119		)	4			32			—			(83		)
Income (loss) before taxes	(120		)	197			(584		)	30			(477		)
Equity in earnings from subsidiaries	(558		)	(732		)	—			1,290			—
Income tax expense (benefit)	(97		)	52			149			—			104
Net loss	$	(581	)	$	(587	)	$	(733	)	$	1,320		$	(581	)



Condensed Consolidating Statement of Operations
For the nine months ended March 29, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	9,931		$	13,670		$	(10,666	)	$	12,935
Cost of revenue	—			8,602			11,706			(10,660		)	9,648
Gross profit	—			1,329			1,964			(6		)	3,287
Operating expenses:
Research and development	—			1,056			603			—			1,659
Selling, general and administrative	2			664			352			—			1,018
Intercompany operating expense (income)	—			(1,148		)	1,148			—			—
Employee termination, asset impairment, and other charges	—			80			62			—			142
Total operating expenses	2			652			2,165			—			2,819
Operating income (loss)	(2		)	677			(201		)	(6		)	468
Interest and other income (expense):
Interest income	10			12			35			(14		)	43
Interest expense	(353		)	(9		)	(4		)	14			(352		)
Other income (expense), net	1			(2		)	29			—			28
Total interest and other income (expense), net	(342		)	1			60			—			(281		)
Income (loss) before taxes	(344		)	678			(141		)	(6		)	187
Equity in earnings from subsidiaries	(551		)	(520		)	—			1,071			—
Income tax expense (benefit)	(338		)	702			380			—			744
Net loss	$	(557	)	$	(544	)	$	(521	)	$	1,065		$	(557	)



Condensed Consolidating Statement of Operations
For the three months ended March 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	3,685		$	4,924		$	(3,596	)	$	5,013
Cost of revenue	—			3,209			3,499			(3,622		)	3,086
Gross profit	—			476			1,425			26			1,927
Operating expenses:
Research and development	—			361			241			—			602
Selling, general and administrative	3			264			109			—			376
Intercompany operating expense (income)	(12		)	(391		)	403			—			—
Employee termination, asset impairment, and other charges	1			9			25			—			35
Total operating expenses	(8		)	243			778			—			1,013
Operating income	8			233			647			26			914
Interest and other income (expense):
Interest income	42			2			12			(40		)	16
Interest expense	(160		)	(5		)	(35		)	40			(160		)
Other expense, net	(894		)	(7		)	(7		)	10			(898		)
Total interest and other expense, net	(1,012		)	(10		)	(30		)	10			(1,042		)
Income (loss) before taxes	(1,004		)	223			617			36			(128		)
Equity in earnings from subsidiaries	837			562			—			(1,399		)	—
Income tax expense (benefit)	(228		)	22			17			—			(189		)
Net income	$	61		$	763		$	600		$	(1,363	)	$	61



Condensed Consolidating Statement of Operations
For the nine months ended March 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Revenue, net	$	—		$	11,159		$	15,178		$	(10,807	)	$	15,530
Cost of revenue	—			9,665			10,849			(10,837		)	9,677
Gross profit	—			1,494			4,329			30			5,853
Operating expenses:
Research and development	—			1,142			681			—			1,823
Selling, general and administrative	6			798			317			—			1,121
Intercompany operating expense (income)	(12		)	(1,221		)	1,233			—			—
Employee termination, asset impairment, and other charges	1			30			104			—			135
Total operating expenses	(5		)	749			2,335			—			3,079
Operating income	5			745			1,994			30			2,774
Interest and other income (expense):
Interest income	189			6			38			(187		)	46
Interest expense	(561		)	(15		)	(173		)	187			(562		)
Other income (expense), net	(902		)	—			(10		)	10			(902		)
Total interest and other expense, net	(1,274		)	(9		)	(145		)	10			(1,418		)
Income (loss) before taxes	(1,269		)	736			1,849			40			1,356
Equity in earnings from subsidiaries	869			1,747			—			(2,616		)	—
Income tax expense (benefit)	(319		)	1,677			79			—			1,437
Net income (loss)	$	(81	)	$	806		$	1,770		$	(2,576	)	$	(81	)



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the three months ended March 29, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net loss	$	(581	)	$	(587	)	$	(733	)	$	1,320		$	(581	)
Other comprehensive income (loss), before tax:
Actuarial pension gain	—			—			—			—			—
Foreign currency translation adjustment	(2		)	(2		)	(2		)	4			(2		)
Net unrealized gain (loss), on derivative contracts and available-for-sale securities	(24		)	1			1			(2		)	(24		)
Total other comprehensive income (loss), before tax	(26		)	(1		)	(1		)	2			(26		)
Income tax benefit (expense) related to items of other comprehensive income (loss)	5			—			—			1			6
Other comprehensive income (loss), net of tax	(21		)	(1		)	(1		)	3			(20		)
Total comprehensive loss	$	(602	)	$	(588	)	$	(734	)	$	1,323		$	(601	)



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the nine months ended March 29, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net loss	$	(557	)	$	(544	)	$	(521	)	$	1,065		$	(557	)
Other comprehensive income (loss), before tax:
Actuarial pension gain	1			1			1			(2		)	1
Foreign currency translation adjustment	(8		)	(4		)	(4		)	8			(8		)
Net unrealized gain (loss), on derivative contracts and available-for-sale securities	(18		)	23			21			(44		)	(18		)
Total other comprehensive income (loss), before tax	(25		)	20			18			(38		)	(25		)
Income tax benefit (expense) related to items of other comprehensive income (loss)	9			(2		)	(1		)	3			9
Other comprehensive income (loss), net of tax	(16		)	18			17			(35		)	(16		)
Total comprehensive loss	$	(573	)	$	(526	)	$	(504	)	$	1,030		$	(573	)



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the three months ended March 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net income	$	61		$	763		$	600		$	(1,363	)	$	61
Other comprehensive income, before tax:
Actuarial pension gain	1			1			1			(2		)	1
Foreign currency translation adjustment	76			75			75			(150		)	76
Net unrealized gain on derivative contracts and available-for-sale securities	18			10			11			(21		)	18
Total other comprehensive income, before tax	95			86			87			(173		)	95
Income tax expense related to items of other comprehensive income	(3		)	(2		)	(3		)	5			(3		)
Other comprehensive income, net of tax	92			84			84			(168		)	92
Total comprehensive income	$	153		$	847		$	684		$	(1,531	)	$	153



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the nine months ended March 30, 2018

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Net income (loss)	$	(81	)	$	806		$	1,770		$	(2,576	)	$	(81	)
Other comprehensive income, before tax:
Actuarial pension gain	1			1			1			(2		)	1
Foreign currency translation adjustment	78			76			76			(152		)	78
Net unrealized gain on derivative contracts and available-for-sale securities	31			15			16			(31		)	31
Total other comprehensive income, before tax	110			92			93			(185		)	110
Income tax expense related to items of other comprehensive income	(6		)	(2		)	(4		)	6			(6		)
Other comprehensive income, net of tax	104			90			89			(179		)	104
Total comprehensive income	$	23		$	896		$	1,859		$	(2,755	)	$	23



Condensed Consolidating Statement of Cash Flows
For the nine months ended March 29, 2019

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Company
	(in millions)
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	87		$	(1,115	)	$	2,461		$	(55	)	$	1,378
Cash flows from investing activities
Purchases of property, plant and equipment	—			(198		)	(524		)	—			(722		)
Proceeds from the sale of property, plant and equipment	—			—			3			—			3
Purchases of investments	—			(11		)	(58		)	—			(69		)
Proceeds from sale of investments	—			—			49			—			49
Proceeds from maturities of investments	—			—			7			—			7
Notes receivable issuances to Flash Ventures	—			—			(858		)	—			(858		)
Notes receivable proceeds from Flash Ventures	—			—			570			—			570
Strategic investments and other, net	—			1			(23		)	—			(22		)
Intercompany loan from (to) consolidated affiliates	943			(541		)	—			(402		)	—
Advances from (to) parent and consolidated affiliates	(243		)	243			—			—			—
Net cash provided by (used in) investing activities	700			(506		)	(834		)	(402		)	(1,042		)
Cash flows from financing activities										—
Issuance of stock under employee stock plans	66			—			—			—			66
Taxes paid on vested stock awards under employee stock plans	(109		)	—			—			—			(109		)
Repurchases of common stock	(563		)	—			—			—			(563		)
Repayment of revolving credit facility	—			—			—			—			—
Dividends paid to shareholders	(438		)	—			—			—			(438		)
Repayment of debt	(113		)	—			—			—			(113		)
Proceeds from (repayment of) revolving credit facility	(500		)	—			—			—			(500		)
Intercompany loan from (to) consolidated affiliates	541			(377		)	(566		)	402			—
Change in investment in consolidated subsidiaries	298			2,349			(2,702		)	55			—
Net cash provided by (used in) financing activities	(818		)	1,972			(3,268		)	457			(1,657		)
Effect of exchange rate changes on cash	—			—			(2		)	—			(2		)
Net increase (decrease) in cash and cash equivalents	(31		)	351			(1,643		)	—			(1,323		)
Cash and cash equivalents, beginning of year	40			668			4,297			—			5,005
Cash and cash equivalents, end of period	$	9		$	1,019		$	2,654		$	—		$	3,682



Condensed Consolidating Statement of Cash Flows
For the nine months ended March 30, 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	$	(130	)	$	405		$	3,284		$	(217	)	$	3,342
Cash flows from investing activities
Purchases of property, plant and equipment	—			(162		)	(481		)	—			(643		)
Proceeds from the sale of property, plant and equipment	—			—			24			—			24
Acquisitions, net of cash acquired	—			(93		)	(6		)	—			(99		)
Purchases of investments	—			(11		)	(55		)	—			(66		)
Proceeds from sale of investments	—			—			39			—			39
Proceeds from maturities of investments	—			—			16			—			16
Notes receivable issuances to Flash Ventures	—			—			(1,015		)	—			(1,015		)
Notes receivable proceeds from Flash Ventures	—			—			308			—			308
Strategic investments and other, net	—			(1		)	31			—			30
Intercompany loan from consolidated affiliates	3,295			—			—			(3,295		)	—
Advances from (to) parent and consolidated affiliates	(47		)	47			—			—			—
Net cash provided by (used in) investing activities	3,248			(220		)	(1,139		)	(3,295		)	(1,406		)
Cash flows from financing activities
Issuance of stock under employee stock plans	146			—			—			—			146
Taxes paid on vested stock awards under employee stock plans	(164		)	—			—			—			(164		)
Repurchases of common stock	(155		)	—			—			—			(155		)
Dividends paid to shareholders	(443		)	—			—			—			(443		)
Settlement of debt hedge contracts	28			—			—			—			28
Repayment of debt	(14,581		)	—			—			—			(14,581		)
Proceeds from debt	11,384			—			—			—			11,384
Proceeds from (repayment of) revolving credit facility	500			—			—			—			500
Debt issuance costs	(52		)	—			—			—			(52		)
Intercompany loan to consolidated affiliates	—			(205		)	(3,090		)	3,295			—
Change in investment in consolidated subsidiaries	319			(463		)	(73		)	217			—
Net cash used in financing activities	(3,018		)	(668		)	(3,163		)	3,512			(3,337		)
Effect of exchange rate changes on cash	—			—			10			—			10
Net increase (decrease) in cash and cash equivalents	100			(483		)	(1,008		)	—			(1,391		)
Cash and cash equivalents, beginning of year	18			1,212			5,124			—			6,354
Cash and cash equivalents, end of period	$	118		$	729		$	4,116		$	—		$	4,963