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WESTERN DIGITAL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND INFORMATION

On February 21, 2025 (the “Separation Date”), Western Digital Corporation (“WDC”) completed the previously announced separation of its Flash business unit into a separate company, Sandisk Corporation (“Sandisk”). Sandisk is now an independent public company trading under the symbol “SNDK” on the Nasdaq Stock Market LLC.

The financial and operating results of Sandisk subsequent to the Separation Date are no longer consolidated into WDC’s financial and operating results, and the historical results and financial position of Sandisk for all periods prior to the Separation Date have been reflected as discontinued operations in the WDC financial information included in this presentation.

The preliminary amounts reflected as discontinued operations in WDC’s financial information in this presentation include the assets, liabilities, and equity and results of operations attributable to Sandisk that were included in WDC’s historical financial statements. In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the amounts reported as continuing operations include general corporate overhead costs that were historically allocated to Sandisk that do not meet the requirements to be presented in discontinued operations. Such allocations included labor and non-labor expenses related to WDC’s corporate support functions (e.g., finance, accounting, tax, treasury, information technology, human resources, and legal, among others) that historically provided support to Sandisk. As a result, the amounts reflected as discontinued operations in the accompanying financial information will differ from the historical Condensed Combined Financial Statements of Sandisk filed by Sandisk with the United States Securities and Exchange Commission (“SEC”). Please refer to Sandisk’s SEC filings for the basis of accounting reflected in Sandisk’s stand-alone results.

The accompanying financial information does not include transaction accounting adjustments reflected in WDC’s Current Report on Form 8-K/A filed with the SEC on February 26, 2025.


WESTERN DIGITAL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par value; unaudited)

FY 2022FY 2023Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
ASSETS
Current assets:
Cash and cash equivalents$1,992 $1,731 $1,830 $2,056 $1,517 $1,551 $1,383 $1,487 
Accounts receivable, net1,515 1,082 821 839 986 1,231 1,421 1,693 
Inventories1,646 1,429 1,621 1,604 1,485 1,387 1,315 1,248 
Other current assets392 302 342 348 371 360 403 403 
Current assets of discontinued operations3,908 3,342 2,963 2,991 3,173 3,531 4,420 4,541 
Total current assets9,453 7,886 7,577 7,838 7,532 8,060 8,942 9,372 
Property, plant and equipment, net2,614 2,670 2,525 2,500 2,453 2,359 2,340 2,351 
Goodwill4,323 4,321 4,320 4,320 4,320 4,319 4,321 4,319 
Other intangible assets, net80 80 80 79 78 78 77 77 
Other non-current assets642 529 552 650 684 759 890 835 
Non-current assets of discontinued operations9,258 9,060 9,052 8,998 8,734 8,613 8,201 8,502 
Total assets$26,370 $24,546 $24,106 $24,385 $23,801 $24,188 $24,771 $25,456 
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$1,429 $959 $884 $1,108 $1,014 $1,054 $1,281 $1,307 
Accrued expenses1,038 802 877 647 588 1,053 1,071 1,140 
Income taxes payable845 960 664 484 461 471 390 400 
Accrued compensation374 271 270 270 326 435 398 360 
Current portion of long-term debt— 1,213 1,850 1,042 450 1,750 1,750 150 
Current liabilities of discontinued operations1,551 1,229 1,247 1,142 1,214 1,324 1,201 1,349 
Total current liabilities5,237 5,434 5,792 4,693 4,053 6,087 6,091 4,706 
Long-term debt7,022 5,857 5,822 7,351 7,318 5,684 5,650 7,216 
Other liabilities1,151 1,180 1,004 992 1,088 1,002 796 724 
Non-current liabilities of discontinued operations636 235 394 405 345 368 362 464 
Total liabilities14,046 12,706 13,012 13,441 12,804 13,141 12,899 13,110 
Convertible preferred stock, $0.01 par value; authorized — 5 shares— 876 876 876 876 229 229 229 
Total shareholders’ equity12,324 10,964 10,218 10,068 10,121 10,818 11,643 12,117 
Total liabilities, convertible preferred stock and shareholders’ equity$26,370 $24,546 $24,106 $24,385 $23,801 $24,188 $24,771 $25,456 


WESTERN DIGITAL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts; unaudited)

FY 2022FY 2023FY 2024Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Revenue, net$9,039 $6,255 $6,317 $1,194 $1,367 $1,752 $2,004 $2,212 $2,409 
Cost of revenue6,504 4,864 4,544 950 1,054 1,233 1,307 1,407 1,502 
Gross profit2,535 1,391 1,773 244 313 519 697 805 907 
Operating expenses:
Research and development1,238 986 950 217 223 243 267 262 225 
Selling, general and administrative866 807 726 190 176 176 184 204 132 
Litigation matter— — 291 — — — 291 3 — 
Employee termination, asset impairment and other22 146 209 141 16 6 46 3 (10)
Total operating expenses2,126 1,939 2,176 548 415 425 788 472 347 
Operating income (loss)409 (548)(403)(304)(102)94 (91)333 560 
Total interest and other expense, net(289)(301)(336)(93)(35)(106)(102)(88)(94)
Income (loss) before taxes120 (849)(739)(397)(137)(12)(193)245 466 
Income tax expense
410 53 26 (32)9 (4)53 90 — 
Net income (loss) from continuing operations(290)(902)(765)(365)(146)(8)(246)155 466 
Net income (loss) from discontinued operations,
net of taxes		1,836 (782)(33)(320)(141)143 285 338 128 
Net income (loss)$1,546 $(1,684)$(798)$(685)$(287)$135 $39 $493 $594 
Net income (loss) from continuing operations$(290)$(902)$(765)$(365)$(146)$(8)$(246)$155 $466 
Less: amount allocated to preferred shareholders— 24 54 15 14 15 10 6 11 
Net income (loss) from continuing operations attributable to common shareholders$(290)$(926)$(819)$(380)$(160)$(23)$(256)$149 $455 
Diluted net income (loss) from continuing operations per common share $(0.93)$(2.91)$(2.51)$(1.18)$(0.49)$(0.07)$(0.79)$0.42 $1.27 
Diluted weighted average shares outstanding312 318 326 323 325 335 326 357 357 


WESTERN DIGITAL CORPORATION
PRELIMINARY GAAP TO NON-GAAP RECONCILIATIONS
(in millions; unaudited)
FY 2022FY 2023FY 2024Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
GAAP gross profit$2,535 $1,391 $1,773 $244 $313 $519 $697 $805 $907 
Stock-based compensation expense34 35 36 10 10 8 8 10 9 
Amortization of acquired intangible assets2 1 2 — — 1 1 1 — 
Litigation matter— — — — — — — 9 10 
Other— 1 — — — — — — — 
Non-GAAP gross profit$2,571 $1,428 $1,811 $254 $323 $528 $706 $825 $926 
GAAP gross margin28.0 %22.2 %28.1 %20.4 %22.9 %29.6 %34.8 %36.4 %37.7 %
Non-GAAP gross margin28.4 %22.8 %28.7 %21.3 %23.6 %30.1 %35.2 %37.3 %38.4 %
GAAP operating expenses$2,126 $1,939 $2,176 $548 $415 $425 $788 $472 $347 
Stock-based compensation expense(189)(177)(166)(42)(41)(44)(39)(47)(21)
Litigation matter— — (291)— — — (291)(3)— 
Employee termination, asset impairment and other(22)(146)(209)(141)(16)(6)(46)(3)10 
Strategic review— (42)(38)(18)(20)— — — — 
Other(5)(2)(4)(2)— — (2)1 (1)
Non-GAAP operating expenses$1,910 $1,572 $1,468 $345 $338 $375 $410 $420 $335 
GAAP operating income (loss)$409 $(548)$(403)$(304)$(102)$94 $(91)$333 $560 
Gross profit adjustments36 37 38 10 10 9 9 20 19 
Operating expense adjustments216 367 708 203 77 50 378 52 12 
Non-GAAP operating income (loss)$661 $(144)$343 $(91)$(15)$153 $296 $405 $591 
GAAP interest and other expense, net$(289)$(301)$(336)$(93)$(35)$(106)$(102)$(88)$(94)
Non-cash economic interest30 — — — — — — — — 
Litigation matter— — — — — — — 2 4 
Other(31)(10)(59)— (61)3 (1)1 — 
Non-GAAP interest and other expense, net$(290)$(311)$(395)$(93)$(96)$(103)$(103)$(85)$(90)


WESTERN DIGITAL CORPORATION
PRELIMINARY GAAP TO NON-GAAP RECONCILIATIONS
(in millions; unaudited)
FY 2022FY 2023FY 2024Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
GAAP income (loss) before taxes$120 $(849)$(739)$(397)$(137)$(12)$(193)$245 $466 
Stock-based compensation expense223 212 202 52 51 52 47 57 30 
Amortization of acquired intangible assets2 1 2 — — 1 1 1 — 
Litigation matter— — 291 — — — 291 14 14 
Employee termination, asset impairment and other22 146 209 141 16 6 46 3 (10)
Strategic review— 42 38 18 20 — — — — 
Convertible debt activity30 — — — — — — — — 
Other(26)(7)(55)2 (61)3 1 — 1 
Non-GAAP income (loss) before taxes$371 $(455)$(52)$(184)$(111)$50 $193 $320 $501 


WESTERN DIGITAL CORPORATION
PRELIMINARY SUPPLEMENTAL FINANCIAL INFORMATION
(in millions, except working capital related metrics; unaudited)
FY 2022FY 2023FY 2024Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025Q2 2025
Revenue by end market(1)
Cloud$6,753 $4,753 $5,052 $854 $1,031 $1,455 $1,712 $1,909 $2,096 
Client1,038 691 577 149 151 140 137 139 140 
Consumer1,248 811 688 191 185 157 155 164 173 
Total revenue$9,039 $6,255 $6,317 $1,194 $1,367 $1,752 $2,004 $2,212 $2,409 
Capital expenditures$712 $602 $321 $100 $75 $68 $78 $29 $68 
Depreciation and amortization$417 $389 $347 $91 $88 $85 $83 $80 $84 
Stock-based compensation$223 $212 $202 $52 $51 $52 $47 $57 $30 
Changes in operating assets and liabilities — (increase)/decrease
N/A(3)
$188 $(552)$(467)$(303)$(109)$327 $(371)$(155)
Working Capital Related(2)
Days Sales Outstanding61 63 56 63 56 51 56 58 64 
Days Inventory Outstanding92 107 97 155 138 110 97 85 76 
Days Payables Outstanding(80)(72)(73)(85)(96)(75)(73)(83)(79)
Cash Conversion Cycle73 98 80 133 98 86 80 60 61 

(1) Cloud is primarily composed of products sold for public or private cloud environments and enterprise customers. Client is primarily comprised of products sold directly to original equipment manufacturers or via distribution. Consumer is primarily comprised of retail and other end-user products.

(2) The Working Capital Related items are defined as follows:
Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of Days in Period)
Days Inventory Outstanding (DIO) = Inventories / (Cost of Revenue / # of Days in Period)
Days Payables Outstanding (DPO) = Accounts Payable / (Cost of Revenue / # of Days in Period)
Cash Conversion Cycle = DSO + DIO - DPO

Revenue and cost of revenue are not readily available on a continuing operations basis for the fourth quarters of fiscal 2023 or fiscal 2022. As such, DSO, DIO and DPO are based on revenue and cost of revenue for the full fiscal years of those periods.

(3) Not available as a balance sheet is not available on a continuing operations basis prior to fiscal 2022.



Notes to Preliminary GAAP to Non-GAAP Reconciliations

To supplement the condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the tables above set forth Non-GAAP gross profit; Non-GAAP gross margin; Non-GAAP operating expenses; Non-GAAP operating income and loss; Non-GAAP interest and other expense, net; and Non-GAAP income and loss before taxes (“Non-GAAP measures”). These Non-GAAP measures are not alternatives for measures prepared in accordance with GAAP and may be different from similarly titled Non-GAAP measures used by other companies. WDC believes the presentation of these Non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors for measuring WDC’s financial and operating performance and comparing it against prior periods. Specifically, WDC believes these Non-GAAP measures provide useful information to both management and investors as they exclude certain expenses, gains and losses that WDC believes are not indicative of its core operating results or because they are consistent with the financial models and estimates published by many analysts who follow WDC and its peers. As discussed further below, these Non-GAAP measures exclude, as applicable, stock-based compensation expense; amortization of acquired intangible assets; charges related to a litigation matter; employee termination, asset impairment and other; expenses related to our strategic review; and other adjustments. WDC believes these measures along with the related reconciliations to the GAAP measures provide additional detail and comparability for assessing WDC’s results. These Non-GAAP measures are some of the primary indicators management uses for assessing WDC’s performance and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

As described above, WDC excludes the following items from its Non-GAAP measures:

Stock-based compensation expense. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside WDC’s control, WDC believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time and compare it against WDC’s peers, a majority of whom also exclude stock-based compensation expense from their Non-GAAP results.

Amortization of acquired intangible assets. WDC incurs non-cash expenses from the amortization of acquired intangible assets over their economic lives. Such charges are significantly impacted by the timing and magnitude of WDC’s acquisitions and any related impairment charges.





Litigation matter. WDC has recognized expenses related to a recent judgment in a patent litigation matter, which consisted of an award of damages, prejudgment interest, and estimated plaintiff legal costs. WDC also recognized expenses in its cost of revenue related to the amortization of patent licenses that WDC has capitalized related to this litigation matter. WDC believes these charges do not reflect WDC’s operating results and that they are not indicative of the underlying performance of its business. For further information regarding the litigation matter, see Note 17 to the notes to consolidated financial statements included in WDC’s Annual Report on Form 10-K filed with the SEC on August 20, 2024.

Employee termination, asset impairment and other. From time to time, in order to realign WDC’s operations with anticipated market demand or to achieve cost synergies from the integration of acquisitions, WDC may terminate employees and/or restructure its operations. From time to time, WDC may also incur charges from the impairment of intangible assets and other long-lived assets. In addition, WDC may record credits related to gains upon sale of property due to restructuring or reversals of charges recorded in prior periods. These charges or credits are inconsistent in amount and frequency, and WDC believes they are not indicative of the underlying performance of its business.

Strategic review. WDC incurred expenses associated with its review of strategic alternatives that resulted in the planned separation of its HDD and Flash business units to create two independent, public companies. WDC believes these charges do not reflect WDC’s operating results and that they are not indicative of the underlying performance of its business.

Other adjustments. From time to time, WDC sells or impairs investments or other assets that are not considered necessary to its business operations, or incurs other charges or gains that WDC believes are not a part of the ongoing operation of its business. The resulting expense or benefit is inconsistent in amount and frequency.