#1Fiscal Fourth Quarter & Year 2022 Financial Results Western Digital August 5, 2022 ་་ Western Digital.#22 WESTERN DIGITAL CONFIDENTIAL Forward Looking Statements SAFE HARBOR © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED This presentation contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for the company's business outlook and financial performance for the fiscal first quarter of 2023; product ramps; product momentum; and capital expenditure and allocation priorities. 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 from those expressed or implied in the forward-looking statements. Key risks and uncertainties include future responses to and effects of the COVID-19 pandemic; volatility in global economic conditions; impact of business and market conditions; the outcome and impact of our ongoing strategic review, including with respect to customer and supplier relationships, regulatory and contractual restrictions, stock price volatility and the diversion of management's attention from ongoing business operations and opportunities; impact of competitive products and pricing; our development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with cost saving initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and our strategic relationships; difficulties or delays in manufacturing or other supply chain disruptions; hiring and retention of key employees; our level of debt and other financial obligations; changes to our relationships with key customers; disruptions in operations from cybersecurity incidents or other system security risks; actions by competitors; risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings; and other risks and uncertainties listed in the company's filings with the Securities and Exchange Commission (the "SEC") and available on the SEC's website at www.sec.gov, including our Form 10-K filed with the SEC on August 27, 2021, to which your attention is directed. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements to reflect new information or events, except as required by law. This presentation also contains preliminary financial results for the company's fiscal fourth quarter ended July 1, 2022 and fiscal year 2022. These preliminary financial results represent the most current information available to management. The company's actual results when disclosed in its Form 10-K for the year ended July 1, 2022 may differ from these preliminary results as a result of the completion of the company's financial closing procedures; final adjustments; completion of the review and audit by the company's independent registered accounting firm; and other developments that may arise between now and disclosure of the final results. This presentation includes references to Non-GAAP financial measures. Reconciliations of the differences between the Non-GAAP measures provided in this presentation to the comparable GAAP financial measures are included in the appendix and in the Investor Relations section of our website. We have not fully reconciled our Non-GAAP financial measure guidance to the most directly comparable GAAP measures because material items that impact these measures are not in our control and/or cannot be reasonably predicted. Accordingly, a full reconciliation of the Non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.#33 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Fiscal Fourth Quarter Executive Summary Financial Results Revenue of $4.5B . Operating cash flow of $295M • Non-GAAP diluted net earnings per share of $1.78 • Free cash flow of $(97)M • Non-GAAP gross margin of 32.3% • Cash and cash equivalents of $2.3B Corporate Flash • · • • Our longstanding and growing relationships with hyperscale and OEM customers across the world, coupled with our leadership in commercializing innovations for capacity enterprise hard drives and momentum with NVMe enterprise SSD for datacenter, have made us a trusted partner. Enterprise SSD revenue more than doubled sequentially in the quarter and for fiscal year 2022. Gaming exabyte shipment grew nearly 70% year-over-year. WD_BLACK SSD certified for Sony PS5 game consoles. BiCS5 represented approximately half of Flash revenue, and we are preparing to ramp BiCS6 late this calendar year and into 2023. Hard Drives • • • • Strong demand from our cloud customers for our latest generation energy assisted drives drove a near record nearline shipment of 111 exabytes. Shipping 22-terabyte CMR drives, and qualification of our 26-terabyte SMR drive is underway. Ramping a second cloud customer with SMR technology this quarter and remain on track to lead the industry's transition to SMR based drives for the cloud. Confident in our multi-year product roadmap of capacity enterprise drives, which combine ePMR, OptiNAND, UltraSMR and triple stage actuators to deliver a cutting-edge portfolio of drives, in commercial volumes, at a wide variety of capacity points. See Appendix for GAAP to non-GAAP Reconciliations.#4WESTERN DIGITAL CONFIDENTIAL Revenue Trends by End Market In billions Cloud $2.4 $ 2.0 $ 1.6 $ 1.2 $ 0.8 $ 0.4 $- Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Revenue $2.1 billion Increased 18% QoQ Increased 5% YoY In billions Client $2.4 $ 2.0 $ 1.6 $ 1.2 $ 0.8 $ 0.4 IIIII Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Revenue $1.6 billion Decreased 5% QoQ Decreased 14% YoY © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED In billions Consumer $2.4 $2.0 $ 1.6 $ 1.2 $ 0.8 $ 0.4 $- ||||| Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Revenue $0.8 billion Decreased 9% QoQ Decreased 23% YoY#55 WESTERN DIGITAL CONFIDENTIAL Flash and Hard Drive Metrics Flash Revenue and Gross Margin In billions $2.8 $2.4 $2.0 $1.6 $1.2 $0.8 $0.4 Flash In billions 40% $2.8 35% $2.4 30% $2.0 25% $1.6 20% $1.2 15% $0.8 10% 5% $0.4 0% Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Revenue Gross Margin (%) Q4F22 Results Bit shipments: increased 6% QoQ ASP/Gigabyte: Blended: increased 2% QoQ Like-for-like: up slightly QoQ See Appendix for Supplemental Operating Segment Results. © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Hard Drive Revenue and Gross Margin 40% 35% 30% 25% 20% 15% 10% 5% 0% Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Revenue Gross Margin (%) Hard Drive Q4F22 Results Exabyte shipments: increased 1% QoQ ASP per drive: $120#66 WESTERN DIGITAL CONFIDENTIAL Non-GAAP Financial Results ($ in millions, except for EPS) © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Q4F21 Q3F22 Q4F22 QoQ YOY Revenue $ 4,920 $ 4,381 $ 4,528 Up 3% Down 8% Down 0.6 Gross Margin % 32.9% 31.7% 32.3% Up 0.6 ppt ppt Operating Expenses $ 790 $ 740 $ 760 Up 3% Down 4% Operating Income $ 828 $ 650 $ 702 Up 8% Down 15% Interest and Other Expense, net $ 79 $ 64 $ 65 Up 2% Down 18% EPS - Diluted $ 2.16 $ 1.65 $1.78 Up 8% Down 18% Operating Cash Flow $ 994 $ 398 $295 Down 26% Down 70% Free Cash Flow $ 792 $ 148 $ (97) * See Appendix for GAAP to Non-GAAP Reconciliations. * Not a meaningful figure#77 WESTERN DIGITAL CONFIDENTIAL Cash Flow Walk In millions $295 $2,505 © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED $2,327 $(392) $(150) $69 (1) (2) Q3F22 Cash & Cash Equivalents Operating Cash Cash CapEx Debt Repayment Other Flow Q4F22 Cash & Cash Equivalents ☐ Made scheduled and discretionary debt repayment of $150 million Strong liquidity position of $4.58 billion, including $2.25 billion undrawn revolver Cash Capital Expenditures includes purchases of property, plant and equipment, net, and notes receivable issuances to Flash Ventures, net. 1. 2. Other primarily consists of debt issuance costs, employee stock plans, net and strategic investments and other, net.#88 WESTERN DIGITAL CONFIDENTIAL Fiscal First Quarter Guidance Revenue ($B) Gross Margin % Operating Expenses ($M) Interest and Other Expense, net ($M) Tax Rate % EPS - Diluted Share Count - Diluted (in millions) (1) © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP $3.60 - $3.80 27.1% 29.1% - Non-GAAP (2) $3.60 - $3.80 27.5% -29.5% $870 - $890 $760 - $780 -$70 -$70 N/A 28% - 30% (3) N/A -319 $0.35 - $0.65 ~319 12 1. Guidance as shown is as of August 5, 2022. 2. 3. Non-GAAP gross margin guidance excludes stock-based compensation expense of approximately $10 million to $15 million. The company's Non-GAAP operating expenses guidance excludes amortization of acquired intangible assets and stock-based compensation expense, totaling approximately $100 million to $120 million. In the aggregate, Non-GAAP diluted earnings per share guidance excludes these items totaling $110 million to $135 million. The timing and amount of these charges excluded from Non-GAAP gross margin, Non-GAAP operating expenses, and Non-GAAP diluted earnings per share cannot be further allocated or quantified with certainty. Additionally, the timing and amount of additional charges the company excludes from its Non-GAAP tax rate and Non-GAAP diluted earnings per share are dependent on the timing and determination of certain actions and cannot be reasonably predicted. Accordingly, full reconciliations of Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP tax rate and Non-GAAP diluted earnings per share to the most directly comparable GAAP financial measures (gross margin, operating expenses, tax rate and diluted earnings per share, respectively) are not available without unreasonable effort. The Non-GAAP tax rate provided is based on a percentage of Non-GAAP pre-tax income. Due to differences in the tax treatment of items excluded from our Non-GAAP net income and because our tax rate is based on an estimated forecasted annual GAAP tax rate, our estimated Non-GAAP tax rate may differ from our GAAP tax rate and from our actual tax rates. Tax law changes that became effective for our fiscal year 2023 require the capitalization of certain R&D costs that were previously eligible for immediate deduction from taxable income. The impact of these tax law changes is expected to include an immediate increase in our tax rate of approximately 12 percentage points, which is reflected in the guidance provided in the table above. This immediate increase of higher tax rate is expected to decrease gradually over time.#99 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Joint Venture Operational Framework For more information on Flash Ventures, please visit investor.wdc.com for a recently published Flash Ventures presentation. Western Digital. Co-develops flash (including process technology and memory design) with Kioxia and contributes IP for Flash Ventures' use Performs integral manufacturing and R&D functions at Flash Ventures' manufacturing sites Purchases Flash Ventures' wafers at cost plus a small markup Pays Flash Ventures' expenses (including equipment depreciation and lease expense) Funds Flash Ventures' equipment purchases (via loans, equity and lease guarantees) in excess of Flash Ventures' operating cash flow Flash Ventures 49.9% Owned by Western Digital 50.1% Owned by Kioxia Owns and leases equipment for flash wafer production and R&D line Purchases wafers from Kioxia at cost under foundry agreements Sells wafers to Western Digital and Kioxia at cost plus a small markup Charges expenses to Western Digital and Kioxia (including equipment depreciation and lease expense) Borrows from Western Digital and Kioxia for a portion of their equipment purchases Repays loans for equipment purchases using excess operating cash flow KIOXIA Co-develops flash (including process technology and memory design) with Western Digital and contributes IP for Flash Ventures' use Performs integral manufacturing and R&D functions at Flash Ventures' manufacturing sites Purchases Flash Ventures' wafers at cost plus a small markup Pays Flash Ventures' expenses (including equipment depreciation and lease expense) Funds Flash Ventures' equipment purchases (via loans, equity, and lease guarantees) in excess of Flash Ventures' operating cash flow Owns and operates cleanrooms Provides wafer manufacturing services to Flash Ventures at cost#1010 WESTERN DIGITAL CONFIDENTIAL Capital Expenditure Framework 1. 2. 3. Cash Capital Expenditures (¹) Flash Ventures Capital Expenditures Gross Capital Expenditures 1 2 Flash HDD CapEx Non-Fab CapEx 3 Flash Ventures Parent Loans (2) 3 Flash Ventures Parent Loans (2)+ 2 3 HDD CapEx + Flash Non-Fab CapEx Flash Ventures + Parent Loans (2) Cash Capital Expenditures includes purchases of property, plant and equipment, net, and notes receivable issuances to Flash Ventures, net. Flash Ventures Parent Loans, Flash Ventures Lease Financing, and Flash Ventures Net Operating Cash Flow are comprised only of Western Digital's portions. Flash Ventures Net Operating Cash Flow is primarily generated from equipment depreciation payments. 4 4 © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Flash Ventures Lease Financing(2) Flash Ventures Lease Financing(2) + 5 + 5 Flash Ventures Net Operating Cash Flow (2)(3) Flash Ventures Net Operating Cash Flow (2)(3)#1111 WESTERN DIGITAL CONFIDENTIAL Gross Capital Expenditure Trends In billions $ 3.5 © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED $ 3.0 $2.5 $ 1.6 | $ 2.0 $ 1.0 $ 1.6 $ 1.5 $ 1.9 $ 1.5 $ 1.0 $ 2.0 $ 1.6 $ 1.6 $ 1.4 $ 1.2 $ 0.5 $ 0.8 $ 0.0 -$ 0.3 -$ 0.5 (1) FY18 FY19 FY20 FY21 FY22 FY23F (2) (3) Cash CapEx OWD portion of: Flash Ventures Cash Flow + Flash Ventures Lease Financing 1. FY23F: Gross Capital Expenditures of ~$3.2 billion, of which Cash Capital Expenditures = ~$1.6 billion. 2. Cash Capital Expenditures includes purchases of property, plant and equipment, net, and notes receivable issuances to Flash Ventures, net. 3. Flash Ventures Net Operating Cash Flow and Flash Ventures Lease Financing are comprised only of Western Digital's portions.#1212 WESTERN DIGITAL CONFIDENTIAL Capital Allocation Framework Highest Priority Reinvestment in the Company © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Strategically reinvest to drive innovation Reduce Leverage Target 1.0x 3.25x Debt-to-EBITDA Shareholder Return Dividend Program Share Repurchases Committed to returning excess cash to shareholders#1313 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Appendix#1414 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Quarterly Fact Sheet In millions, except Average Selling Price (ASP), percentages, and working capital related metrics Revenue by End Market (1) Cloud Client Consumer Total Revenue Segment Results Flash Revenue HDD Revenue Total Revenue Flash Gross Margin HDD Gross Margin Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 $1,995 1,895 1,030 1,854 1,059 $ 4,920 $ 5,051 $ 4,833 $ 2,419 $ 2,490 $ 2,620 2,501 2,561 2,213 $ 2,225 1,853 973 $ 1,920 $ 1,774 1,732 875 $ 4,381 $2,098 1,637 793 $ 4,528 $ 2,400 2,128 $ 2,243 2,138 $ 4,920 $ 5,051 $ 4,833 $ 4,381 $ 4,528 35.5% 37.0% 36.1% 35.6% 35.9% 30.3% 30.9% 30.6% 27.7% Total Gross Margin for Segments (2) 32.9% 33.9% 33.6% 31.7% 28.2% 32.3% Exabyte Metrics QoQ Change in Flash Exabytes Sold (3) 4% 8% 13% (14%) 6% QoQ Change in HDD Exabytes Sold (3) 34% 4% (14%) 1% 1% QoQ Change in Total Exabytes Sold (3) 30% 4% (11%) (2%) 2% Flash Metrics QoQ Change in ASP/Gigabytes (3) 7% (3%) (6%) (1%) 2% HDD Metrics Cloud Units Client Units Consumer Units Total HDD Units (4) HDD ASP(5) Cash and Cash Equivalents Cash Flows Cash Flows provided by Operating Activities Purchases of Property, Plant and Equipment, net 11.0 11.4 9.8 9.7 9.3 9.3 7.8 6.7 5.7 3.9 5.0 4.9 5.1 4.4 3.3 25.3 24.1 21.6 19.8 16.5 $ 97 $ 102 $ 97 $ 101 $ 120 $ 3,370 Activity Related to Flash Ventures, net Free Cash Flow (6) Working Capital Related Days Sales Outstanding Days Inventory Outstanding Days Payables Outstanding Cash Conversion Cycle $ 994 (304) 102 $ 3,290 $ 521 (245) (52) $ 2,531 $ 666 (294) 35 $ 407 52 $ 398 (290) $ 148 $ 2,505 $ 2,327 $ 295 (278) 40 (114) $ 792 $ 224 $ (97) 42 44 49 56 98 95 102 104 107 (63) (61) (68) (63) (66) 77 78 86 90 97#1515 WESTERN DIGITAL CONFIDENTIAL Quarterly Fact Sheet (continued) FOOTNOTES © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED FORMULAS Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of days in quarter) Days Inventory Outstanding (DIO) = Inventories / (Cost of Revenue / # of days in quarter) Days Payables Outstanding (DPO) = Accounts Payable (including Accounts Payable to Related Parties) / (Cost of Revenue 1 # of days in quarter) Cash Conversion Cycle = DSO + DIO - DPO FOOTNOTES 1. 2. Cloud is primarily comprised of products sold for public or private cloud environments and enterprise customers. Client is primarily comprised of products sold directly to OEMs or via distribution. Consumer is primarily comprised of retail and other end-user products. Total gross margin for segments is a Non-GAAP financial measure, which is also referred to herein as Non-GAAP gross margin. See Appendix for GAAP to Non-GAAP Reconciliations and Supplemental Operating Segment Results for further details. Excludes licensing, royalties, and non-memory products. 3. 4. HDD Unit volume excludes data storage systems and components. 5. 6. HDD ASP is calculated by dividing HDD revenue by HDD units. Data storage systems are excluded from this calculation, as data storage systems ASP is measured on a per system basis rather than a per drive basis. Free cash flow is defined as cash flows provided by operating activities less purchases of property, plant and equipment, net, plant and equipment, and the activity related to Flash Ventures, net. The company considers free cash flow generated in any period to be a useful indicator of cash that is available for strategic opportunities including, among others, investing in the company's business, making strategic acquisitions, repaying debt and strengthening the balance sheet.#1616 WESTERN DIGITAL CONFIDENTIAL Debt Capital Structure Current Cap Table © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Debt Maturity Profile (in billions) $ 4.0 Rate1 All-in Rate² As of July Maturity 1, 2022 $3.5 Over 80% of debt to mature in 2026 or later (in millions) Convertible Debt Due 20243 1.50% 1.50% 2/1/2024 $ 1,100 $ 3.0 Sr. Unsecured Notes Due 20264 4.75% 4.75% 2/15/2026 2,300 $2.5 $2.4 $2.3 $2.25B Revolver5,6 S+137.5 3.07% 1/7/2027 $2.3 Term Loan A-26 S+137.5 3.74%7 1/7/2027 2,700 $ 2.0 Sr. Unsecured Notes Due 20298 Sr. Unsecured Notes Due 20329 Total Debt 2.85% 2.85% 2/1/2029 500 $1.5 3.10% 3.10% 3.612%10 2/1/2032 500 $1.2 $ 7,100 $ 1.0 $1.1 $0.5 $0.5 $0.5 $- $0.2 $0.1 $0.1 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Term Loan A-2 Convertible Notes Sr. Unsecured Notes 123456780) 1. S Adjusted Term SOFR 2. 3. All-in applicable rates as of July 1, 2022. Applicable spread for Term Loan A-2 and Revolver over SOFR plus 0.10% based on credit ratings as of July 1, 2022 Initial conversion price of $121.91 per share. Notes became callable on February 5, 2021 4. Notes are callable beginning November 15, 2025 5. Revolver capacity: $2.25 billion, none of which was drawn as of July 1, 2022 6. Term Loan A-2 and Revolver have a SOFR floor of Obps 7. 8. Reflects impact of the interest rate swaps that effectively fix SOFR on $2 billion of floating-rate debt at 2.50% through February 2023 Notes are callable beginning December 1, 2028 9. Notes are callable beginning November 1, 2031 10. Weighted average interest rate, including impact of interest rate swaps, based on principal balances outstanding as of July 1, 2022#1717 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Net Income Income tax expense Interest and other expense, net Depreciation and amortization EBITDA(1) Contamination related charges Stock-based compensation expense Employee termination, asset impairment and other charges Recoveries from a power outage incident Other Adjusted EBITDA(2)(3) Total Debt (4) Debt to Adjusted EBITDA Flash Ventures equipment depreciation expenses Other Credit Agreement Adjustments (5) Credit Agreement Defined Adjusted EBITDA (6) Total Debt(4) Credit Agreement Defined Leverage Ratio(7) Q4F21 Q1F22 $ 821 $ 1,491 Q2F22 $ 1,993 Q3F22 Q4F22 $ 1,821 $ 1,500 106 143 202 387 623 293 294 302 296 268 1,212 1,088 994 959 929 $ 2,432 $ 3,016 $ 3,491 $ 3,463 $ 3,320 $ - $ - $ - $ 203 318 318 325 (47) (52) (52) (75) (45) 328 20 (7) $ 207 326 43 6 8 (7) 5 $ 2,632 $ 8,825 3.4X $ 1,035 (50) $ 3,617 $ 8,825 2.4X $ 3,243 $ 8,612 2.7X $ 1,017 (58) $ 4,202 $ 3,772 $ 7,400 2.0X $ 1,004 9 $ 8,612 2.0X $ 4,785 $ 7,400 1.5X $ 4,014 $ 7,250 7 $ 3,894 $ 7,100 1.8X 1.8X $929 2 11 $ 4,834 $ 990 $ 5,006 $ 7,250 1.4X $ 7,100 1.5X 1. 2. 3. EBITDA is defined as net income before income tax expense, interest and other expense, net, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA (as defined above), adjusted to exclude certain expenses, gains and losses that the company believes are not indicative of its core operating results or because these exclusions are consistent with the financial models and estimates published by many analysts who follow the company and its peers. See the GAAP to Non-GAAP reconciliation slides within the Appendix for further details. Adjusted EBITDA is not intended to reflect measures used under the company's debt agreements. 4. Total Debt is the total principal balance of debt outstanding as of the end of the applicable trailing 12-month period. 45 5. 6. 7. Other Credit Agreement Adjustments include other income and expenses, special charges and expected future cost savings from cost reduction initiatives as provided under the company's credit agreement applicable to Term Loan A-2 and Revolver. Credit Agreement Defined Adjusted EBITDA is used to measure financial covenant compliance under the company's credit agreement applicable to Term Loan A-2 and Revolver. Credit Agreement Defined Leverage Ratio is calculated as Total Debt divided by Credit Agreement Defined Adjusted EBITDA and is the Leverage Ratio as defined in the company's credit agreement for purpose of the financial covenant applicable to Term Loan A-2 and Revolver.#1818 WESTERN DIGITAL CONFIDENTIAL GAAP to Non-GAAP Reconciliations In millions; unaudited GAAP Gross Profit Contamination related charges Stock-based compensation expense Amortization of acquired intangible assets Recoveries from a power outage incident Non-GAAP Gross Profit GAAP Operating Expenses Stock-based compensation expense Amortization of acquired intangible assets Employee termination, asset impairment and other charges Other Non-GAAP Operating Expenses GAAP Operating Income Cost of revenue adjustments Operating expense adjustments Non-GAAP Operating Income GAAP Interest and Other Expense, Net Non-cash economic interest and Other Non-GAAP Interest and Other Expense, Net © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Q4F21 $ 1,566 - Q3F22 $ 1,181 203 Q4F22 $1,445 14 13 12 38 1 $ 1,618 $ 891 (38) (65) $ 1,390 $ 857 $1,462 $883 (73) (65) (39) (39) 4 (4) (19) (2) (1) $ 790 $ 740 $760 $ 675 $ 324 $562 52 209 101 117 17 123 828 ($79) $ 650 $702 ($62) ($51) (2) (14) ($ 79) ($64) ($65)#1919 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP to Non-GAAP Reconciliations (continued) In millions, except per share amounts; unaudited GAAP Net Income Contamination related charges Stock-based compensation expense Amortization of acquired intangible assets Recoveries from a power outage incident Employee termination, asset impairment and other charges Non-cash economic interest and Other Income tax adjustments Non-GAAP Net Income Diluted Income Per Common Share GAAP Non-GAAP Diluted Weighted Average Shares Outstanding GAAP Non-GAAP Q4F21 $ 622 Fe‛རྒྱ"®⌘ Q3F22 $ 25 203 86 39 (7) 4 (1) (4) 2 (95) $ 521 $ 680 $ 1.97 $2.16 315 315 172 $ 0.08 $ 1.65 316 316 Q4F22 $ 301 4 77 40 19 (14) 140 $ 567 $ 0.95 $ 1.78 318 318#2020 WESTERN DIGITAL CONFIDENTIAL ©2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Supplemental Operating Segment Results In millions, except percentages; unaudited Net Revenue Flash HDD Total Net Revenue Gross Profit By Segment Flash HDD Total Gross Profit for Segments Unallocated corporate items: Contamination related charges Stock-based compensation expense Amortization of acquired intangible assets Recoveries from a power outage incident Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 $ 2,419 2,501 $ 4,920 $ 2,490 2,561 $ 5,051 $ 2,620 2,213 $ 2,243 2,138 $ 2,400 2,128 $ 4,833 $ 4,381 $ 4,528 $ 859 $ 921 $ 946 $ 798 759 792 677 592 $ 862 600 $1,618 $ 1,713 $ 1,623 $ 1,390 $ 1,462 (203) (14) (9) (14) (13) (38) (39) (26) +S (4) (12) (1) (52) (48) (40) (209) (17) $1,566 $1,665 $ 1,583 $ 1,181 $1,445 Total unallocated corporate items Consolidated Gross Profit Gross Margin Flash(1) HDD(2) Total gross margin for segments (3) Consolidated total(4) 1. Flash gross margin is calculated by dividing Flash gross profit by Flash revenue. 2. HDD gross margin is calculated by dividing HDD gross profit by HDD revenue. 3. Total gross margin for segments is calculated by dividing total gross profit for segments by total revenue. 4. 35.5% 37.0% 36.1% 35.6% 35.9% 30.3% 30.9% 30.6% 27.7% 28.2% 32.9% 33.9% 33.6% 31.7% 32.3% 31.8% 33.0% 32.8% 27.0% 31.9% Consolidated total gross margin is calculated by dividing consolidated gross profit by total revenue. Note: In the table above, Total gross profit for segments and Total gross margin for segments are Non-GAAP financial measures, which are also referred to herein as Non-GAAP gross profit and Non-GAAP gross margin, respectively.#2121 WESTERN DIGITAL CONFIDENTIAL © 2022 WESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP to Non-GAAP Reconciliations FOOTNOTES This presentation contains the following financial measures that are not in accordance with U.S. generally accepted accounting principles ("GAAP"): Non-GAAP gross profit; Non-GAAP gross margin; Non-GAAP operating expenses; Non-GAAP operating income; Non-GAAP interest and other expense, net; Non-GAAP net income; Non-GAAP diluted income per common share; Adjusted EBITDA; Credit Agreement Defined Adjusted EBITDA; and free cash flow ("Non-GAAP measures"). These Non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from Non-GAAP measures used by other companies. The company believes the presentation of these Non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors for measuring the company's earnings performance and comparing it against prior periods. Specifically, the company believes these Non-GAAP measures provide useful information to both management and investors as they exclude certain expenses, gains and losses that the company 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 the company and its peers. As discussed further below, these Non-GAAP measures exclude, as applicable, contamination related charges, stock- based compensation expense, amortization of acquired intangible assets, recoveries from a power outage incident, employee termination, asset impairment and other charges, non-cash economic interest, other adjustments, and income tax adjustments, and the company believes these measures along with the related reconciliations to the GAAP measures provide additional detail and comparability for assessing the company's results. EBITDA and adjusted EBITDA are not intended to reflect measures used under the company's debt agreements. Credit Agreement Defined Adjusted EBITDA also is used to measure financial covenant compliance as defined under the company's credit agreement applicable to Term Loan A-2 and Revolver. These Non-GAAP measures are some of the primary indicators management uses for assessing the company'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, the company excludes the following items from its Non-GAAP measures: Contamination related charges. In February 2022, a contamination of certain materials used in the company's manufacturing process occurred and affected production operations at the flash-based memory manufacturing facilities in Yokkaichi and Kitakami, Japan, which are operated through the company's joint business ventures with Kioxia Corporation (collectively, "Flash Ventures"). The contamination resulted in scrapped inventory and rework costs, decontamination and other costs needed to restore the facilities to normal capacity, and under absorption of overhead costs which are expensed as incurred. These charges are inconsistent in amount and frequency, and the company believes these charges are not part of the ongoing production operation of its business. 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 the company's control, the company 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 the company's peers, a majority of whom also exclude stock-based compensation from their Non-GAAP results. Amortization of acquired intangible assets. The company incurs expenses from the amortization of acquired intangible assets over their economic lives. Such charges are significantly impacted by the timing and magnitude of the company's acquisitions and any related impairment charges. Recoveries from a power outage incident. In June 2019, an unexpected power outage incident occurred at the flash-based memory manufacturing facilities operated through the company's joint venture with Kioxia Corporation in Yokkaichi, Japan. The power outage incident resulted in costs associated with the repair of damaged tools and the write-off of damaged inventory and unabsorbed manufacturing overhead costs which are expensed as incurred. During fiscal years 2021 and 2022, the company received recoveries of these losses from other parties. The recoveries are inconsistent in amount and frequency, and the company believes they are not part of the ongoing production operation of its business. Employee termination, asset impairment and other charges. From time-to-time, in order to realign the company's operations with anticipated market demand or to achieve cost synergies from the integration of acquisitions, the company may terminate employees and/or restructure its operations. From time-to-time, the company may also incur charges from the impairment of intangible assets and other long-lived assets. In addition, the company 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 the company believes they are not indicative of the underlying performance of its business. Non-cash economic interest. The company excludes non-cash economic interest expense associated with its convertible notes. These charges do not reflect the company's operating results, and the company believes they are not indicative of the underlying performance of its business. Other adjustments. From time-to-time, the company incurs charges or gains that the company believes are not a part of the ongoing operation of its business. The resulting expense or benefit is inconsistent in amount and frequency. Income tax adjustments. Income tax adjustments include the difference between income taxes based on a forecasted annual Non-GAAP tax rate and a forecasted annual GAAP tax rate as a result of the timing of certain Non-GAAP pre-tax adjustments. The income tax adjustments also include adjustments to estimates related to the current status of the rules and regulations governing the transition to the Tax Cuts and Jobs Act and the re-measurement of certain unrecognized tax benefits primarily related to tax positions taken in prior quarters, including interest. These adjustments are excluded because the company believes that they are not indicative of the underlying performance of its ongoing business. Additionally, free cash flow is defined as cash flows provided by operating activities less purchases of property, plant and equipment, net of proceeds from sales of property, plant and equipment, and the activity related to Flash Ventures, net. The company considers free cash flow generated in any period to be a useful indicator of cash that is available for strategic opportunities including, among others, investing in the company's business, making strategic acquisitions, repaying debt and strengthening the balance sheet.#22་་་ Western Digital. TM Create What's Next