Capital Allocation Framework
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WESTERN DIGITAL CONFIDENTIAL
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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.View entire presentation