Western Digital (WDC) 10-K risk factor changes: FY2021 vs FY2020

Our [removed: business, financial condition and operating results] [added: business] can be affected by a number of risks and uncertainties, [removed: whether currently known or unknown, any one or more of] which [removed: could, directly or indirectly,] [added: could] cause [added: material harm to] our actual [removed: results of operations and financial condition to vary materially from past, or from anticipated future,] [added: operating] results [removed: of operations] and financial condition.

The risks [removed: and uncertainties] discussed below are not the only ones facing our business, but represent risks [removed: and uncertainties] that we believe are material to us.

Additional risks [removed: and uncertainties] not presently known to us or that we currently deem immaterial may also [removed: adversely] [added: negatively] affect our [removed: business, financial condition, results of operations or the market price of our common stock.][added: business.]

The COVID-19 pandemic could [removed: adversely] [added: negatively] affect our [removed: business, results of operations and financial condition.][added: business.]

The COVID-19 pandemic [removed: and efforts to control its spread have] [added: has] impacted and will continue to impact our workforce and operations, and those of our strategic partners, customers, suppliers and logistics providers.

These impacts have included and may continue to include under-absorbed overhead, increased logistics and other costs, decreased demand for our products and manufacturing [removed: challenges, including decreased product output.][added: challenges.]

While our manufacturing facilities and those used by Flash Ventures are all currently operational, [removed: in some cases with exemptions from government restrictions,] this is subject to change based on evolving conditions related to the pandemic.

- Further disruptions to our supply chain, our operations or those of our strategic partners, customers or suppliers caused by employees or others contracting COVID-19, or governmental orders to contain the spread of COVID-19 such as travel restrictions, quarantines, shelter in place orders, trade [removed: controls,] [added: controls] and business [removed: shutdowns;][added: shut-downs;]

- A [removed: deepening of the] global economic downturn or a recession causing a decrease or shift in short- or long-term demand for our products, resulting in industry oversupply and decreases of average selling prices [removed: (“ASPs”), which would adversely impact our profitability;][added: (“ASPs”);]

- [removed: Further deterioration] [added: Deterioration] of worldwide credit markets that may limit our ability or increase our cost to obtain external financing to fund our operations and capital expenditures and result in a higher rate of losses on our accounts receivables due to customer credit defaults;

- Extreme volatility in financial markets which [removed: has and] may [removed: continue to adversely impact our stock price and] [added: harm] our ability to access the financial markets on acceptable terms;

- Increased data security and technology risk as many employees continue to work from home, including possible outages to systems and technologies critical to remote work and increased data privacy risk with cybercriminals attempting to take advantage of the disruption; [added: and]

- Reduced productivity or other disruptions of our operations if essential workers in our factories or those returning to our worksites are exposed to or spread COVID-19 to other [removed: employees; and][added: employees.]

The degree to which the pandemic ultimately impacts our business [removed: and results of operations] will depend on future developments beyond our control which are highly uncertain and cannot be predicted at this time, including the severity and duration of the pandemic, the extent of actions to contain or treat COVID-19, the [removed: effectiveness] [added: timing, distribution, efficacy and public acceptance] of [removed: government stimulus programs,] [added: vaccines around the world,] any possible resurgence of [removed: COVID-19 that may occur after] [added: COVID-19, including] the [removed: current outbreak subsides,] [added: emergence of more contagious or vaccine-resistant variants and] how quickly and to what [added: extent normal economic and operating activity can resume.]

Adverse global or regional conditions could harm our [removed: business, results of operations and financial condition.][added: business.]

As a result, our [removed: business, results of operations and financial condition depend] [added: business depends] significantly on global and regional conditions.

Adverse changes in global or regional economic conditions, including, but not limited to, volatility in the financial markets, tighter credit, slower growth in certain geographic regions, political uncertainty, other macroeconomic factors, [removed: and] changes to social [removed: conditions, policies, rules] [added: conditions] and regulations, could significantly harm demand for our products, increase credit and collectability risks, result in revenue reductions, [added: reduce profitability as a result of underutilization of our assets,] cause us to change our business practices, increase manufacturing and operating costs or result in impairment charges or other expenses.

Our revenue [removed: and future] growth [removed: are] [added: is] significantly dependent on the growth of international markets, and we may face [removed: difficulties] [added: challenges] in [removed: entering or maintaining] international sales markets.

We are subject to risks associated with our global manufacturing operations and global [removed: marketing and] sales efforts, as well as risks associated with our utilization of [removed: and reliance on] contract manufacturers, including:

- obtaining [removed: requisite] governmental [removed: permits] [added: approvals] and [removed: approvals,] compliance with [removed: foreign laws and regulations and changes in] [added: evolving] foreign [removed: laws and] regulations;

- trade restrictions, such as export controls, export bans, [added: import restrictions,] embargoes, sanctions, license and certification requirements (including semiconductor, encryption and other technology), [removed: new or increased] tariffs and [removed: fees and] complex customs regulations; and

As a result of these risks, our [removed: business, results of operations or financial condition] [added: business] could be [removed: adversely affected.][added: harmed.]

We rely substantially on [removed: our business ventures] [added: strategic relationships] with [removed: Kioxia for the development and supply of flash-based memory,] [added: various partners, including Kioxia,] which subjects us to risks and uncertainties that could harm our [removed: business, financial condition and operating results.][added: business.]

We depend on [removed: our ventures with Kioxia to develop] [added: Flash Ventures for the development] and manufacture [removed: our] [added: of] flash-based memory.

[added: Our strategic relationships, including] Flash [removed: Ventures is] [added: Ventures, are] subject to various risks that could harm the value of our investments, our revenue and costs, our future rate of spending, our technology plans and our future growth opportunities.

Substantially all of our flash-based memory is supplied by Flash Ventures, which limits our ability to respond to market demand and supply [removed: changes.][added: changes and makes our financial results particularly susceptible to variations from our forecasts and expectations.]

A failure to accurately forecast [added: supply and] demand could cause us to over-invest or under-invest in technology transitions or the expansion of Flash Ventures’ capacity.

On the other hand, if we under-invest in Flash [removed: Ventures] [added: Ventures,] or otherwise grow or transition Flash Ventures’ capacity [removed: more slowly than we expect or than the rest of the industry,] [added: too slowly,] we may not have enough supply of [added: flash-based memory, or] the right type of [removed: memory or at all] [added: flash-based memory,] to meet demand on a timely and cost effective [removed: basis] [added: basis,] and we may lose opportunities for revenue, gross margin and market share as a result.

[removed: If our supply is limited, we may make strategic decisions] with respect to the allocation of our supply among our products and customers, [removed: and these strategic allocation decisions may] [added: which could] result in less favorable gross [removed: margin] [added: margins] or damage [removed: certain] customer relationships.

We are contractually obligated to pay for 50% of the fixed costs of Flash Ventures regardless of whether we [removed: purchase] [added: order] any [removed: wafers from] [added: flash-based memory, and our orders placed with] Flash [removed: Ventures.][added: Ventures on a three-month rolling basis are binding.]

[removed: Under] [added: For example, under] the Flash Ventures agreements, we [removed: have limited power to] [added: cannot] unilaterally direct most of [removed: the activities that most significantly impact] Flash Ventures’ [removed: performance] [added: activities,] and we have limited ability to source or fabricate [removed: flash-based memory] [added: flash] outside of Flash Ventures.

Lack of alignment with Kioxia with respect to Flash Ventures could [removed: adversely] [added: negatively] impact our ability to stay at the forefront of technological [removed: advancement and our investment in Flash Ventures and otherwise harm our business.][added: advancement.]

Misalignment could arise due to changes in Kioxia’s strategic priorities, management, ownership and/or access to capital, which has changed [removed: significantly recently] [added: in recent years] and could continue to change.

Kioxia’s stakeholders may include, or have included in the past, [removed: flash and HDD] competitors, customers, a private equity [removed: firm and a bank owned by the Government of Japan or] [added: firm, government entities and/or] public [removed: shareholders, if Kioxia publicly lists its shares in the future.][added: shareholders.]

Kioxia’s management changes, ownership and capital structure could lead to delays in decision-making, [removed: disputes,] [added: disputes] or changes in strategic direction that could [removed: adversely] [added: negatively] impact [removed: Flash Ventures and/or adversely affect our business prospects, results of operations] [added: the strategic partnership,] and [removed: financial condition.][added: therefore us.]

Flash Ventures requires significant investments by both Kioxia and us for technology [removed: transitions, including the transition to 3D NAND,] [added: transitions] and capacity [removed: expansions.][added: expansions, and our business could be harmed if our technology roadmap and investment plans are not sufficiently aligned with Kioxia’s.]

To the extent that lease financings [removed: for Flash Ventures] are not accessible on favorable terms or at all, more cash would be required to fund investments.

We participate in a highly competitive industry that is subject to declining [removed: average selling prices (“ASPs”),] [added: ASPs,] volatile demand, rapid technological change and industry consolidation, [added: as well as lengthy product qualifications,] all of which could [removed: adversely affect] [added: negatively impact] our [removed: operating results and financial condition.][added: business.]

Demand for our devices, software and [removed: solutions that we offer to our customers,] [added: solutions,] which we refer to in this Item 1A as our “products”, depends in large part on the demand for systems [removed: (including personal computers and mobile devices)] manufactured by our customers and on storage upgrades to existing systems.

The storage market has experienced volatile product life cycles, which can [removed: adversely affect] [added: harm] our ability to recover the cost of product development, and periods of excess capacity, which can lead to liquidation of excess inventories, significant reductions in ASPs and [removed: adverse] [added: negative] impacts on our revenue and gross margins.

OPERATIONAL RISKS

Possible impacts include work and equipment stoppages and

damage to or closure of our facilities, or those of our suppliers or customers, for an indefinite period of time.

Climate change has in the past, and is expected to continue to increase the incidence and severity of certain natural disasters.

To the extent our products are hacked or the encryption schemes are compromised or breached, this could harm our business by

If these additional expenses are significant, they could harm our business.

BUSINESS AND STRATEGIC RISKS

If our supply is limited, we might make strategic decisions

Together with Kioxia, we fund a portion of the investments required for Flash Ventures through lease financings.

Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following:

- failure by our strategic partners to comply with applicable laws;

- failure by our strategic partners to timely fund capital investments with us or otherwise meet their commitments, including paying amounts owed to us or third parties when due;

- a bankruptcy event involving a strategic partner could result in structural changes to and/or termination of the strategic partnership; and

These factors could result in a substantial decrease in our market share and harm our business.

If we fail to implement new technologies or develop new products desired by our customers quickly and cost-effectively, our business may be harmed.

Sales of many of our products tend to be seasonal and subject to supply-demand cycles.

Failure to successfully execute on strategic initiatives including acquisitions, divestitures or cost saving measures may negatively impact our future results.

We have made and expect to continue to make acquisitions and divestitures, and engage in cost saving measures.

retention.

Historically, nearly one half of our total revenue came from sales to our top 10 customers.

FINANCIAL RISKS

We have a substantial amount of debt and may incur additional debt, including under our revolving credit facility, subject to customary conditions in our credit agreement.

Our inability to service our debt obligations or refinance our debt could harm our business.

As a result, LIBOR may perform differently than in the past and may ultimately cease to be utilized or to exist, either during or after 2021.

We also guarantee a significant amount of lease obligations of Flash Ventures owed to third parties.

If a cancellation event

When such events occur, they have had, and may in the future have, a negative impact on our business.

Further, the ability to enter into foreign exchange contracts with

LEGAL AND COMPLIANCE RISKS

We may also be subject to restrictions on cross-border data transfers and requirements for localized storage of data that could increase our compliance costs and risks and affect the ability of our global operations to coordinate activities and respond to customers.

We may be subject to injunctions, enter into settlements or be subject to judgments that may harm our business.

The exclusive forum provisions in our Bylaws could limit our stockholders' ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees.

Our Bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the Company or its stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Company’s Certificate of Incorporation or Bylaws, or (iv) any action or proceeding asserting a claim governed by the internal affairs doctrine (the “Delaware Exclusive Forum Provision”).

Our Bylaws further provide that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action under the Securities Act of 1933, as amended (the “Federal Forum Provision”).

The Delaware Exclusive Forum Provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Exchange Act or the Securities Act, or any other claim for which the federal courts have exclusive jurisdiction.

In addition, the Federal Forum Provision is intended to apply to claims arising under the Securities Act and would not apply to claims brought pursuant to the Exchange Act.

The exclusive forum provisions in the Company’s Bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder and, accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal courts.

Our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

The exclusive forum provisions in the Company’s Bylaws may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the company or its directors, officers or other employees, which may discourage lawsuits against the Company and its directors, officers and other employees.

In addition, stockholders who do bring a claim in the Court of Chancery of the State of Delaware pursuant to the Delaware Exclusive Forum Provision could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware.

- Management’s ongoing commitment of significant time, attention and resources to respond to the pandemic.

extent normal economic and operating activity can resume, and the severity and duration of the global economic downturn that results from the pandemic.

The COVID-19 pandemic may also have the effect of heightening many of the other risks described in more detail in this “Risk Factors” section, such as those relating to adverse global or regional conditions, our highly competitive industry, supply chain disruption, demand conditions and our ability to forecast demand, cost saving initiatives, our indebtedness and liquidity, and cyber attacks.

We partner with Kioxia on the development of flash-based technology, including future generations of 3D NAND, as well as other non-volatile memory technology in support of Flash Ventures.

Furthermore, purchase orders placed with Flash Ventures and under the foundry arrangements with Kioxia for up to three months are binding and cannot be canceled.

Therefore, once our purchase decisions have been made, our production costs for flash memory are fixed, and we may be unable to reduce costs to match any subsequent declines in pricing or demand, which would harm our gross margin.

Our limited ability to react to fluctuations in flash memory supply and demand makes our financial results particularly susceptible to variations from our forecasts and expectations.

In May 2019, Kioxia’s parent company, Kioxia Holdings Corporation (“KHC”), announced new financing in the amount of 1.2 trillion Japanese yen.

KHC’s financing agreements and/or its high level of debt could limit Kioxia’s ability to timely fund or finance investments in Flash Ventures or our joint development efforts, as well as limit Flash Ventures’ ability to enter into lease financings.

If Kioxia does not or we do not provide sufficient resources, or have adequate access to credit, to timely fund investments in Flash Ventures, our investments could be delayed or reduced.

Delayed or reduced investment in manufacturing capacity or R&D could harm Flash Ventures’ competitiveness and/or our investment in Flash Ventures.

In addition, KHC’s financing arrangements might be secured by Kioxia’s equity interests in Flash Ventures, permitting the lenders to foreclose on those equity interests under certain circumstances.

In May 2019, we entered into definitive agreements with Kioxia regarding a new 3D NAND wafer fabrication facility in Kitakami, Iwate, Japan, known as “K1.” Output from Flash Ventures’ initial production line at K1 began in the third quarter of fiscal year 2020.

As K1 is located at a new manufacturing site, K1 could be particularly susceptible to delays and other challenges in the production ramp and yields, qualification of wafers, shipment of samples to customers and customer approval processes.

Further, although we intend to continue to jointly invest with Kioxia to ramp up manufacturing capacity at K1, there is no certainty as to when, and on what terms, we will do so.

If and for so long as our share of the K1 capacity falls below a specified threshold, we will be responsible for bearing fixed costs associated with K1’s operations at that threshold, which could adversely affect our financial results.

These factors may result in significant shifts in market share among the industry’s major participants, including a substantial decrease in our market share, all of which could adversely impact our operating results and financial condition.

In addition, we compete based on our ability to offer our customers competitive solutions that provide the most current and desired products and service features.

If we fail to implement new technologies successfully, if we are slower than our competitors at implementing new technologies, or if our technology transitions or product development are more costly to complete than anticipated, we may not be able to offer products our customers desire and our costs may not remain competitive, which would harm revenues, our gross margin and operating results.

Where this cannot be done, our business and operations may be adversely affected.

We could incur substantial costs as a result of shifts in technology and standards, such as adopting new standards or investing in different capital equipment or manufacturing processes to remain competitive.

For additional technology transition risks related to Flash Ventures, see the risk factor entitled “*We rely substantially on our business ventures with Kioxia for the development and supply of flash-based memory, which subjects us to risks and uncertainties that could harm our business, financial condition and operating results.*”

Our strategic relationships subject us to risks that could adversely affect our business, financial condition and results of operations.

These strategic relationships are subject to various risks that could adversely affect the value of our investments and our results of operations and financial condition.

These risks include, but are not limited to, the following:

- our interests could diverge from our partners’ interests or we may not agree with co-venturers on ongoing activities, technology transitions or on the amount, timing or nature of further investments in the relationship;

- due to financial constraints, our co-venturers may be unable to meet their commitments to us or may pose credit risks for our transactions with them;

- due to differing business models, financial constraints or long-term business goals, our partners may decide not to join us in funding capital investment by our business ventures, which may result in higher levels of cash expenditures by us or prevent us from proceeding in the investment;

- a bankruptcy event involving a co-venturer could result in the early termination or adverse modification of the business venture or agreements governing the business venture;

- we may experience difficulties or delays in collecting amounts due to us from our co-venturers;

- the terms of our arrangements may turn out to be unfavorable; and

If our strategic relationships are unsuccessful or there are unanticipated changes in, or termination of, our strategic relationships, our business, results of operations and financial condition may be adversely affected.

Any disruption in our supply chain could reduce our revenue and adversely impact our financial results.

A significant event that impacts any of our manufacturing sites, or the sites of our customers or suppliers, could adversely affect our ability to manufacture or sell our products, and our business, financial condition and results of operations could suffer.

Sales of computer systems, mobile devices, storage subsystems, gaming consoles and consumer electronics tend to be seasonal and subject to supply-demand cycles, and therefore we expect to continue to experience seasonality and cyclicality in our business as we respond to variations in supply dynamics and customer demand.

Seasonality and cyclicality also may lead to higher volatility in our stock price.

It is difficult for us to evaluate the degree to which seasonality and cyclicality may affect our stock price or business in future periods because of the rate and unpredictability of product transitions, actions by competitors, new product introductions and macroeconomic conditions.

If we fail to identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, which are a key part of our growth strategy, it may adversely affect our future results.

We seek to be an industry-leading developer, manufacturer and provider of innovative storage solutions, balancing our core hard drive and flash memory business with growing investments in newer areas that we believe will provide us with higher growth opportunities.

Any cost saving initiatives, restructurings or divestitures that we undertake may result in disruptions to our operations and may not deliver the results we expect, which may adversely affect our business.

We are a leading developer, manufacturer and provider of data storage devices and solutions that address the evolving needs of the [removed: information technology (“IT”)] [added: IT] industry and the infrastructure that enables the proliferation of data in virtually every other industry.

Fiscal year 2020, which ended on July 3, 2020, [removed: is] [added: was] comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each.

Fiscal years [added: 2021 and] 2019, which ended on [added: July 2, 2021 and] June 28, 2019, [removed: and 2018, which ended on June 29, 2018, were each] [added: respectively, are] comprised of 52 weeks, with all quarters presented consisting of 13 weeks.

*COVID-19 [removed: Pandemic*][added: Pandemic and Operational Update*]

[removed: In] [added: As a result of] the [removed: intervening months,] [added: ongoing] COVID-19 [removed: has spread globally and led] [added: pandemic,] governments and other authorities around the world, including federal, state and local authorities in the United States, [removed: to impose] [added: have from time-to-time imposed] measures intended to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders.

Although some of these governmental restrictions have since been lifted or scaled back, a [removed: recent surge] [added: resurgence] of COVID-19 infections [removed: has resulted] [added: could result] in the re-imposition of certain restrictions [removed: and may lead to other restrictions being re-implemented] in [removed: response to] efforts to reduce [removed: the] [added: further] spread of COVID-19.

[removed: In light of these events, we] [added: We] have taken actions to protect the health and safety of our employees while continuing to serve our global customers as an essential business.

However, [added: the COVID-19 environment remains dynamic and] we cannot predict the duration of [removed: this crisis] [added: the pandemic] and how demand may change [removed: if] [added: as] it [removed: becomes more protracted.][added: continues to develop.]

See “The COVID-19 pandemic could [removed: adversely] [added: negatively] affect our [removed: business, results of operations and financial condition”] [added: business”] in Part I, Item 1A, *Risk Factors*, of this Annual Report on Form 10-K for more information regarding the risks we face as a result of the COVID-19 pandemic.

*Summary Comparison of [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018*][added: 2019*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: 2021] | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | | | | | | | | | | | [removed: | | | 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] *(in millions, except percentages)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 16,736] [added: 16,922] | | | | | 100.0 | | % | | | | $ | [removed: 16,569] [added: 16,736] | | | | | 100.0 | | % | | | | | | | | | | $ | [removed: 20,647] [added: 16,569] | | | | | 100.0 | | % | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 12,955] [added: 12,401] | | | | | | [removed: 77.4] [added: 73.3] | | | | | | [removed: 12,817] [added: 12,955] | | | | | | 77.4 | | | | | | | | | | | | [removed: 12,942 | | | | | | 62.7 | | | | | | | | | | | | | | | | | | | | | | | |] [added: 12,817] | | | | | | [added: 77.4] | | |

| Gross profit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,781] [added: 4,521] | | | | | | [removed: 22.6] [added: 26.7] | | | | | | [removed: 3,752] [added: 3,781] | | | | | | 22.6 | | | | | | | | | | | | [removed: 7,705 | | | | | | 37.3 | | | | | | | | | | | | | | | | | | | | | | | |] [added: 3,752] | | | | | | [added: 22.6] | | |

| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Research and development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,261 | | | | | | 13.5 | | | | | | 2,182 | | | | | | 13.2 | | | | | | | | | | | | 2,400] [added: 2,243] | | | | | | [removed: 11.6] [added: 13.3] | | | | | | [added: 2,261] | | | | | | [added: 13.5] | | | | | | | | | | | | [added: 2,182] | | | | | | [added: 13.2] | | |

| Selling, general and administrative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,153 | | | | | | 6.9 | | | | | | 1,317 | | | | | | 7.9 | | | | | | | | | | | | 1,473] [added: 1,105] | | | | | | [removed: 7.1] [added: 6.5] | | | | | | [added: 1,153] | | | | | | [added: 6.9] | | | | | | | | | | | | [added: 1,317] | | | | | | [added: 7.9] | | |

| Employee termination, asset impairment, and other charges | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 32] [added: (47)] | | | | | | [removed: 0.2] [added: (0.3)] | | | | | | [removed: 166] [added: 32] | | | | | | [removed: 1.0] [added: 0.2] | | | | | | | | | | | | [removed: 215] [added: 166] | | | | | | 1.0 | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Total operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,446 | | | | | | 20.6 | | | | | | 3,665 | | | | | | 22.1 | | | | | | | | | | | | 4,088] [added: 3,301] | | | | | | [removed: 19.8] [added: 19.5] | | | | | | [added: 3,446] | | | | | | [added: 20.6] | | | | | | | | | | | | [added: 3,665] | | | | | | [added: 22.1] | | |

| Operating income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 335 | | | | | | 2.0 | | | | | | 87 | | | | | | 0.5 | | | | | | | | | | | | 3,617] [added: 1,220] | | | | | | [removed: 17.5] [added: 7.2] | | | | | | [added: 335] | | | | | | [added: 2.0] | | | | | | | | | | | | [added: 87] | | | | | | [added: 0.5] | | |

| Interest and other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 28] [added: 7] | | | | | | [removed: 0.2] [added: —] | | | | | | [removed: 57] [added: 28] | | | | | | [removed: 0.3] [added: 0.2] | | | | | | | | | | | | [removed: 60] [added: 57] | | | | | | 0.3 | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (413) | | | | | | (2.5) | | | | | | (469) | | | | | | (2.8) | | | | | | | | | | | | (676)] [added: (326)] | | | | | | [removed: (3.3)] [added: (1.9)] | | | | | | [added: (413)] | | | | | | [added: (2.5)] | | | | | | | | | | | | [added: (469)] | | | | | | [added: (2.8)] | | |

| Other [removed: income (expense),] [added: income,] net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 4 | | | | | | — | | | | | | 38] [added: 26] | | | | | | 0.2 | | | | | | [removed: | | | | | | (916) | | | | | | (4.4) | | | | | |] [added: 4] | | | | | | [added: —] | | | | | | | | | | | | [added: 38] | | | | | | [added: 0.2] | | |

| Total interest and other expense, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (381)] [added: (293)] | | | | | | [removed: (2.3)] [added: (1.7)] | | | | | | [removed: (374)] [added: (381)] | | | | | | (2.3) | | | | | | | | | | | | [removed: (1,532) | | | | | | (7.4) | | | | | | | | | | | | | | | | | | | | | | | |] [added: (374)] | | | | | | [added: (2.3)] | | |

| Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (46) | | | | | | (0.3) | | | | | | (287) | | | | | | (1.7) | | | | | | | | | | | | 2,085] [added: 927] | | | | | | [removed: 10.1] [added: 5.5] | | | | | | [added: (46)] | | | | | | [added: (0.3)] | | | | | | | | | | | | [added: (287)] | | | | | | [added: (1.7)] | | |

| Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 204 | | | | | | 1.2 | | | | | | 467 | | | | | | 2.8 | | | | | | | | | | | | 1,410] [added: 106] | | | | | | [removed: 6.8] [added: 0.6] | | | | | | [added: 204] | | | | | | [added: 1.2] | | | | | | | | | | | | [added: 467] | | | | | | [added: 2.8] | | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: (250)] [added: 821] | | | | | [removed: (1.5)] [added: 4.9] | | % | | | | $ | [removed: (754)] [added: (250)] | | | | | [removed: (4.6)] [added: (1.5)] | | % | | | | | | | | | | $ | [removed: 675] [added: (754)] | | | | | [removed: 3.3] [added: (4.6)] | | % | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

The following table sets forth, for the periods presented, summary information regarding our [removed: revenue(1):][added: revenue:]

| | | | | | | | | | [removed: | | | | | |] Year Ended | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | |]

| | | | | | | | | | | | | | | | [removed: 2020 | | | | | | 2019 | | | | | | 2018] [added: 2021] | | | | | | [added: 2020] | | | | | | [added: 2019] | | |

| | | | | | | | | | | | | | | | *(in millions)* | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Revenue by Product | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Flash-based | | | | | | | | | | | | | | | [removed: 7,769 | | | | | | 7,823 | | | | | | 9,949] [added: 8,706] | | | | | | [added: 7,769] | | | | | | [added: 7,823] | | |

| Total Revenue | | | | | | | | | | | | | | | $ | [removed: 16,736] [added: 16,922] | | | | | $ | [removed: 16,569] [added: 16,736] | | | | | $ | [removed: 20,647 | | | | | | | | | | | |] [added: 16,569] | |

| Revenue by End Market | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Client Devices | | | | | | | | | | | | | | | $ | [removed: 7,160] [added: 8,255] | | | | | $ | [removed: 8,095] [added: 7,160] | | | | | $ | [removed: 10,108 | | | | | | | | | | | |] [added: 8,095] | |

| Data Center Devices & Solutions | | | | | | | | | | | | | | | [removed: 6,228 | | | | | | 5,038 | | | | | | 6,075] [added: 4,950] | | | | | | [added: 6,228] | | | | | | [added: 5,038] | | |

| Client Solutions | | | | | | | | | | | | | | | [removed: 3,348 | | | | | | 3,436 | | | | | | 4,464] [added: 3,717] | | | | | | [added: 3,348] | | | | | | [added: 3,436] | | |

*Business Structure*

Late in the first quarter of fiscal 2021, we announced a decision to reorganize our business by forming two separate product business units: flash-based products and hard disk drives (“HDD”).

The new structure is intended to provide each business unit with focus and responsibility for identifying current and future customer requirements while driving the strategy, roadmap, pricing and overall profitability for their respective product areas.

In the second fiscal quarter, to align with the new operating model and business structure, we began making management organizational changes and are implementing new reporting modules and processes to provide discrete information to manage the business.

We are evaluating the impact of these changes on our discussion and analysis of our financial condition and results of operations and expect to modify our disclosures to align with this structure when the implementations and assessments are completed, which is expected to be in the first quarter of fiscal 2022.

We have implemented and maintained more thorough sanitation practices as outlined by health organizations and supported vaccination efforts.

As we begin to phase in a return to site for more employees, we are monitoring and adopting practices recommended by health organizations to ensure the continued safety of our employees and business partners.

In addition, the responses to COVID-19 taken by others in the supply chain have increased the costs of their services which have in turn impacted our operations.

As a result, we have incurred charges of approximately $127 million primarily related to higher logistics during the year ended July 2, 2021, which were recorded in cost of revenue.

Generally, our revenues have remained solid during the pandemic, supported by continued work-from-home, distance learning, and at-home entertainment demand.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| HDD | | | | | | | | | | | | | | | $ | 8,216 | | | | | $ | 8,967 | | | | | $ | 8,746 | |

| Total Revenue | | | | | | | | | | | | | | | $ | 16,922 | | | | | $ | 16,736 | | | | | $ | 16,569 | |

| Total Revenue | | | | | | | | | | | | | | | $ | 16,922 | | | | | $ | 16,736 | | | | | $ | 16,569 | |

Net revenue increased 1% in 2021 compared to 2020, which reflects approximately 13 percentage points increase in revenue related to higher exabyte volume of flash sold, largely offset by lower average selling price per gigabyte.

Client Devices revenue increased 15% year over year, reflecting a 22% increase from a higher volume of flash products sold.

This increase in flash volume was driven by continued strength in demand for notebook and Chromebooks, gaming, smart home devices, automotive and industrial applications.

Data Center Devices and Solutions revenue decreased 20% year over year.

Lower exabytes of storage sold for HDD and flash each contributed approximately 7 percentage points to the revenue decline, while lower average selling price per gigabyte, primarily in HDD products, contributed another 6 percentage points to the decline.

Year-over-year volume was negatively impacted by cloud digestion and China shipment restrictions, and delays in product qualifications with certain customers earlier in the year.

The impacts of cloud digestion have abated and we have now completed qualifications with all our cloud titan customers.

In flash, we are beginning to see growth with our second generation, NVMe enterprise SSD at several cloud titans and are ramping production more broadly.

In HDD, we are experiencing a resurgence of demand driven by the successful ramp of our 18-terabyte energy-assisted hard drive, growing cloud demand, a recovery in enterprise spending, and to a lesser extent, cryptocurrency, driven by Chia.

We believe the strong demand from our cloud customers and beginning of a recovery in the enterprise demand continues to positively impact results.

Client Solutions remains a high performing end market, reflecting our brand recognition, broad product portfolio and extensive distribution channels to markets.

Gross profit increased $740 million, or 19.6%, in 2021 compared to 2020, which reflected a $279 million decrease in charges for amortization expense on acquired intangible assets, $143 million improvement related to power outage charges of $68 million incurred in 2020 combined with a $75 million recovery in the current year as well as incremental profit from the increase in volume.

As a percent of revenue, gross margin increased by 4.1 percentage points over the prior year of which 2.5 percentage points reflected the impact of the change in power outage charges and lower charges for amortization expense.

In addition, as we ramped production on new products, cost reduction also contributed to the increase in gross margin.

Research and development (“R&D”) expense decreased $18 million in 2021 compared to 2020.

The decrease was driven by lower facility costs of approximately $50 million due to restructuring and cost initiatives and approximately $20 million of lower travel related expenses due to COVID-19 restrictions, partially offset by higher employee compensation cost for additional headcount as we invested in research and development, and higher variable compensation cost due to improved earnings.

Selling, general and administrative (“SG&A”) expense decreased $48 million in 2021 compared to 2020.

The decline was primarily driven by a $50 million reduction in expenses related to travel, marketing and outside services as a result of COVID-19 restrictions.

The gains recognized in Employee termination, asset impairment and other charges compared to the losses in the prior year primarily reflect gains on the disposal of assets associated with our business realignment activities.

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The primary drivers of the difference between the effective tax rate for 2021 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the deduction for foreign derived intangible income, credits and tax holidays in Malaysia, Philippines and Thailand that will expire at various dates during fiscal years 2021 through 2031.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | |

Our broad portfolio of technology and products address the following key end markets: Client Devices; Data Center Devices and Solutions; and Client Solutions.

We also generate license and royalty revenue from our extensive intellectual property (“IP”), which is included in each of these three end market categories.

In March 2020, the World Health Organization declared COVID-19 a pandemic, and the United States declared a national emergency.

These measures may remain in place for a significant amount of time.

We have implemented more thorough sanitation practices as outlined by health organizations and instituted social distancing policies at our locations around the world, including working from home, limiting the number of employees attending meetings, reducing the number of people in our sites at any one time, and suspending employee travel.

These actions have resulted in some reductions of production levels, particularly impacting our manufacture of hard drives, as we adapt to a more limited number of employees in facilities and, as a result, we have incurred charges of approximately $110 million in costs related to under-absorbed overhead and higher logistics and other costs during the year ended July 3, 2020.

While we have experienced some reductions of sales in certain areas such as retail in our Client Solutions end market where brick and mortar operations have been impacted, we have seen strong demand for capacity enterprise products in our Data Center Devices and Solutions end market as the current environment has accelerated the movement to the cloud.

As such, our net revenue for the year ended July 3, 2020 was not significantly impacted by COVID-19.

We currently expect some softening in Cloud demand as these customers absorb recent capacity expansions, but expect some improvement in retail demand as countries begin to ease their lockdown restrictions and as brick and mortar locations shift more of their operations online.

*Flash Ventures*

Through our three business ventures with Kioxia Corporation (“Kioxia”), referred to as “Flash Ventures”, we and Kioxia operate flash-based memory wafer manufacturing facilities in Japan.

We are obligated to pay for variable costs incurred in producing our share of Flash Ventures’ flash-based memory wafer supply, based on our three-month forecast, which generally equals 50% of Flash Ventures’ output.

In addition, we are obligated to pay for half of Flash Ventures’ fixed costs regardless of the output we choose to purchase.

We are also obligated to fund 49.9% to 50% of each Flash Ventures entity’s capital investments to the extent that Flash Ventures entity’s operating cash flow is insufficient to fund these investments.

Since its inception, Flash Ventures’ primary manufacturing site has been located in Yokkaichi, Japan, which currently includes five wafer fabrication facilities.

These facilities historically operated near 100% of their manufacturing capacity.

As a result of supply/demand imbalance for flash-based products arising in the prior year, we temporarily reduced our utilization of our share of Flash Ventures’ manufacturing capacity to an abnormally low level for several quarters to more closely align our flash-based wafer supply with the projected demand.

As a result of this temporary reduction to abnormally low production levels, we incurred $264 million associated with the reduction in utilization, which was recorded as a charge to cost of revenue in the year ended June 28, 2019.

In addition, levels at the Yokkaichi site were temporarily reduced as a result of an unexpected power outage incident that occurred in the Yokkaichi region on June 15, 2019.

The power outage incident impacted the facilities and process tools and resulted in the damage of flash wafers in production.

The incident resulted in a reduction of our flash wafer availability by approximately 4 exabytes, the majority of which was contained in the first quarter of fiscal year 2020.

As a result of this power outage incident, we incurred aggregate charges of $68 million and $145 million recorded in Cost of revenue in the years ended July 3, 2020 and June 28, 2019, respectively, which primarily consisted of the write-off of damaged inventory and unabsorbed manufacturing overhead costs.

We continue to pursue recovery of our losses associated with this event; however, the total amount of recovery cannot be estimated at this time.

In May 2019, we entered into additional agreements with Kioxia to extend Flash Ventures to a new wafer fabrication facility, known as “K1,” located in Kitakami, Japan.

The primary purpose of K1 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer technology nodes.

Output from the initial production line at K1 began in the third quarter of fiscal year 2020, although meaningful output from K1 is not expected to begin until the end of calendar 2020.

We have paid for most of our share of initial K1 equipment investments and relocation costs.

Other period expenses associated with the initial production ramp at K1 will begin trailing off as output increases toward the end of the calendar year.

We also agreed to prepay an aggregate of approximately $360 million over a 3-year period beginning in the first half of fiscal year 2020 toward K1 building depreciation, to be credited against future wafer charges.

As of July 3, 2020, remaining committed prepayments totaled $206 million.

*Exit of Storage Systems Business*

In September 2019, we announced our intention to exit Storage Systems, which consisted of IntelliFlash and ActiveScale.

These actions allow us to redirect investments to other higher value priorities.

In November 2019, we completed the sale of IntelliFlash for a price of $28 million, to be collected over the next three years.

The sale of our IntelliFlash business included an immaterial amount of inventory, other tangible and intangible assets, and goodwill and resulted in a gain of approximately $17 million recorded in Employee termination, asset impairment, and other charges in the Consolidated Statements of Operations for the year ended July 3, 2020.

Additionally, in March 2020, we completed the sale of ActiveScale.

The net assets sold and the proceeds from the sale of ActiveScale were not material.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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For additional information, see Part II, Item 8, Note [removed: 4,] [added: 5,] *Fair Value Measurements and Investments,* and Note [removed: 5,] [added: 6,] *Derivative Instruments and Hedging Activities*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Therefore, we have performed sensitivity analyses for [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.

The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at July [removed: 3, 2020] [added: 2, 2021] and [removed: June 28, 2019.][added: July 3, 2020.]

The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of [removed: $135] [added: $183] million and [removed: $82] [added: $135] million at July [removed: 3, 2020] [added: 2, 2021] and [removed: June 28, 2019,] [added: July 3, 2020,] respectively.

During [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.

Borrowings under our revolving credit facility and our term loan A-1 due 2023 bear interest at a rate per annum, at our option, of either an adjusted [removed: London Interbank Offered Rate (“LIBOR”)] [added: LIBOR] (subject to a 0.0% floor) plus an applicable margin varying from 1.125% to 2.000% or a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on our corporate credit ratings.

As of July [removed: 3, 2020,] [added: 2, 2021,] the applicable margin based on our current credit ratings was 1.5%.

After giving effect to the $2.00 billion of interest rate swaps, we effectively had [removed: $4.28] [added: $3.43] billion of Long-term debt subject to variations in interest rates and a one percent increase in the variable rate of interest would increase annual interest expense by [removed: $43] [added: $34] million.

For additional information regarding our variable interest rate debt, see Part II, Item 8, Note [removed: 6,] [added: 7,] *Debt*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

As of July 2, 2021, we had $5.43 billion of variable rate debt, representing 61% of the par value of our debt.

At July 3, 2020, 65% of the par value of our debt was at variable rates.

As of July 3, 2020, we had $6.28 billion of variable rate debt.

[removed: Founded in 1970 in Santa Ana, California and now headquartered in San Jose, California, Western Digital has] [added: We have] one of the technology industry’s most valuable patent portfolios with approximately [removed: 13,500] [added: 13,700] active patents worldwide.

We have a rich heritage of innovation and operational excellence, a wide range of [removed: IP] [added: intellectual property (“IP”)] assets and broad research and development (“R&D”) capabilities.

The unabated growth [added: in amount, value,] and [removed: value] [added: use] of data continues, creating a global need for a [removed: larger] [added: larger, faster] and more capable storage infrastructure.

We continue to transform ourselves to address [removed: this] [added: the] growth [added: in data] by providing what we believe to be the broadest range of storage technologies in the industry with a comprehensive product portfolio and global reach.

We enable [removed: cloud service providers] [added: cloud, Internet, and social media infrastructure players] to build more powerful, cost effective and efficient data centers.

We have also built strong consumer brands [removed: by providing effective] [added: with] tools to manage fast-accumulating libraries of personal content.

We operate in the data storage [removed: and data management] industry.

The growth in computing complexity, cloud computing applications, connected mobile devices and Internet connected [removed: products] [added: products, and edge devices] is driving unabated growth in the volume of digital content to be [removed: stored.][added: stored and used.]

The storage industry is increasingly utilizing tiered architectures with HDDs, [removed: SSDs] [added: solid state drives (“SSDs”)] and other non-volatile memory-based storage to address an expanding set of uses and applications.

We continuously monitor the [removed: advantages, disadvantages and advances of the] full array of storage technologies, including reviewing these technologies with our customers, to ensure we are appropriately resourced to meet our customers’ storage needs.

Our overall strategy is to leverage our [removed: technology, innovation] [added: innovation, technology] and execution capabilities to be an industry-leading and broad-based developer, manufacturer and provider of storage devices and solutions that support the infrastructure that has enabled the unabated proliferation of data.

We believe we are the only company in the world with large-scale capabilities to develop and manufacture a portfolio of integrated data storage solutions that are based on both [removed: rotating magnetic] [added: HDD] and flash memory technologies.

- [removed: *Technology] [added: *Innovation and Cost] Leadership:* We continue to innovate and develop advanced technologies across platforms for both HDD and flash to deliver timely new products and solutions to meet growing demands for scale, performance and cost efficiency in the market.

- [added: a broad product portfolio that] differentiates us as [removed: the] [added: a] leading developer and manufacturer of integrated products and solutions based on both HDD and flash, making us a more strategic supply partner to our large-scale customers who have storage needs across the data infrastructure ecosystem;

- [removed: enables scaling for efficiency] [added: efficient] and [removed: flexibility,] [added: flexible manufacturing capabilities,] allowing us to leverage our HDD and flash R&D and capital expenditures to deliver [added: innovative and cost-effective] storage solutions to multiple markets; [added: and]

[removed: Data Storage] [added: Our Data] Solutions

We offer a broad line of data [removed: storage] solutions to [added: various end markets to] meet the evolving storage needs of [removed: end markets which include the following:][added: our customers.]

[removed: Client Devices] [added: *Client Devices.* We provide numerous data solutions that we incorporate into our client’s devices, which] consist of [removed: HDDs] [added: HDD] and [removed: SSDs for computing devices, such as] [added: SSD] desktop and notebook PCs, smart video systems, gaming consoles and set top [removed: boxes;] [added: boxes, as well as] flash-based embedded storage products for mobile phones, tablets, notebook PCs and other portable and wearable devices, [removed: automotive,] [added: automotive applications,] Internet of [removed: Things (“IoT”),] [added: Things,] industrial and connected home [removed: applications; and flash-based memory wafers and components.][added: applications.]

[removed: Data] [added: *Data] Center Devices [removed: and Solutions consist] [added: & Solutions.* We provide an array] of high-capacity enterprise HDDs and high-performance enterprise SSDs, and platforms.

Our high-performance enterprise class SSDs include high-performance flash-based SSDs and software solutions [removed: which] [added: that] are optimized for performance applications providing a range of capacity and performance levels primarily for use in enterprise [removed: servers,] [added: servers and] supporting high volume on-line transactions, data analysis and other enterprise applications.

[removed: Client Solutions consist] [added: *Client Solutions.* We provide consumers with a portfolio] of HDDs and SSDs embedded into external storage products and removable flash-based products, which include cards, universal serial bus (“USB”) flash drives and wireless [removed: drives.][added: drives, through our retail and channel routes to market.]

Our removable cards are designed primarily for use in consumer devices, such as mobile phones, tablets, imaging systems, [removed: still cameras, action video] cameras and smart video systems.

[added: *Hard Disk Drives.*] HDDs provide non-volatile data storage [removed: based on the] [added: by] recording [removed: of] magnetic information on a rotating disk.

Our improvements in HDD capacity, which lower product costs over time, have been enabled largely through advancements in [added: magnetic] recording head and [removed: magnetic] media [removed: technology.][added: technologies.]

We develop and manufacture substantially all of the recording heads and magnetic media used in our [removed: hard drive] [added: HDD] products.

[removed: Solid state] [added: *Flash Technologies.* Flash based] storage products provide non-volatile data storage based on flash technology.

We develop and manufacture solid state storage products [removed: in different form factors] for a variety of [removed: different markets,] [added: applications] including enterprise or cloud storage, client storage, automotive, mobile devices and removable memory devices.

Over time, we have successfully developed and commercialized [removed: an] [added: successive generations of 3-dimensional flash technology with] increased [removed: number] [added: numbers] of storage bits per cell in an increasingly smaller form factor, further driving cost reductions.

We have approximately [removed: 13,500] [added: 13,700] active patents worldwide and have many patent applications in process.

Substantially all of our flash-based supply requirements for our flash-based products is obtained from our [removed: business] ventures with Kioxia, which provide us with leading-edge, high-quality and low-cost flash memory wafers.

While substantially all of our flash memory supply utilized for our products is purchased from these ventures, from time-to-time, we also purchase flash memory from other flash [removed: manufacturers, which we refer to as non-captive.][added: manufacturers.]

While we do not unilaterally control the operations of our ventures with Kioxia, we believe that our business venture relationship with Kioxia helps us [removed: to] reduce [removed: the costs of producing our products,] [added: product costs,] increases our ability to control the quality of our products and speeds delivery of our products to our customers.

Our [removed: vertically integrated manufacturing operations for our flash-based products are concentrated in three locations, with our] business ventures with Kioxia [added: are] located primarily in Yokkaichi, Japan, and our in-house assembly and test operations located in Shanghai, China and Penang, Malaysia.

We also leverage [removed: the efficiencies of] contract manufacturers when strategically advantageous.

HDD consists primarily of recording heads, magnetic [removed: media] [added: media, controllers] and [added: firmware, and] a printed circuit board assembly.

As a result, we are more dependent upon our own development and execution efforts [added: for these components] and less reliant on recording head and magnetic media technologies developed by other manufacturers.

Our flash-based products consist of flash memory, controllers and [removed: firmwares.][added: firmware and other components.]

We are obligated to [added: take our share of the output from these ventures or] pay for variable costs incurred in producing our share of Flash Ventures’ flash-based memory wafer supply, based on our three-month forecast, which generally equals 50% of Flash Ventures’ output.

We are also obligated to fund 49.9% to 50% of each Flash Ventures entity’s capital investments to the extent that [added: the] Flash Ventures entity’s operating cash flow is insufficient to fund these investments.

[removed: In May 2019, we entered into additional agreements to extend Flash Ventures to a new wafer fabrication facility, known as “K1.”] Located in Kitakami, Japan, K1 is operated by Kioxia Iwate Corporation, a wholly owned subsidiary of Kioxia.

Founded in 1970 in Santa Ana, California, Western Digital is now a Standard & Poor’s 500 (“S&P 500”) company headquartered in San Jose, California.

We are a customer-focused organization that has developed deep relationships with industry leaders to continue to deliver innovative solutions to help users capture, store and transform data across a boundless range of applications.

Wherever data needs to be stored and accessed - from consumer devices such as cameras, drones and virtual reality headsets, to the most complex data centers - Western Digital is there.

We help original equipment manufacturers (“OEM”) address storage opportunities and solutions to capture and transform data in myriad devices and edge technologies.

To increase focus, drive innovation and improve execution, we have recently structured our operations with dedicated leadership of our two broad categories of technology: hard disk drives (“HDD”), which are based on rotating magnetic technology, and flash-based memory (“flash”), which is a semiconductor technology.

The ability to access, store and share data from anywhere on any device is increasingly important to our customers.

From the intelligent edge to the cloud, data storage is a fundamental component underpinning the global technology architecture.

Our strengths in innovation and cost leadership, expansive product portfolio and broad routes to market provide a foundation upon which we are solidifying our position as an essential building block of the digital economy.

There’s tremendous market opportunity flowing from the rapid global adoption of the technology architecture built with cloud infrastructure tied to intelligent endpoints all connected by high performance networks.

The value and urgency of data storage at every point across this architecture has never been more clear.

We believe our expertise and innovation across both HDD and flash technologies enable us to bring powerful solutions to a broader range of applications.

- deep relationships with industry leaders across the data ecosystems that give us the broadest routes to market.

We have led the industry in innovation to drive increased areal density and high performance attributes.

The recording heads act as the “to brain” of the HDD and require semiconductor production equipment and technology to produce them.

We began shipping our 5th generation 112-layer BiCS5 products in 2020 and continue to pursue development of increased-capacity, lower-cost devices.

Our vertically integrated, in-house assembly and test operations for our HDD products are concentrated in Prachinburi and Bang Pa-In, Thailand, Penang, Johor Bahru, and Sarawak, Malaysia, Laguna, Philippines, Shenzhen, China, San Jose and Fremont, CA, USA.

We also entered into additional agreements to extend Flash Ventures to a wafer fabrication facility known as “K1”.

In October 2020, Kioxia announced the start of construction of the shell for a new fabrication facility in Yokkaichi, Japan, referred to as “Y7”.

We expect to continue Flash Ventures investments into Y7 in due course, following the completion of agreements with Kioxia governing the construction and operation of the new facility and according to prevailing market trends.

We believe the use of our in-house manufacturing, assembly and test facilities provides the controls necessary to provide the demanding capabilities, performance and reliability our customers require.

This category extends beyond traditional IT manufacturers and includes manufacturers that incorporate data and storage into their own products across a spectrum of applications, including gaming and personal devices, automotive, industrial and connected home applications.

Human Capital Management

Our approximately 65,600 employees worldwide are our most valuable resource.

We believe we can achieve the best business outcomes by empowering our diverse and talented employees to make an impact together.

We are committed to an inclusive environment where every individual can thrive and contribute to our technology leadership across our broad product portfolio and operational excellence to deliver value for our customers.

The Compensation and Talent Committee of our Board of Directors is responsible for providing Board-level oversight and reviews our human capital management programs and initiatives, focusing on our culture, talent development, retention and equity, inclusion and diversity.

Our global workforce is based in the following geographic regions:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Region | | | | | | Primary Functions | | | | | | Approximate # of Employees | | |

| Asia Pacific | | | | | | Manufacturing, engineering | | | | | | 54,200 | | |

| The Americas | | | | | | Engineering, manufacturing, R&D, shared services, sales and marketing | | | | | | 8,000 | | |

| Europe, the Middle East, Africa, Israel and India | | | | | | Sales, marketing, R&D and engineering | | | | | | 3,400 | | |

*Equity, Inclusion and Diversity.* Our commitment to equity, inclusion and diversity starts at the top, where half of the members of our highly skilled and diverse Board of Directors are women.

In fiscal year 2021, women represented 25.7% of our management positions and 22.2% of our technical staff.

Additionally, members of racially or ethnically diverse groups, such as Asian, Black/African American or Hispanic/Latinx, represented 57.6% of our U.S. management positions.

For additional detail about our workforce in fiscal 2021, including data about employee hiring, turnover, and demographics, we encourage you to review our upcoming 2021 Sustainability Report.

Our 2020 Sustainability Report and 2021 ESG Data Download are currently available on our corporate website.

Nothing on our website, including our Sustainability Reports, ESG Data Downloads or sections thereof, shall be deemed incorporated by reference into this Annual Report on Form 10-K.

We are striving to increase representation of women and members of underrepresented communities in our global workforce and particularly in leadership and technical roles.

Our broad portfolio of technology and products address the following key end markets: Client Devices; Data Center Devices and Solutions; and Client Solutions.

We also generate license and royalty revenue from our extensive intellectual property (“IP”), which is included in each of these three end market categories.

Since 2009, we have been a Standard & Poor’s 500 (“S&P 500”) company.

Our devices and solutions are made using either rotating magnetic technology, hard disk drives (“HDD”), or semiconductor technology, referred to as flash-based memory (“flash”).

We have deep relationships with a large range of original equipment manufacturers (“OEM”) and data center customers currently addressing storage opportunities, such as storage subsystem suppliers, major server OEMs, Internet and social media infrastructure players, and personal computer (“PC”) and Mac™ OEMs.

Western Digital data-centric solutions are comprised of the Western Digital®, G-Technology™, SanDisk® and WD® brands.

Our products are sold through distribution, retail and direct channels worldwide.

We are a vertically integrated company with deep capabilities to transform disk drive and flash-based components into products and solutions.

We operate a series of joint ventures with Kioxia Corporation (“Kioxia,” formerly known as Toshiba Memory Corporation) that provide us with industry leading flash-based memory wafers that we use in our products (see “Ventures with Kioxia” section below).

We are well positioned to capitalize on the ongoing expansion in digital content generation and management.

This fundamental trend is linked directly to commercial enterprises’ and consumers’ need for data storage and extraction of value from the data.

The ways in which people and organizations are creating and using data are changing and the amount of data considered useful to store is expanding.

More digital content is being stored and managed in a cloud environment on both HDDs and flash-based solid state drives (“SSD”).

With a focus on innovation and value creation, our goal is to grow through strong execution and targeted investments in data center infrastructure, mobility and the cloud.

Our devices and solutions provide a broad range of reliability, performance, storage capacity and data retention capabilities to our customers.

The ability to capture and create value through the use of data analytics is increasingly important to our customers.

In a connected global marketplace, across the data infrastructure, there has been a proliferation in the methods by and the rates at which content is generated, accessed, transformed, consumed and stored by end users.

When combined with fast global networks, these trends create tremendous need for cost effective, high-performance and/or high-capacity storage solutions in edge and end-point use cases such as mobile, computing and consumer electronic devices, as well as in a wide range of storage systems, servers and data centers.

Storage solutions that hold large amounts of data are key enablers of the trends seen in the evolution of a data driven economy, underpinned by the increase of digital content creation, consumption and monetization.

We are a market and customer driven company, focused on growth, technology, innovation and value creation for our customers, employees and shareholders.

We develop deep and collaborative relationships with our customers with a goal of enabling their continued success, an approach that has made us a trusted business partner in our served markets.

As our portfolio of storage solutions expands further, we believe our customer engagement approach is one of the key factors that will help us continue to achieve strong financial performance over the long term.

We continue to evolve our customer engagement and go-to-market model to address changing customer and market needs.

We are well positioned to expand our value-creation model within an evolving and growing storage ecosystem with our diversified product platform and unique competitive advantages.

- results in continued diversification of our HDD and flash storage solutions portfolio and entry into additional growing adjacent markets; and

- allows us to achieve strong financial performance, including healthy cash generation, thereby enabling organic and inorganic business investments and facilitating our ongoing deleveraging efforts.

*Client Devices*

*Data Center Devices and Solutions*

*Client Solutions*

*Rotating Magnetic Storage*

We have successfully developed and commercialized HDDs that operate in an enclosed helium environment, instead of air, delivering industry leading HDD capacity and performance attributes.

To support our ongoing efforts of driving innovation and continued areal density leadership, we are actively investing in both microwave-assisted magnetic recording (“MAMR”) and heat-assisted magnetic recording (“HAMR”) technology.

As part of our energy-assisted recording technology roadmap, in 2019 we introduced our 16-, 18-, and 20-terabyte drives that are using energy-assisted perpendicular magnetic recording (“ePMR”) technology.

*Solid State Storage*

Our solid state storage products utilize our captive flash-based technology which we develop and manufacture through our business ventures with Kioxia.

Following our introduction and commercialization in 2018 of products based on 4-bits-per-cell architectures (“QLC technology”) and on 3-dimensional flash technology (“3D NAND”), which we refer to as BiCS4, we started shipping products based on QLC and our 4th generation 96-layer BiCS4 technologies in 2019.

Our BiCS4 QLC technology delivers an industry-leading storage capacity of 1.33 terabits on a single chip.

We have also begun initial shipments of our 5th generation 112-layer BiCS5 products.

In addition, we implemented our advanced UFS and e.MMC interface in a new portfolio of advanced embedded flash drives to empower smartphone users to unlock the full potential of today’s data-driven applications and experiences.

We also provide a range of embedded storage solutions for customers developing high-end, highly demanding, and data-intensive automotive applications.

For a description of our legal proceedings, see Part II, Item 8, Note [removed: 16,] [added: 17,] *Legal Proceedings*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form [removed: 10-K, which is incorporated by reference in response to this item.][added: 10-K.]

For the fiscal year ended July [removed: 3, 2020][added: 2, 2021]

[removed: ][added: ]

| | | | Delaware | | | | | | | | | | | | [removed: | | | | | |] 33-0956711 | | | | | |

| | | | *(State or other jurisdiction of incorporation or organization)* | | | | | | | | | | | | [removed: | | | | | |] *(I.R.S. Employer Identification No.)* | | | | | |

| | | | 5601 Great Oaks Parkway | | | San Jose, | | | California | | | | | | 95119 | | | | | | [removed: | | | | | |]

| | | | *(Address of principal executive offices)* | | | | | | | | | | | | [removed: | | | | | |] *(Zip Code)* | | | | | |

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on [removed: January 3,] [added: December 31,] 2020, the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $15.7] [added: $13.5] billion, based on the closing sale price as reported on the Nasdaq Global Select Market.

There were [removed: 302,525,787] [added: 308,748,049] shares of common stock, par value $0.01 per share, outstanding as of the close of business on August [removed: 19, 2020.][added: 18, 2021.]

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the [removed: 2020] [added: 2021] fiscal year.

| | | | | | | PAGE NO. | | | [removed: | | | | | |]

| PART I | | | | | | | | | [removed: | | | | | |]

| Item 1. | | | Business | | | [removed: [5](#if9d16c209bad4b4282f4e8568b569b9d_19) | | | | | |] [added: [5](#i57fcb5c1c22443c7853b70e0d31a4d74_19)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [13](#if9d16c209bad4b4282f4e8568b569b9d_22) | | | | | |] [added: [13](#i57fcb5c1c22443c7853b70e0d31a4d74_22)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [30](#if9d16c209bad4b4282f4e8568b569b9d_25) | | | | | |] [added: [27](#i57fcb5c1c22443c7853b70e0d31a4d74_25)] | | |

| Item 2. | | | Properties | | | [removed: [31](#if9d16c209bad4b4282f4e8568b569b9d_28) | | | | | |] [added: [28](#i57fcb5c1c22443c7853b70e0d31a4d74_28)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [32](#if9d16c209bad4b4282f4e8568b569b9d_34) | | | | | |] [added: [29](#i57fcb5c1c22443c7853b70e0d31a4d74_34)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [32](#if9d16c209bad4b4282f4e8568b569b9d_34) | | | | | |] [added: [29](#i57fcb5c1c22443c7853b70e0d31a4d74_34)] | | |

| PART II | | | | | | | | | [removed: | | | | | |]

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [33](#if9d16c209bad4b4282f4e8568b569b9d_43) | | | | | |] [added: [30](#i57fcb5c1c22443c7853b70e0d31a4d74_43)] | | |

| Item 6. | | | Selected Financial Data | | | [removed: [35](#if9d16c209bad4b4282f4e8568b569b9d_49) | | | | | |] [added: [32](#i57fcb5c1c22443c7853b70e0d31a4d74_49)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [36](#if9d16c209bad4b4282f4e8568b569b9d_52) | | | | | |] [added: [33](#i57fcb5c1c22443c7853b70e0d31a4d74_52)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [49](#if9d16c209bad4b4282f4e8568b569b9d_82) | | | | | |] [added: [45](#i57fcb5c1c22443c7853b70e0d31a4d74_85)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [50](#if9d16c209bad4b4282f4e8568b569b9d_85) | | | | | |] [added: [46](#i57fcb5c1c22443c7853b70e0d31a4d74_91)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [109](#if9d16c209bad4b4282f4e8568b569b9d_196) | | | | | |] [added: [100](#i57fcb5c1c22443c7853b70e0d31a4d74_205)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [109](#if9d16c209bad4b4282f4e8568b569b9d_199) | | | | | |] [added: [100](#i57fcb5c1c22443c7853b70e0d31a4d74_208)] | | |

| Item 9B. | | | Other Information | | | [removed: [110](#if9d16c209bad4b4282f4e8568b569b9d_202) | | | | | |] [added: [101](#i57fcb5c1c22443c7853b70e0d31a4d74_2911)] | | |

| PART III | | | | | | | | | [removed: | | | | | |]

| Item 10. | | | [removed: Director,] [added: Directors,] Executive Officers and Corporate Governance | | | [removed: [111](#if9d16c209bad4b4282f4e8568b569b9d_208) | | | | | |] [added: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_217)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [111](#if9d16c209bad4b4282f4e8568b569b9d_211) | | | | | |] [added: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_220)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [111](#if9d16c209bad4b4282f4e8568b569b9d_214) | | | | | |] [added: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_223)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [111](#if9d16c209bad4b4282f4e8568b569b9d_217) | | | | | |] [added: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_226)] | | |

| Item 14. | | | Principal [removed: Accounting] [added: Accountant] Fees and Services | | | [removed: [111](#if9d16c209bad4b4282f4e8568b569b9d_220) | | | | | |] [added: [102](#i57fcb5c1c22443c7853b70e0d31a4d74_229)] | | |

| PART IV | | | | | | | | | [removed: | | | | | |]

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [112](#if9d16c209bad4b4282f4e8568b569b9d_226) | | | | | |] [added: [103](#i57fcb5c1c22443c7853b70e0d31a4d74_235)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [116](#if9d16c209bad4b4282f4e8568b569b9d_232) | | | | | |] [added: [107](#i57fcb5c1c22443c7853b70e0d31a4d74_241)] | | |

*•expectations regarding our Flash Ventures joint venture with Kioxia [removed: Corporation,] [added: Corporation (“Kioxia”),] the flash industry and our flash wafer output plans;*

- *expectations regarding pricing [added: trends and] conditions for [removed: flash] [added: our] products;*

[removed: *Forward-looking] [added: *These forward-looking] statements are [added: based on management’s current expectations and are] subject to risks and uncertainties that could cause actual results to differ materially from those expressed [added: or implied] in the forward-looking statements.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [101](#i57fcb5c1c22443c7853b70e0d31a4d74_211) | | |

| | | | | | | | | |

| | | | | | | | | |

Forward-looking statements may include statements regarding our market position and portfolio synergies; consumer trends and market conditions.

*•consumer trends and market conditions, market opportunities and our market position;*

*•product synergies and our product plans and business strategies;*

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Our principal manufacturing, R&D, marketing and administrative facilities as of July [removed: 3, 2020] [added: 2, 2021] were as follows:

| San Jose | | | | | | Owned [removed: and Leased] | | | | | | [removed: 2,561,000] [added: 2,275,000] | | | | | | Manufacturing of head wafers, head, media and product development, R&D, administrative, marketing and sales | | |

| Shanghai | | | | | | Owned | | | | | | [removed: 774,000] [added: 914,000] | | | | | | Assembly and test of SSDs | | |

| Penang | | | | | | Owned | | | | | | [removed: 1,683,000] [added: 1,872,000] | | | | | | Assembly and test of SSDs, manufacturing of media, and R&D | | |

| Bang Pa-In | | | | | | Owned [added: and Leased] | | | | | | [removed: 1,578,000] [added: 1,673,000] | | | | | | Slider fabrication, manufacturing of HDDs and HGAs, and R&D | | |

| Prachinburi | | | | | | Owned | | | | | | [removed: 838,000] [added: 1,566,000] | | | | | | Manufacturing of HDDs | | |

Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WDC.” The approximate number of holders of record of our common stock as of August [removed: 19, 2020] [added: 18, 2021] was [removed: 920.][added: 893.]

For [removed: additional] [added: more] information about our [removed: share repurchase program] [added: dividend policy] see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations - [removed: Stock Repurchase Program.*][added: Short and Long-term Liquidity.*]

In April 2020, we suspended our quarterly cash [removed: dividend policy.][added: dividend.]

The following graph compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Technology Hardware & Equipment Index for the five years ended July [removed: 3, 2020.][added: 2, 2021.]

The graph assumes that $100 was invested in our common stock at the close of market on July [removed: 2, 2015] [added: 1, 2016] and that all dividends were reinvested.

(Assumes $100 investment [added: at market close] on July [removed: 2, 2015)][added: 1, 2016)]

[removed: ][added: ]

| | | | July [removed: 2, 2015 | | | | | | July] 1, 2016 | | | | | | June 30, 2017 | | | | | | June 29, 2018 | | | | | | June 28, 2019 | | | | | | July 3, 2020 | | | [added: | | | July 2, 2021 | | |]

| Dow Jones U.S. Technology Hardware & Equipment Index | | | $ | 100.00 | | | | | $ | [removed: 92.31] [added: 141.24] | | | | | $ | [removed: 130.38] [added: 183.98] | | | | | $ | [removed: 169.84] [added: 198.37] | | | | | $ | [removed: 183.12] [added: 288.56] | | | | | $ | [removed: 266.37] [added: 445.95] | |

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 195.92 | | | | | $ | 175.32 | | | | | $ | 112.54 | | | | | $ | 103.42 | | | | | $ | 171.09 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 117.90 | | | | | $ | 134.84 | | | | | $ | 148.89 | | | | | $ | 160.06 | | | | | $ | 225.36 | |

Repurchases of Equity Securities

We have not repurchased shares of our common stock pursuant to our stock repurchase program since the first quarter of fiscal 2019.

For more information about our dividend policy see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations - Cash Dividends.*

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 59.58 | | | | | $ | 116.72 | | | | | $ | 104.45 | | | | | $ | 67.05 | | | | | $ | 61.61 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 103.99 | | | | | $ | 122.60 | | | | | $ | 140.23 | | | | | $ | 154.83 | | | | | $ | 166.45 | |

\[Reserved\]

Financial Highlights

This selected consolidated financial data should be read together with the Consolidated Financial Statements and related Notes contained in this Annual Report on Form 10-K, as well as the section of this Annual Report on Form 10-K entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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| | | | July 3, 2020 | | | | | | June 28, 2019 | | | | | | June 29, 2018 | | | | | | June 30, 2017 | | | | | | July 1, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | *(in millions, except per share and employee data)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue, net | | | $ | 16,736 | | | | | $ | 16,569 | | | | | $ | 20,647 | | | | | $ | 19,093 | | | | | $ | 12,994 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Gross profit | | | 3,781 | | | | | | 3,752 | | | | | | 7,705 | | | | | | 6,072 | | | | | | 3,435 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income (loss) | | | (250) | | | | | | (754) | | | | | | 675 | | | | | | 397 | | | | | | 242 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Income (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | $ | (0.84) | | | | | $ | (2.58) | | | | | $ | 2.27 | | | | | $ | 1.38 | | | | | $ | 1.01 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted | | | $ | (0.84) | | | | | $ | (2.58) | | | | | $ | 2.20 | | | | | $ | 1.34 | | | | | $ | 1.00 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash dividends declared per common share | | | $ | 1.50 | | | | | $ | 2.00 | | | | | $ | 2.00 | | | | | $ | 2.00 | | | | | $ | 2.00 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Working capital | | | $ | 4,642 | | | | | $ | 4,660 | | | | | $ | 6,182 | | | | | $ | 6,712 | | | | | $ | 5,635 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets | | | $ | 25,662 | | | | | $ | 26,370 | | | | | $ | 29,235 | | | | | $ | 29,860 | | | | | $ | 32,862 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term debt | | | $ | 9,289 | | | | | $ | 10,246 | | | | | $ | 10,993 | | | | | $ | 12,918 | | | | | $ | 13,660 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shareholders’ equity | | | $ | 9,551 | | | | | $ | 9,967 | | | | | $ | 11,531 | | | | | $ | 11,418 | | | | | $ | 11,145 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Number of employees (1) | | | 63,800 | | | | | | 61,800 | | | | | | 71,600 | | | | | | 67,600 | | | | | | 72,900 | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1) Excludes temporary employees and contractors.

Results for Kazan Networks, Inc., Tegile Systems, Inc., Upthere, Inc., and SanDisk Corporation, which were acquired on September 10, 2019, September 15, 2017, August 25, 2017 and May 12, 2016, respectively, are included in our operating results only after their respective dates of acquisition.

Index to Financial [removed: Statements and Financial Statement Schedule][added: Statements]

| Report of Independent Registered Public Accounting Firm | | | [removed: [51](#if9d16c209bad4b4282f4e8568b569b9d_88)] [added: [47](#i57fcb5c1c22443c7853b70e0d31a4d74_94)] | | |

| Consolidated Balance Sheets — As of July [added: 2, 2021 and July] 3, 2020 [removed: and June 28, 2019] | | | [removed: [53](#if9d16c209bad4b4282f4e8568b569b9d_91)] [added: [49](#i57fcb5c1c22443c7853b70e0d31a4d74_97)] | | |

| Consolidated Statements of Operations — Three Years Ended July [removed: 3, 2020] [added: 2, 2021] | | | [removed: [54](#if9d16c209bad4b4282f4e8568b569b9d_97)] [added: [50](#i57fcb5c1c22443c7853b70e0d31a4d74_100)] | | |

| Consolidated Statements of Comprehensive Income (Loss) — Three Years Ended July [removed: 3, 2020] [added: 2, 2021] | | | [removed: [55](#if9d16c209bad4b4282f4e8568b569b9d_100)] [added: [51](#i57fcb5c1c22443c7853b70e0d31a4d74_103)] | | |

| Consolidated Statements of Cash Flows — Three Years Ended July [removed: 3, 2020] [added: 2, 2021] | | | [removed: [56](#if9d16c209bad4b4282f4e8568b569b9d_103)] [added: [52](#i57fcb5c1c22443c7853b70e0d31a4d74_106)] | | |

| Consolidated Statements of Shareholders' Equity — Three Years Ended July [removed: 3, 2020] [added: 2, 2021] | | | [removed: [57](#if9d16c209bad4b4282f4e8568b569b9d_109)] [added: [53](#i57fcb5c1c22443c7853b70e0d31a4d74_109)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [58](#if9d16c209bad4b4282f4e8568b569b9d_112)] [added: [54](#i57fcb5c1c22443c7853b70e0d31a4d74_115)] | | |

We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of July [removed: 3, 2020] [added: 2, 2021] and [removed: June 28, 2019,] [added: July 3, 2020,] the related consolidated statements of operations, comprehensive income (loss), cash [removed: flows,] [added: flows] and shareholders’ equity for each of the years in the three-year period ended July [removed: 3, 2020,] [added: 2, 2021,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of July [removed: 3, 2020,] [added: 2, 2021,] based on criteria established in *Internal Control - Integrated Framework* *(2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July [removed: 3, 2020] [added: 2, 2021] and [removed: June 28, 2019,] [added: July 3, 2020,] and the results of its operations and its cash flows for each of the years in the three-year period ended July [removed: 3, 2020,] [added: 2, 2021,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July [removed: 3, 2020,] [added: 2, 2021,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex [removed: judgment.][added: judgments.]

The [added: following are the] primary procedures [added: we] performed to address this critical audit [removed: matter include the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls [removed: over] [added: related to] the Company’s process of determining the variable [removed: consideration,] [added: consideration for sales to resellers,] including controls related to the development of the assumption of anticipated price decreases during the reseller holding period.

We developed an expectation of the variable consideration for resellers based on historically recorded variable [removed: consideration] [added: consideration, subsequent payments] and [added: credits issued and then] compared [removed: it] [added: our expectation] to the actual variable [removed: consideration.][added: consideration recorded.]

| | | | [removed: July 3, 2020] | | | | | | [removed: June 28, 2019] | | | | | | [added: July 2, 2021] | | | | | | [added: July 3, 2020 | | | | | | June 28, 2019 | | |]

| ASSETS | | | | | | | | | | | | [removed: | | | | | | | | |]

| Current assets: | | | | | | | | | | | | [removed: | | | | | | | | |]

| Cash and cash equivalents | | | $ | [removed: 3,048] [added: 3,370] | | | | | $ | [removed: 3,455 | | | | | | | | |] [added: 3,048] | |

| Accounts receivable, net | | | [removed: 2,379 | | | | | | 1,204 | | |] [added: 2,257] | | | | | | [added: 2,379] | | |

| Inventories | | | [removed: 3,070 | | | | | | 3,283 | | |] [added: 3,616] | | | | | | [added: 3,070] | | |

| Other current assets | | | [removed: 551 | | | | | | 535 | | |] [added: 514] | | | | | | [added: 551] | | |

| Total current assets | | | [removed: 9,048 | | | | | | 8,477 | | |] [added: 9,757] | | | | | | [added: 9,048] | | |

| Property, plant and equipment, net | | | [removed: 2,854 | | | | | | 2,843 | | |] [added: 3,188] | | | | | | [added: 2,854] | | |

| Notes receivable and investments in Flash Ventures | | | [removed: 1,875 | | | | | | 2,791 | | |] [added: 1,586] | | | | | | [added: 1,875] | | |

| Goodwill | | | [removed: 10,067 | | | | | | 10,076 | | |] [added: 10,066] | | | | | | [added: 10,067] | | |

| Other intangible assets, net | | | [removed: 941 | | | | | | 1,711 | | |] [added: 442] | | | | | | [added: 941] | | |

| Other non-current assets | | | [removed: 877 | | | | | | 472 | | |] [added: 1,093] | | | | | | [added: 877] | | |

| Total assets | | | $ | [removed: 25,662] [added: 26,132] | | | | | $ | [removed: 26,370 | | | | | | | | |] [added: 25,662] | |

| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | [removed: | | | | | | | | |]

| Current liabilities: | | | | | | | | | | | | [removed: | | | | | | | | |]

| Accounts payable | | | $ | [removed: 1,945] [added: 1,934] | | | | | $ | [removed: 1,567 | | | | | | | | |] [added: 1,945] | |

| Accounts payable to related parties | | | [removed: 407 | | | | | | 331 | | |] [added: 398] | | | | | | [added: 407] | | |

| Accrued expenses | | | [removed: 1,296] [added: 1,653] | | | | | | 1,296 | | | [removed: | | | | | | | | |]

| Accrued compensation | | | [removed: 472 | | | | | | 347 | | |] [added: 634] | | | | | | [added: 472] | | |

| Current portion of long-term debt | | | [removed: 286 | | | | | | 276 | | |] [added: 251] | | | | | | [added: 286] | | |

| Total current liabilities | | | [removed: 4,406 | | | | | | 3,817 | | |] [added: 4,870] | | | | | | [added: 4,406] | | |

| Long-term debt | | | [removed: 9,289 | | | | | | 10,246 | | |] [added: 8,474] | | | | | | [added: 9,289] | | |

| Other liabilities | | | [removed: 2,416 | | | | | | 2,340 | | |] [added: 2,067] | | | | | | [added: 2,416] | | |

| Net income (loss) | | | $ | 821 | | | | | $ | (250) | | | | | $ | (754) | |

| Repayment of government grants | | | (9) | | | | | | — | | | | | | — | | |

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We developed an expectation of the variable consideration for resellers based on subsequent payments and credits issued and compared it to the actual variable consideration.

August 27, 2020

WESTERN DIGITAL CORPORATION

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cash premium on extinguishment of debt | | | — | | | | | | — | | | | | | 720 | | | | | | | | | | | | | | |

| Settlement of debt hedge contracts | | | — | | | | | | — | | | | | | 28 | | | | | | | | | | | | | | |

| Proceeds from debt | | | — | | | | | | — | | | | | | 13,840 | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at June 30, 2017 | | | 312 | | | | | | 3 | | | | | | (18) | | | | | | (1,666) | | | | | | 4,506 | | | | | | (58) | | | | | | 8,633 | | | | | | 11,418 | | | | | | | | | | | | | | |

| Equity value of convertible debt issuance, net of deferred taxes | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 125 | | | | | | — | | | | | | — | | | | | | 125 | | | | | | | | | | | | | | |

| Dividends to shareholders | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 29 | | | | | | — | | | | | | (621) | | | | | | (592) | | | | | | | | | | | | | | |

| Net unrealized gain on derivative contracts and available-for-sale securities | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | | | | | — | | | | | | 2 | | | | | | | | | | | | | | |

| Repurchases of common stock | | | — | | | | | | — | | | | | | (8) | | | | | | (563) | | | | | | — | | | | | | — | | | | | | — | | | | | | (563) | | | | | | | | | | | | | | |

[Table of Conte](#if9d16c209bad4b4282f4e8568b569b9d_10)[n](#if9d16c209bad4b4282f4e8568b569b9d_10)[t](#if9d16c209bad4b4282f4e8568b569b9d_10)[s](#if9d16c209bad4b4282f4e8568b569b9d_10)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Results for reporting periods beginning with fiscal year 2019 are presented under Topic 606, while prior period information presented on the financial statements or elsewhere in this Annual Report on Form 10-K is reported under the Company’s historic accounting policies under Topic 605 in effect for those periods and is not adjusted to reflect the retrospective effect of the adoption of Topic 606.

As of July 3, 2020 and June 28, 2019, contract liabilities were $3 million and $43 million, respectively, and were reflected in Accrued expenses.

Changes in the contract liability balance during fiscal years 2020 and 2019 include $24 million and $104 million, respectively, of revenue recognized during the respective periods, of which the substantial majority relates to the balances that were deferred at the end of the respective previous years, June 28, 2019 and June 29, 2018, partially offset by payments received and billings in advance of satisfying performance obligations.

ASU 2016-02 supersedes ASC 840 “Leases”.

The amendments in this update require, among other things, that lessees recognize the following for all leases (unless a policy election is made by class of underlying asset to exclude short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or the direct use of, a specified asset for the lease term.

The FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), on July 30, 2018, which allows entities to apply the provisions of ASC 842 at the effective date without adjusting comparative periods.

The Company adopted this standard effective June 29, 2019, the first day of the fiscal year ending July 3, 2020, and has elected the transition method provided in ASU 2018-11 to apply Topic 842 as of the date of adoption without adjusting comparative periods.

The Company has elected the package of practical expedients and did not reassess prior conclusions including (a) whether its contracts are or contain a lease, (b) lease classification and (c) capitalization of initial direct costs.

The adoption of Topic 842 resulted in an increase in lease assets and a corresponding increase in lease liabilities on the Consolidated Balance Sheet of $221 million as of June 29, 2019.

The cumulative effect of adopting Topic 842 also included an after-tax decrease to opening retained earnings of $5 million as of June 29, 2019, which was primarily related to previously recorded sublease proceed assumptions on lease exit liabilities for which there was no expected future economic benefit at transition.

See Note 9, *Leases and Other Commitments*, for additional disclosures related to this standard.

In October 2018, the FASB issued ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes” (“ASU 2018-16”).

ASU 2018-16 allows for the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, Derivatives and Hedging.

The Company adopted this standard in the first quarter of 2020.

The Company’s adoption of ASU 2018-16 did not have a material impact on its Consolidated Financial Statements.

The Company does not expect this update to have a material impact on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).

| Reduction in goodwill in connection with disposition of business | | | (21) | | |

| | | | June 28, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Existing technology | | | 3 | | | | | | 4,332 | | | | | | (3,316) | | | | | | 1,016 | | | | | | | | | | | | | | | | | | | | |

| Customer relationships | | | 6 | | | | | | 635 | | | | | | (372) | | | | | | 263 | | | | | | | | | | | | | | | | | | | | |

| Total intangible assets | | | | | | | | | 5,896 | | | | | | (4,185) | | | | | | 1,711 | | | | | | | | | | | | | | | | | | | | |

As required by [removed: SEC] Rule 13a‑15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10‑K.

There has been no change in our internal control over financial reporting during the fourth fiscal quarter ended July [removed: 3, 2020,] [added: 2, 2021,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

These [added: system] changes [removed: did not] [added: resulted in the modification of certain processes and controls, but no changes] materially [removed: affect] [added: affected, or are reasonably likely to materially affect,] our internal control over financial reporting.

As we implement [removed: the remaining functionality under this ERP system over the next several years,] [added: these enhancements and modifications in future periods,] we will continue to assess the impact on our internal control over financial reporting.

In the third quarter of fiscal 2021, we substantially completed the initial implementation of our enterprise resource planning system on a worldwide basis.

Going forward, we expect to make routine enhancements and modifications in the normal course of business.

In addition, as noted previously, we are implementing new reporting modules and processes to provide more discrete information to support our new organizational structure.

We are implementing an enterprise resource planning (“ERP”) system on a worldwide basis, which is expected to improve the efficiency of certain financial and related transactional processes.

The gradual implementation is expected to occur in phases over the next several years.

We have completed the implementation of certain processes, including the financial consolidation and reporting, fixed assets, supplier management and indirect procure-to-pay processes, and have revised and updated the related controls.

On August 23, 2021, we entered into a Separation and General Release Agreement with Lori Sundberg, Executive Vice President and Chief Human Resources Officer (the “Separation Agreement”).

Ms. Sundberg has agreed to continue in an advisory capacity through October 1, 2021 to assist with the transition of her duties and responsibilities.

Pursuant to the Separation Agreement, Ms. Sundberg will receive the Tier I severance benefits to which she is entitled pursuant to the terms and conditions of our Amended and Restated Executive Severance Plan, the material terms of which have been previously disclosed and a copy of which is filed as Exhibit 10.7 to this Annual Report on Form 10-K (the “Separation Benefits”).

Ms. Sundberg’s receipt of the Separation Benefits is subject to her non-revocation of a general release of claims included in the Separation Agreement and compliance with the terms of the Separation Agreement, including certain non-solicitation and cooperation provisions.

None.

PART III

Not applicable.

PART III

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the fiscal year ended July [removed: 3, 2020.][added: 2, 2021.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the fiscal year ended July [removed: 3, 2020.][added: 2, 2021.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the fiscal year ended July [removed: 3, 2020.][added: 2, 2021.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the fiscal year ended July [removed: 3, 2020.][added: 2, 2021.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the fiscal year ended July [removed: 3, 2020.][added: 2, 2021.]

| [removed: [3.1](http://www.sec.gov/Archives/edgar/data/106040/000095013706001502/a17011exv3w1.htm)] [added: [3.1](https://www.sec.gov/Archives/edgar/data/0000106040/000095013706001502/a17011exv3w1.htm)] | | | | | | Amended and Restated Certificate of Incorporation of Western Digital Corporation, as amended to date (Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 8, 2006) | | |

| [removed: [3.2](http://www.sec.gov/Archives/edgar/data/106040/000119312518153458/d577779dex31.htm)] [added: [3.2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)] | | | | | | Amended and Restated By-Laws of Western Digital Corporation, as amended effective as of [removed: May 2, 2018] [added: February 10, 2021] (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on [removed: May 7, 2018)] [added: February 12, 2021)] | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/106040/000010604019000058/wdc-2019q4ex41.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex101.htm)] | | | | | | [removed: Description of] Western Digital [removed: Corporation’s Capital Stock] [added: Corporation Amended and Restated 2017 Performance Incentive Plan, amended and restated as of August 11, 2020] (Filed as Exhibit [removed: 4.1] [added: 10.1] to the Company’s [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] (File No. 1-08703) with the Securities and Exchange Commission on [removed: August 27, 2019)] [added: February 9, 2021)*] | | |

| [removed: [4.3](http://www.sec.gov/Archives/edgar/data/106040/000119312516588382/d154176dex41.htm)] [added: [10.15](https://www.sec.gov/Archives/edgar/data/106040/000119312516588382/d154176dex102.htm)] | | | | | | [removed: First Supplemental Indenture to the Indenture filed as Exhibit 4.2 hereto,] [added: Security Agreement,] dated as of May 12, 2016, [added: by and] among [removed: SanDisk Corporation, The Bank of New York Mellon Trust Company,] [added: the debtors (as defined therein) party thereto and JPMorgan Chase Bank,] N.A., as [removed: trustee, and Western Digital Corporation] [added: collateral agent] (Filed as Exhibit [removed: 4.1] [added: 10.2] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 12, 2016) | | |

| [removed: [4.4](http://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex41.htm)] [added: [4.2](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex41.htm)] | | | | | | Indenture (including Form of 4.750% Senior Notes due 2026), dated as of February 13, 2018, among Western Digital Corporation; HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-222762) with the Securities and Exchange Commission on February 13, 2018) | | |

| [removed: [4.5](http://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex42.htm)] [added: [4.3](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex42.htm)] | | | | | | Indenture (including Form of 1.50% Convertible Senior Notes due 2024), dated as of February 13, 2018, among Western Digital Corporation; HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee (Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-222762) with the Securities and Exchange Commission on February 13, 2018) | | |

| [removed: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000119312519292358/d829006dex101.htm)] [added: [10.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312518320967/d642144dex102.htm)] | | | | | | Western Digital Corporation Amended and Restated [removed: 2017 Performance Incentive] [added: 2005 Employee Stock Purchase] Plan, [removed: amended and restated] as [removed: of] [added: amended] August [removed: 7, 2019] [added: 2, 2018] (Filed as Exhibit [removed: 10.1] [added: 10.2] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 14, 2019)*] [added: 7, 2018)*] | | |

| [removed: [10.1.1](https://www.sec.gov/Archives/edgar/data/106040/000095012311093040/c22815exv10w2.htm)] [added: [10.1.1](https://www.sec.gov/Archives/edgar/data/0000106040/000095012311093040/c22815exv10w2.htm)] | | | | | | Form of Notice of Grant of Stock Option and Option Agreement - Executives, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on October 28, 2011)* | | |

| [removed: [10.1.2](https://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex1013.htm)] [added: [10.1.2](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex1013.htm)] | | | | | | Form of Notice of Grant of Stock Units and Stock Unit Award Agreement - Executives, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)* | | |

| [removed: [10.1.3](https://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex1014.htm)] [added: [10.1.3](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex1014.htm)] | | | | | | Form of Notice of Grant of Stock Units and Stock Unit Award Agreement, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)* | | |

| [removed: [10.1.4](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex101.htm)] [added: [10.1.4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex101.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - Financial Measures, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 6, 2018)* | | |

| [removed: [10.1.5](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex102.htm)] [added: [10.1.5](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - TSR Measure, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 6, 2018)* | | |

| [removed: [10.1.6](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex101.htm)] [added: [10.1.6](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex101.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - Financial Measures, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 12, 2019)* | | |

| [removed: [10.1.7](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex102.htm)] [added: [10.1.7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - TSR Measure, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 12, 2019)* | | |

| [removed: [10.1.8](http://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1011.htm)] [added: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1011.htm)] | | | | | | Form of Notice of Grant of Stock Option and Option Agreement - Executives, as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.1.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)* | | |

| [removed: [10.1.9](http://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1013.htm)] [added: [10.1.11](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1014.htm)] | | | | | | Form of Notice of Grant of Stock Units and Stock Unit Award [removed: Agreement - Executives,] [added: Agreement,] as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit [removed: 10.1.3] [added: 10.1.4] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)* | | |

| [removed: [10.1.10](http://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1014.htm)] [added: [10.1.8](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | Form of Notice of Grant of [added: Performance] Stock Units and [added: Performance] Stock Unit Award [removed: Agreement, as amended on November 3, 2015,] [added: Agreement – Financial Measure,] under the [removed: Western Digital Corporation] Amended and Restated [removed: 2004 Performance Incentive Plan (now named the] Western Digital Corporation 2017 Performance Incentive [removed: Plan)] [added: Plan] (Filed as Exhibit [removed: 10.1.4] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February [removed: 10, 2016)*] [added: 9, 2021)*] | | |

| [removed: [10.1.11](https://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex102.htm)] [added: [10.1.12](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex102.htm)] | | | | | | Western Digital Corporation 2017 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, as amended November 1, 2017 (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)* | | |

| [removed: [10.1.12](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex103.htm)] [added: [10.1.13](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex103.htm)] | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement - Vice President and Above under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 6, 2018)* | | |

| [removed: [10.1.13](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex103.htm)] [added: [10.1.14](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000075/wdc-2020q1ex103.htm)] | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement - Vice President and Above under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 12, 2019)* | | |

| [removed: [10.1.14](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex104.htm)] [added: [10.1.16](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex104.htm)] | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 6, 2018)* | | |

| [removed: [10.1.15](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex102.htm)] [added: [10.1.17](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex102.htm)] | | | | | | Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement – CEO Sign-On Award (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 8, 2020)* | | |

| [removed: [10.1.16](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex103.htm)] [added: [10.1.18](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex103.htm)] | | | | | | Notice of Grant of Performance Stock Units and Performance Stock Unit Award – TSR Measure (CEO Sign-On Award) (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 8, 2020)* | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex104.htm)] [added: [10.2](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000024/wdc-2021q3ex101.htm)] | | | | | | Western Digital Corporation Executive Short-Term Incentive Plan (supersedes the Western Digital Corporation [added: Executive Short-Term] Incentive [removed: Compensation Plan),] [added: Plan] dated August 7, [removed: 2019] [added: 2019), dated February 9, 2021] (Filed as Exhibit [removed: 10.4] [added: 10.1] to the Company’s Quarterly Report on Form 10‑Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 12, 2019)*] [added: May 6, 2021)*] | | |

| [removed: [10.3](https://www.sec.gov/Archives/edgar/data/106040/000119312518320967/d642144dex102.htm)] [added: [10.8](https://www.sec.gov/Archives/edgar/data/0000106040/000089256902002190/a85682exv10w4.txt)] | | | | | | [added: Form of Indemnity Agreement for Directors of] Western Digital Corporation [removed: Amended and Restated 2005 Employee Stock Purchase Plan, as amended August 2, 2018] (Filed as Exhibit [removed: 10.2] [added: 10.4] to the Company’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 7, 2018)*] [added: 8, 2002)*] | | |

| [removed: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312516593317/d194750dex42.htm)] [added: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312516593317/d194750dex41.htm)] | | | | | | SanDisk Corporation 2013 Incentive Plan (Filed as Exhibit [removed: 4.2] [added: 4.1] to the Company’s Registration Statement on Form S-8 (File No. 333-211420) with the Securities and Exchange Commission on May 17, 2016)* | | |

| [removed: [10.6](https://www.sec.gov/Archives/edgar/data/106040/000119312515366646/d55959dex102.htm)] [added: [10.9](https://www.sec.gov/Archives/edgar/data/0000106040/000089256902002190/a85682exv10w5.txt)] | | | | | | [added: Form of Indemnity Agreement for Officers of] Western Digital Corporation [removed: Amended and Restated Change of Control Severance Plan, amended and restated as of November 3, 2015] (Filed as Exhibit [removed: 10.2] [added: 10.5] to the Company’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 5, 2015)*] [added: 8, 2002)*] | | |

| [removed: [10.7](https://www.sec.gov/Archives/edgar/data/106040/000010604017000007/wdc-2017q2ex103executivese.htm)] [added: [10.1.9](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | [added: Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement – TSR Measure, under the Amended and Restated] Western Digital Corporation [removed: Executive Severance Plan, amended and restated as of February 2,] 2017 [added: Performance Incentive Plan] (Filed as Exhibit [removed: 10.3] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February [removed: 7, 2017)*] [added: 9, 2021)*] | | |

| [removed: [10.8](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] [added: [10.12](https://www.sec.gov/Archives/edgar/data/106040/000010604020000061/wdc-2021q1ex101.htm)] | | | | | | [removed: Form of Indemnity Agreement for Directors] [added: Special Retention Agreement, dated as] of [removed: Western Digital Corporation] [added: August 26, 2019, with Michael C. Ray] (Filed as Exhibit [removed: 10.4] [added: 10.1] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November [removed: 8, 2002)*] [added: 6, 2020)*] | | |

| [removed: [10.9](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)] [added: [10.10](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000029/wdc-2018q4ex1010.htm)] | | | | | | Form of [removed: Indemnity] [added: Indemnification] Agreement [removed: for Officers of Western Digital] [added: entered into between SanDisk] Corporation [added: and its directors and officers] (Filed as Exhibit [removed: 10.5] [added: 10.10] to the Company’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 8, 2002)*] [added: August 24, 2018)*] | | |

| [removed: [10.10](https://www.sec.gov/Archives/edgar/data/106040/000010604018000029/wdc-2018q4ex1010.htm)] [added: [10.13.10](https://www.sec.gov/Archives/edgar/data/106040/000010604020000049/wdc-2020q4ex101310.htm)] | | | | | | [removed: Form] [added: Amendment No. 10, dated as] of [removed: Indemnification] [added: July 2, 2020, to the Loan] Agreement [removed: entered into] [added: dated as of April 29, 2016, by and] between [removed: SanDisk] [added: Western Digital] Corporation and [removed: its directors and officers] [added: JPMorgan Chase Bank, N.A., as administrative agent] (Filed as Exhibit [removed: 10.10] [added: 10.13.10] to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August [removed: 24, 2018)*] [added: 28, 2020)] | | |

| [removed: [10.11](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex101.htm)] [added: [10.11](https://www.sec.gov/Archives/edgar/data/0000106040/000010604020000024/wdc-2020q3ex101.htm)] | | | | | | Offer Letter, dated as of February 18, 2020, to David Goeckeler (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 8, 2020)* | | |

| [removed: [10.13.5](http://www.sec.gov/Archives/edgar/data/106040/000119312517337353/d490541dex101.htm)] [added: [10.13.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312517337353/d490541dex101.htm)] | | | | | | Amendment No. 5, dated as of November 8, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 8, 2017) | | |

| [removed: [10.13.6](http://www.sec.gov/Archives/edgar/data/106040/000119312517355698/d498466dex101.htm)] [added: [10.13.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312517355698/d498466dex101.htm)] | | | | | | Amendment No. 6, dated as of November 29, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 29, 2017) | | |

| [removed: [10.13.7](http://www.sec.gov/Archives/edgar/data/106040/000119312518061179/d482474dex101.htm)] [added: [10.13.7](https://www.sec.gov/Archives/edgar/data/0000106040/000119312518061179/d482474dex101.htm)] | | | | | | Amendment No. 7, dated as of February 27, 2018, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on February 27, 2018) | | |

| [removed: [10.13.8](http://www.sec.gov/Archives/edgar/data/106040/000119312518164083/d542924dex101.htm)] [added: [10.13.8](https://www.sec.gov/Archives/edgar/data/0000106040/000119312518164083/d542924dex101.htm)] | | | | | | Amendment No. 8, dated as of May 15, 2018, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 15, 2018) | | |

| [removed: [10.20](http://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex106.htm)] [added: [10.20](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex106.htm)] | | | | | | FAL Commitment and Extension Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Ireland) Limited and Toshiba Memory Corporation (Filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)# | | |

| [removed: [10.21](http://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex107.htm)] [added: [10.21](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex107.htm)] | | | | | | Y6 Facility Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Flash Partners, Ltd., Flash Alliance, Ltd., Flash Forward, Ltd. and Toshiba Memory Corporation (Filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)# | | |

| [removed: [10.22](https://www.sec.gov/Archives/edgar/data/106040/000010604019000058/wdc-2019q4ex1022.htm)] [added: [10.22](https://www.sec.gov/Archives/edgar/data/0000106040/000010604019000058/wdc-2019q4ex1022.htm)] | | | | | | K1 Facility Agreement, dated as of May 15, 2019, by and among Western Digital, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Flash Partners, Ltd., Flash Alliance, Ltd., Flash Forward Ltd., Toshiba Memory Corporation and Toshiba Memory Corporation Iwate (Filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 27, [removed: 2019##] [added: 2019)##] | | |

| [removed: [10.23](http://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex108.htm)] [added: [10.23](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000010/wdc-2018q2ex108.htm)] | | | | | | Confidential Settlement and Mutual Release Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Toshiba Corporation and Toshiba Memory Corporation (Filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)# | | |

| [4.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex41.htm) | | | | | | Description of Western Digital Corporation’s Capital Stock† | | |

| [10.1.15](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex104.htm) | | | | | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement – Vice President and Above, under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (Filed No. 1-08703) with the Securities and Exchange Commission on February 9, 2021)* | | |

| [10.6](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex106.htm) | | | | | | Western Digital Corporation Amended and Restated Change in Control Severance Plan, amended and restated as of May 24, 2021*† | | |

| [10.7](https://www.sec.gov/Archives/edgar/data/106040/000010604021000040/wdc-2021q4ex107.htm) | | | | | | Western Digital Corporation Amended and Restated Executive Severance Plan, amended and restated as of May 24, 2021*† | | |

| [4.2](http://www.sec.gov/Archives/edgar/data/1000180/000110465913078765/a13-22405_3ex4d1.htm) | | | | | | Indenture (including Form of 0.5% Convertible Senior Notes due 2020), dated as of October 29, 2013, by and between SanDisk Corporation and The Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit 4.1 to SanDisk Corporation’s Current Report on Form 8-K (File No. 000-26734) with the Securities and Exchange Commission on October 29, 2013) | | |

| [10.12](https://www.sec.gov/Archives/edgar/data/106040/000010604020000049/wdc-2020q4ex1012.htm) | | | | | | Retention Agreement, dated April 1, 2020, with Michael Cordano†* | | |

| [10.13.10](https://www.sec.gov/Archives/edgar/data/106040/000010604020000049/wdc-2020q4ex101310.htm) | | | | | | Amendment No. 10, dated as of July 2, 2020, to the Loan Agreement dated as of April 29, 2016, by and between Western Digital Corporation and JPMorgan Chase Bank, N.A., as administrative agent† | | |

| [10.15](http://www.sec.gov/Archives/edgar/data/106040/000119312516588382/d154176dex102.htm) | | | | | | Security Agreement, dated as of May 12, 2016, by and among the debtors (as defined therein) party thereto and JPMorgan Chase Bank, N.A., as collateral agent (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 12, 2016) | | |

| | | | WESTERN DIGITAL CORPORATION | | | | | | [removed: | | |]

| | | | By: | | | /s/ Gene Zamiska | | | [removed: | | |]

| | | | | | | Gene Zamiska | | | [removed: | | |]

| | | | | | | [removed: *Vice] [added: *Senior Vice] President, Global Accounting and Chief Accounting Officer* | | | [removed: | | |]

| | | | | | | (Principal Accounting Officer) | | | [removed: | | |]

Dated: August [removed: 27, 2020][added: 25, 2021]

| /s/ David V. Goeckeler | | | | | | Chief Executive Officer, Director (Principal Executive Officer) | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Robert K. Eulau | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Gene Zamiska | | | | | | [added: Senior] Vice President, Global Accounting and Chief Accounting Officer (Principal Accounting Officer) | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Matthew E. Massengill | | | | | | Chairman of the Board | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Kimberly E. Alexy | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Martin I. Cole | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Kathleen A. Cote | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Tunҫ Doluca | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Paula A. Price | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| /s/ Stephanie A. Streeter | | | | | | Director | | | | | | August [removed: 27, 2020] [added: 25, 2021] | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| /s/ Thomas Caulfield | | | | | | Director | | | | | | August 25, 2021 | | |

| Thomas Caulfield | | | | | | | | | | | | | | |

| /s/ Miyuki Suzuki | | | | | | Director | | | | | | August 25, 2021 | | |

| Miyuki Suzuki | | | | | | | | | | | | | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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