Western Digital (WDC) 10-K risk factor changes: FY2023 vs FY2022

Our business can be affected by a number of risks and uncertainties, [added: any of] which could cause material harm to our actual operating results and financial condition.

The COVID-19 pandemic has [added: negatively] impacted and [added: future public health crises, including resurgences of COVID-19] may [removed: continue to] [added: negatively] impact our workforce and [removed: operations, and] [added: operations in the future, as well as] those of our strategic partners, customers, suppliers and logistics providers.

[removed: These] [added: The] impacts [removed: include] [added: we experienced in connection with the COVID-19 pandemic included temporary closures of certain manufacturing facilities;] under-absorbed [removed: overhead,] [added: overhead;] increased logistics, component and other [removed: costs,] [added: costs;] decreased demand for our [removed: products] [added: products;] and manufacturing challenges.

Future outbreaks of infectious disease or other public health crises may have [removed: a] similar [removed: impact.][added: impacts.]

The effects of [removed: such] [added: public] health [removed: crises, including the COVID-19 pandemic,] [added: crises] are uncertain and difficult to predict, but may include:

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

- Increased data security and technology risk as some employees [removed: 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; and

The degree to which [removed: the COVID-19 pandemic or] [added: any] future public health [removed: crises] [added: crises, including resurgences of COVID-19,] ultimately impact our business will depend on many factors beyond our control, which are highly uncertain and cannot be predicted at this time.

In addition, some of our suppliers have experienced a decline in financial [removed: performance.][added: performance, including as a result of cancelled or deferred purchase commitments.]

If a fire (including a climate change-related fire), flood, earthquake, tsunami or other natural disaster, condition or event such as a power outage, contamination event, terrorist attack, cybersecurity incident, physical security breach, political instability, civil unrest, localized labor unrest or other employment issues, or a health epidemic [removed: negatively affects any of these facilities, it would significantly affect our ability to manufacture or sell our products and source components and harm our business.]

Possible impacts include work and equipment stoppages and damage to or closure of our [added: 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 [removed: disasters.][added: disasters, including wildfires and adverse weather events.]

Climate change may reduce the availability [removed: and/or] [added: or] increase the cost of certain types of insurance by contributing to an increase in the incidence and severity of certain natural disasters.

The loss of our key management, staff and skilled [removed: employees,] [added: employees;] the inability to hire and [removed: integrate] [added: develop] new [removed: employees] [added: employees;] or decisions to realign our business could negatively impact our business prospects.

Global competition for skilled employees in the technology industry is intense, and our business success [removed: becomes] [added: is] increasingly dependent on our ability to [removed: retain our key staff] [added: attract, develop] and [removed: skilled employees, to] [added: retain top talent;] implement succession plans for [removed: our] key management and [removed: staff, to attract, integrate] [added: staff] and [removed: retain new] [added: replace aging] skilled employees.

Additionally, uncertainty about [added: business realignment actions or] the structure and organization of our business as a result of our ongoing strategic review could negatively impact our ability to recruit and retain key staff and skilled employees.

Our [removed: employee hiring] [added: ability to hire] and [removed: retention] [added: retain employees] also [removed: depend] [added: depends] on our ability to build and maintain a diverse and inclusive workplace culture and [removed: be] [added: to fund competitive compensation and benefits, each of which contribute to being] viewed as an employer of choice.

Additionally, because a substantial portion of our key employees’ compensation is [removed: placed “at risk” and] linked to the performance of our business, [removed: including through equity compensation, when our operating results are negatively impacted,] we may be at a competitive disadvantage for [removed: retaining and] hiring [removed: key management, staff] and [removed: skilled employees.][added: retaining talent when our operating results are negatively impacted.]

If we are unable to hire and retain key [removed: management, staff or skilled employees,] [added: talent,] our operating results would likely be harmed.

[removed: If] [added: The compromise, damage or interruption of] our technology infrastructure, systems or products [removed: are compromised, damaged or interrupted] by cyber [removed: attacks,] [added: incidents,] data security breaches, other security problems, design defects or [removed: sustain] system [removed: failures, our business] [added: failures] could [removed: be negatively impacted.][added: have a material negative impact on our business.]

We experience cyber [removed: attacks] [added: incidents] of varying degrees on our technology infrastructure and systems and, as a result, unauthorized parties have obtained in the past, and may obtain in the future, access to our computer systems and networks, including cloud-based platforms.

[removed: The] [added: In addition, the] technology infrastructure and systems of some of our suppliers, vendors, service providers, cloud solution providers and partners have in the past experienced, and may in the future experience, such [removed: attacks.][added: incidents.]

Cyber [removed: attacks] [added: incidents] can [removed: include] [added: be caused by] ransomware, computer denial-of-service attacks, worms, and other malicious software programs or other attacks, [removed: and] [added: including the] covert introduction of malware to computers and networks, [removed: including those using] [added: and the use of] techniques [added: or processes] that change [removed: frequently or] [added: frequently,] may be disguised or difficult to detect, or [added: are] designed to remain dormant until a triggering [removed: event or that] [added: event, and] may continue undetected for an extended period of time.

Cyber [removed: attacks] [added: incidents have in the past resulted from, and] may [removed: also include] [added: in the future result from, social engineering or] impersonation of authorized users, [added: and may also result from] efforts to discover and exploit any design flaws, bugs, security vulnerabilities or security weaknesses, intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage.

In some instances, efforts to correct vulnerabilities or prevent [removed: attacks] [added: incidents have in the past and] may [added: in the future] reduce the [added: functionality or] performance of our computer systems and networks, which could negatively impact our business.

We believe [added: malicious] cyber [removed: attack attempts] [added: acts] are increasing in number and that cyber [removed: attackers] [added: threat actors] are increasingly organized and well-financed or supported by state actors, and are developing increasingly sophisticated systems and means to not only [removed: attack] [added: infiltrate] systems, but also to evade detection or to obscure their activities.

Geopolitical tensions or conflicts may create heightened risk of cyber [removed: attacks.][added: incidents.]

Our products are also targets for [added: malicious] cyber [removed: attacks,] [added: acts,] including those products utilized in cloud-based environments as well as our cloud service offerings.

[added: Further, our products contain sophisticated] hardware and operating system software and applications that may contain security problems, security vulnerabilities, or defects in design or [removed: manufacture,] [added: manufacturing,] including “bugs” and other problems that could interfere with the intended operation of our products.

To the extent our products [added: include design defects, suffer system failure or] are [removed: hacked] [added: hacked,] or [added: if] the encryption schemes are compromised or breached, this could harm our business by requiring us to employ additional resources to fix the errors or defects, exposing us to litigation and indemnification claims and hurting our reputation.

[removed: Breaches] [added: Compromises] of our infrastructure, systems or products could also cause our customers and other affected third parties to suffer loss or misuse of proprietary or confidential information, IP, or sensitive or personal information, and could harm our relationships with customers and other third [removed: parties.][added: parties and subject us to liability.]

As a result of actual or perceived breaches, we [removed: could] [added: have in the past experienced and may in the future] experience additional costs, notification requirements, civil and administrative fines and penalties, indemnification claims, litigation, [removed: and] [added: or] damage to our brand and reputation.

In addition, product defects, product recalls or epidemic failures may cause damage to our reputation or customer relationships, lost revenue, indemnification for a recall of our customers’ products, warranty claims, litigation or loss of market share with our customers, including our OEM and [removed: ODM] [added: original design manufacturer (“ODM”)] customers.

The process of reviewing potential strategic alternatives [added: is time consuming and] may be [removed: time consuming,] distracting and disruptive to our business [removed: operations,] [added: operations and long-term planning,] which may cause concern to our current or potential customers, employees, investors, strategic partners and other constituencies and may have a material impact on our business and operating results [removed: and/or] [added: or] result in increased volatility in our share price.

We have and will continue to incur substantial [added: expenses associated with identifying, evaluating and negotiating potential strategic alternatives.]

Until the review process is concluded, perceived uncertainties related to our future may result in the loss of potential business [removed: opportunities and] [added: opportunities,] volatility in the market price of our common stock and [removed: may make it more difficult for us to attract] [added: difficulty attracting] and [removed: retain] [added: retaining] qualified [removed: personnel] [added: talent] and business partners.

Similarly, [removed: other] activist investors may engage in proxy solicitations or advance shareholder proposals, or otherwise attempt to affect changes and assert influence on our Board and management, which could lead to the impacts on our business, board, management and employees discussed above.

Over-investment by us or our competitors could result in excess supply, which could cause significant decreases in our product prices, significant excess, obsolete inventory or inventory write-downs or [removed: under-utilization] [added: underutilization] charges, and the potential impairment of our investments in Flash Ventures.

Lack of alignment with Kioxia with respect to Flash Ventures could negatively impact our ability to [added: react quickly to changes in the market, or to] stay at the forefront of technological advancement.

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

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- policies and financial incentives by governments in China, the United States, and countries in Europe and Asia designed to reduce dependence on foreign semiconductor manufacturing capabilities;

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We have cancelled or deferred and may continue to cancel or defer outstanding purchase commitments with certain suppliers due to changes in actual and forecasted demand, which has resulted, and may continue to result in fees, penalties and other associated charges.

Such cancellations or deferments can also negatively impact our relationships with certain suppliers or lead to a decline in the financial performance of certain suppliers, each of which could result in even more limited availability of components needed for our products.

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negatively affects any of these facilities, it would significantly affect our ability to manufacture or sell our products and source components and would harm our business.

Our success depends upon the continued contributions of our talent.

For example, an unauthorized third party gained access to a number of our systems in March 2023, which caused disruption to parts of our business operations and resulted in various investigation, recovery, and remediation expenses.

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Our cloud services have in the past and may in the future be taken offline as a result of or in order to prevent or mitigate cyber incidents.

For example, as a result of a network security incident in March 2023, an unauthorized party obtained a copy of a Western Digital database used for our online store that contained some personal information of our online store customers.

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business, ownership or corporate structure.

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margin, thereby negatively affecting our operating results and our financial condition.

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Further, if we are unable to repay, refinance or restructure our secured indebtedness, the holder of such debt could proceed against the collateral securing the indebtedness.

Further, the majority of countries in the G20 and Organization for Economic Cooperation and Development (OECD) Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have agreed to adopt a two-pillar approach to taxation, which includes the implementation of a global corporate minimum tax rate of 15%, which when effective could materially increase our tax obligations in these countries.

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applicable tax authority in order to resolve examination of our tax positions, which could result in an increase of our current estimate of unrecognized tax benefits and may harm our business.

Our possession and use of third-party data, including personal data and

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Our aspirations, disclosures, and actions related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.

There is an increased focus from investors, customers, associates, business partners and other stakeholders concerning ESG matters, and we announce initiatives and goals related to ESG matters from time to time, including renewable energy and net zero emissions commitments.

These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control, including the availability and cost of alternative energy sources; the evolving regulatory and reporting requirements affecting ESG practices and disclosures; the locations and usage of our products and the implications on their greenhouse gas emissions; and the successful execution of our strategy.

Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, and the potential added costs involved, could adversely affect our reputation; financial performance and growth; our ability to attract or retain talent; and our attractiveness as a business partner or supplier, and could expose us to increased litigation risk, as well as increased scrutiny from the investment community and enforcement authorities.

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While our manufacturing facilities and those used by Flash Ventures are all currently operational, we have experienced and may experience in the future temporary closures of certain manufacturing facilities related to the pandemic.

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

Our success depends upon the continued contributions of our key management, staff and skilled employees, many of whom would be extremely difficult to replace.

Further, our products contain sophisticated

In conjunction with that review process, the Company announced that it had entered into a letter agreement with Elliott Investment Management L.P. (“Elliott”), which had disclosed in May 2022 a $1 billion investment in our Company and called for a full strategic review of our business.

expenses associated with identifying, evaluating and negotiating potential strategic alternatives.

In order to pursue this part of our growth strategy successfully, we must

financial strength, operating performance and ability to meet our debt obligations.

Further, organizations such as the Organization for Economic Cooperation and Development, have published action plans that, if adopted by countries where we do business, could increase our tax obligations in these countries.

rates, most notably the strengthening of the U.S. dollar against other foreign currencies, contribute to variations in sales of products in impacted jurisdictions and could negatively impact demand and revenue growth.

We are a leading developer, manufacturer, and provider of data storage devices based on both [removed: flash-based products (“Flash”)] [added: NAND flash] and hard disk [removed: drives (“HDD”)] [added: drive] technologies.

Our broad portfolio of technology and products address [added: our] multiple end [removed: markets.][added: markets: “Cloud”, “Client” and “Consumer”.]

Fiscal years [removed: 2022] [added: 2023, 2022,] and 2021, which ended on [added: June 30, 2023,] July 1, [removed: 2022] [added: 2022,] and July 2, 2021, respectively, [removed: are] [added: each] comprised [removed: of] 52 weeks, with all quarters presented consisting of 13 weeks.

[removed: *Business Structure and Strategic] [added: *Strategic] Alternatives*

[removed: We] [added: As of June 30, 2023, we] are [added: still] actively working with financial advisors and our legal counsel in this strategic review process.

As [removed: previously disclosed,] [added: disclosed in previous periods,] we have received statutory notices of deficiency and notices of proposed adjustments from the Internal Revenue Service (“IRS”) with respect to 2008 through 2015.

Additional information is provided in our discussion of Income tax expense in our results of operations below, as well as in Part [removed: I,] [added: II,] Item [removed: 1,] [added: 8,] Note 14, *Income Tax Expense*, of the Notes to the Consolidated Financial Statements, and in the “Short- and Long-Term [removed: Liquidity\-Unrecognized] [added: Liquidity \- Unrecognized] Tax Benefits” section below.

Additional information regarding our indebtedness, including the principal repayment terms, interest rates, covenants and other key terms of our outstanding indebtedness, [added: and additional information on the terms of our convertible preferred shares] is included in Part II, Item 8, Note 8, [removed: *Debt,*] [added: *Debt*, and Note 13, *Shareholders’ Equity and Convertible Preferred Stock*,] of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

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

See 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 [removed: the COVID-19 pandemic,] [added: macroeconomic conditions, and] supply chain [removed: disruptions and current macroeconomic conditions.][added: disruptions.]

*Summary Comparison of [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020*][added: 2021*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | | | |

| Revenue, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 18,793] [added: 12,318] | | | | | 100.0 | | % | | | | $ | [removed: 16,922] [added: 18,793] | | | | | 100.0 | | % | | | | | | | | | | $ | [removed: 16,736] [added: 16,922] | | | | | 100.0 | | % |

| Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 12,919] [added: 10,431] | | | | | | [removed: 68.7] [added: 84.7] | | | | | | [removed: 12,401] [added: 12,919] | | | | | | [removed: 73.3] [added: 68.7] | | | | | | | | | | | | [removed: 12,955] [added: 12,401] | | | | | | [removed: 77.4] [added: 73.3] | | |

| Gross profit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 5,874] [added: 1,887] | | | | | | [removed: 31.3] [added: 15.3] | | | | | | [removed: 4,521] [added: 5,874] | | | | | | [removed: 26.7] [added: 31.3] | | | | | | | | | | | | [removed: 3,781] [added: 4,521] | | | | | | [removed: 22.6] [added: 26.7] | | |

| Research and development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,323] [added: 2,009] | | | | | | [removed: 12.4] [added: 16.3] | | | | | | [removed: 2,243] [added: 2,323] | | | | | | [removed: 13.3] [added: 12.4] | | | | | | | | | | | | [removed: 2,261] [added: 2,243] | | | | | | [removed: 13.5] [added: 13.3] | | |

| Selling, general and administrative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,117] [added: 970] | | | | | | [removed: 5.9] [added: 7.9] | | | | | | [removed: 1,105] [added: 1,117] | | | | | | [removed: 6.5] [added: 5.9] | | | | | | | | | | | | [removed: 1,153] [added: 1,105] | | | | | | [removed: 6.9] [added: 6.5] | | |

| Employee termination, asset impairment, and other charges | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 43] [added: 193] | | | | | | [removed: 0.2] [added: 1.6] | | | | | | [removed: (47)] [added: 43] | | | | | | [removed: (0.3)] [added: 0.2] | | | | | | | | | | | | [removed: 32] [added: (47)] | | | | | | [removed: 0.2] [added: (0.3)] | | |

| Total operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,483] [added: 3,172] | | | | | | [removed: 18.5] [added: 25.8] | | | | | | [removed: 3,301] [added: 3,483] | | | | | | [removed: 19.5] [added: 18.5] | | | | | | | | | | | | [removed: 3,446] [added: 3,301] | | | | | | [removed: 20.6] [added: 19.5] | | |

| Operating income [added: (loss)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,391] [added: (1,285)] | | | | | | [removed: 12.7] [added: (10.4)] | | | | | | [removed: 1,220] [added: 2,391] | | | | | | [removed: 7.2] [added: 12.7] | | | | | | | | | | | | [removed: 335] [added: 1,220] | | | | | | [removed: 2.0] [added: 7.2] | | |

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

| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 6] [added: 24] | | | | | | [removed: —] [added: 0.2] | | | | | | [removed: 7] [added: 6] | | | | | | — | | | | | | | | | | | | [removed: 28] [added: 7] | | | | | | [removed: 0.2] [added: —] | | |

| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (304)] [added: (312)] | | | | | | [removed: (1.6)] [added: (2.5)] | | | | | | [removed: (326)] [added: (304)] | | | | | | [removed: (1.9)] [added: (1.6)] | | | | | | | | | | | | [removed: (413)] [added: (326)] | | | | | | [removed: (2.5)] [added: (1.9)] | | |

| Other income, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 30] [added: 13] | | | | | | [removed: 0.2] [added: 0.1] | | | | | | [removed: 26] [added: 30] | | | | | | 0.2 | | | | | | | | | | | | [removed: 4] [added: 26] | | | | | | [removed: —] [added: 0.2] | | |

| Total interest and other [removed: expense,] [added: income,] net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (268)] [added: (275)] | | | | | | [removed: (1.4)] [added: (2.2)] | | | | | | [removed: (293)] [added: (268)] | | | | | | [removed: (1.7)] [added: (1.4)] | | | | | | | | | | | | [removed: (381)] [added: (293)] | | | | | | [removed: (2.3)] [added: (1.7)] | | |

| Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2,123] [added: (1,560)] | | | | | | [removed: 11.3] [added: (12.7)] | | | | | | [removed: 927] [added: 2,123] | | | | | | [removed: 5.5] [added: 11.3] | | | | | | | | | | | | [removed: (46)] [added: 927] | | | | | | [removed: (0.3)] [added: 5.5] | | |

| Income tax expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 623] [added: 146] | | | | | | [removed: 3.3] [added: 1.2] | | | | | | [removed: 106] [added: 623] | | | | | | [removed: 0.6] [added: 3.3] | | | | | | | | | | | | [removed: 204] [added: 106] | | | | | | [removed: 1.2] [added: 0.6] | | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: $] [added: (1,706)] | [removed: 1,500] | | | | | [removed: 8.0] [added: (13.8)] | | [removed: %] | | | | [removed: $] [added: 1,500] | [removed: 821] | | | | | [removed: 4.9] [added: 8.0] | | [removed: %] | | | | | | | | | | [removed: $] [added: 821] | [removed: (250)] | | | | | [removed: (1.5)] [added: 4.9] | | [removed: %] |

[removed: (1) Percentages] [added: (1)Percentage] may not total due to rounding.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Flash | | | $ | [removed: 9,753] [added: 6,063] | | | | | $ | [removed: 8,706] [added: 9,753] | | | | | $ | [removed: 7,769] [added: 8,706] | |

| HDD | | | [removed: 9,040] [added: 6,255] | | | | | | [removed: 8,216] [added: 9,040] | | | | | | [removed: 8,967] [added: 8,216] | | |

| Total net revenue | | | $ | [removed: 18,793] [added: 12,318] | | | | | $ | [removed: 16,922] [added: 18,793] | | | | | $ | [removed: 16,736] [added: 16,922] | |

| Flash | | | $ | [removed: 3,527] [added: 433] | | | | | $ | [removed: 2,611] [added: 3,527] | | | | | $ | [removed: 1,903] [added: 2,611] | |

| HDD | | | [removed: 2,661] [added: 1,505] | | | | | | [removed: 2,221] [added: 2,661] | | | | | | [removed: 2,602] [added: 2,221] | | |

| Amortization of acquired intangible assets | | | [removed: (66)] [added: —] | | | | | | [removed: (331)] [added: (66)] | | | | | | [removed: (610)] [added: (331)] | | |

| Stock-based compensation expense | | | [removed: (48)] [added: (49)] | | | | | | [removed: (55)] [added: (48)] | | | | | | [removed: (51)] [added: (55)] | | |

| Contamination related charges | | | [removed: (207)] [added: —] | | | | | | [removed: —] [added: (207)] | | | | | | — | | |

| Recoveries from a power outage incident | | | [removed: 7] [added: —] | | | | | | [removed: 75] [added: 7] | | | | | | [removed: (68)] [added: 75] | | |

| Other | | | [removed: —] [added: (2)] | | | | | | — | | | | | | [removed: 5] [added: —] | | |

With dedicated flash-based products (“Flash”) and hard disk drives (“HDD”) business units driving advancements in storage technologies, our broad and ever-expanding portfolio delivers powerful Flash and HDD storage solutions for everyone from students, gamers, and home offices to the largest enterprises and public clouds to capture, preserve, access, and transform an ever-increasing diversity of data.

*Network Security Incident*

As previously disclosed, on March 26, 2023, we identified a network security incident in which an unauthorized third party gained access to a number of our systems.

Upon discovery of the incident, we implemented incident response efforts, which included taking various systems and services offline as a proactive measure to secure our business operations and initiating an investigation with the assistance of leading outside security and forensic experts.

In collaboration with outside forensic experts, we confirmed that an unauthorized party obtained a copy of a Western Digital database used for our online store that contained some personal information of our online store customers.

This information included customer names, billing and shipping addresses, email addresses and telephone numbers.

In addition, the database contained, in encrypted format, hashed and salted passwords and partial credit card numbers.

We have provided notifications to impacted customers and relevant governmental authorities.

The incident, together with the incident response efforts discussed above, resulted in some disruptions to our business operations, including manufacturing, sales, fulfillment and general corporate activities.

We were able to stabilize core operations after a short period of time and brought impacted systems back online in order of operational priority.

The incident did not have a material impact on the financial results in 2023.

Investigation, recovery, and remediation expenses, including costs for forensics activities, third-party consulting and service providers, outside legal advisors, and other IT professionals, as a result of the network security incident were not material to the Consolidated Financial Statements.

We maintain cyber insurance, subject to certain deductibles and policy limitations, typical for our size and industry.

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During the third quarter of 2023, we and the IRS reached an agreement on the federal tax and interest calculations with respect to the years 2008 through 2012 and a tentative settlement for the years 2013 through 2015.

In December 2022 and in June 2023, we amended the loan agreement governing our Term Loan A-2 and revolving credit facility to provide additional financial flexibility as we navigate through the current dynamic economic environment.

The amendments modified our financial covenant requirements, including modifying the leverage ratio requirements, and introducing a minimum liquidity covenant applicable through the quarter ending September 27, 2024 and a minimum free cash flow requirement applicable through the quarter ending December 29, 2023.

The amendment also accelerates the due date for amounts outstanding under the loan agreement from January 7, 2027 to November 2, 2023 if, as of that date, our cash and cash equivalents plus available unused capacity under our credit facilities do not exceed by $1.40 billion the sum of the outstanding balance of our 1.50% convertible notes due 2024 plus the outstanding principal amount of any other debt maturing within twelve months.

In January 2023, we entered into a new delayed draw term loan agreement, which was then amended in June 2023.

As amended, the agreement allowed us to draw a loan of up to $600 million which we exercised in full in August 2023 (the “Delayed Draw Term Loan”).

Borrowings on this loan will mature on June 28, 2024 or such earlier date that conditions for acceleration of amounts due under the loan agreement governing our Term Loan A-2 and revolving credit facility have been triggered as described above.

Also in January, 2023, we issued an aggregate of 900,000 shares of Series A Preferred Stock for an aggregate purchase price of $900 million.

We believe these transactions will provide us with greater financial flexibility to manage our business.

Macroeconomic factors such as inflation, higher interest rates and recession concerns have softened demand for our products, with certain customers reducing purchases as they adjust their production levels and right-size their inventories.

As a result, we and our industry are experiencing a supply-demand imbalance, which has resulted in reduced shipments and negatively impacted pricing, particularly in Flash.

While supply-demand imbalance has somewhat stabilized beginning in the third quarter of 2023, particularly in Client and Consumer, we continue to face a dynamic market environment.

To adapt to these conditions, since the beginning of 2023, we have scaled back on capital expenditures, consolidated production lines and reduced bit growth to align with market demand and implemented measures to reduce operating expenses.

This has resulted in incremental charges for employee termination, asset impairment and other charges and manufacturing underutilization charges in Flash and HDD in 2023, and is expected to impact near-term results.

However, we believe digital transformation will continue to drive long-term growth for data storage in both Flash and HDD and believe that the actions we are taking will position us to capitalize on market conditions when they improve to address long-term growth opportunities in data storage across all our end markets.

We will continue to actively monitor developments impacting our business and may take additional responsive actions that we determine to be in the best interest of our business and stakeholders.

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Our new industry-leading 22-terabyte conventional magnetic recording drives and 26-terabyte shingled magnetic recording drives, utilizing OptiNAND technology, have commenced commercial shipments.

We also have commenced product sampling of our latest 28-terabyte Ultra SMR drive, which built upon proven ePMR and UltraSMR technology, with full feature and performance compatibility, as well as the reliability trusted by our customers worldwide.

During 2023, we announced BiCS8 node, the newest 3D-flash memory technology based on a chip-bonded-to-array architecture.

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| Less: cumulative dividends allocated to preferred shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24 | | | | | | 0.2 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |

| Net income (loss) attributable to common shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (1,730) | | | | | (14.0) | | % | | | | $ | 1,500 | | | | | 8.0 | | % | | | | | | | | | | $ | 821 | | | | | 4.9 | | % |

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Net revenue decreased 34% in 2023 compared to 2022, primarily reflecting the supply-demand imbalance and macroeconomic pressures described in the “Operational Update” above.

Flash revenue decreased 38% in 2023 compared to 2022, substantially all driven by a decline in the average selling prices per gigabyte across all our end markets.

With dedicated business units driving advancements in NAND flash and magnetic recording technologies, we create and drive innovations needed to help customers capture, preserve, access, and transform an ever-increasing diversity of data.

In 2022, we refined the end markets we report to be “Cloud”, “Client” and “Consumer”.

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

In 2021, we made and announced the decision to reorganize our business by forming two separate product business units: Flash and 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.

To align with the new operating model and business structure, we made management organizational changes and implemented new reporting modules and processes to provide discrete information to manage the business.

Effective July 3, 2021, management finalized its assessment of our operating segments and concluded that we now have two reportable segments: Flash and HDD.

In conjunction with that review process, we announced that we had entered into a letter agreement with Elliott Investment Management L.P. (“Elliott”), which had disclosed in May 2022 a $1 billion investment in our Company and called for a full strategic review of our business.

During 2022, new information became available which required us to re-measure our unrecognized tax benefits for this IRS matter.

We and the IRS tentatively reached a settlement for resolving this matter.

*Flash Ventures Contamination Incident*

In February 2022, contamination of certain material used in manufacturing processes occurred at Flash Ventures’ fabrication facilities in both Yokkaichi and Kitakami, Japan which resulted in damage to inventory units in production, a temporary disruption to production operations and a reduction in our flash wafer availability.

During 2022, we incurred charges of $207 million related to this contamination incident that were recorded in cost of revenue and primarily consisted of scrapped inventory and rework costs, decontamination and other costs needed to restore the facilities to normal capacity, and under absorption of overhead costs.

We are evaluating potential options for recovery.

During 2022, we continued to execute on our commitment to reduce our overall debt levels and Fitch Ratings, Inc. raised our Company credit rating to investment grade in December 2021.

We fully repaid our Term Loan B-4 in October 2021 and shortly thereafter initiated a series of transactions to further reduce our debt levels and better stagger the maturities of our debt.

In December 2021, we issued $500 million aggregate principal amount of 2.850% senior unsecured notes due February 1, 2029 (the “2029 Notes”) and we issued $500 million aggregate principal amount of 3.100% senior unsecured notes due February 1, 2032 (the “2032 Notes”).

We used the proceeds from these note offerings and available cash to voluntarily repay $1.21 billion of our Term Loan A-1 and reduce the principal amount to $3.0 billion as of December 31, 2021.

In January 2022, we amended and restated our existing loan agreement to provide for, among other things: (i) the issuance of a new $3.0 billion Term Loan A-2 maturing in January 2027 to replace our previously existing Term Loan A-1; (ii) the availability of a new $2.25 billion revolving credit facility maturing in January 2027 to replace our previously existing $2.25 billion revolving credit facility; and (iii) additional covenant flexibility and other modifications.

As of July 1, 2022, over 80% of the principal amount of our debt is now due in 2026 or later.

We believe this new debt structure gives us greater financial stability and flexibility to manage our business over the longer term.

*New Flash Ventures Fabrication Facility*

In January 2022, we entered into additional agreements regarding Flash Ventures’ investment in a new wafer fabrication facility currently under construction in Yokkaichi, Japan, referred to as “Y7”.

The primary purpose of Y7 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes.

The first phase of construction of Y7 is complete and output is expected to commence in the first half of 2023.

We are committed to pay, among other items, future building depreciation prepayments of approximately $268 million in 2023 and $22 million in 2024, to be credited against future wafer charges.

As the ongoing COVID-19 pandemic has evolved, we have implemented and maintained more thorough sanitation practices as outlined by health organizations and supported vaccination efforts.

We continually monitor and update our practices based on recommendations from 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 contributed to the increases in the costs of their services, which have in turn impacted our operations.

We incurred incremental charges primarily related to logistics, absorption, and other factory-related costs of approximately $248 million and $127 million, during 2022 and 2021, respectively, which were recorded in Cost of revenue.

The technology hardware and semiconductor industries faced supply chain disruptions and component shortages during 2022, which negatively impacted both our customers’ ability to ship products and our ability to build products.

In order to meet our end customers’ demand, we are incurring increased component costs, which primarily impacted our hard drive gross margins in 2022.

Additionally, the global economy has recently experienced significant volatility and disruptions impacted by increases in inflation rates, Russia’s invasion of Ukraine and rising fuel prices, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.

We are seeing our PC OEM customers aggressively right-size their inventory to reflect current demand conditions, which will impact our business in this market in the second half of the calendar year.

While we ultimately expect that the impact of these conditions will be transitory, the severity and duration of the impact of these conditions on our business is dynamic and cannot be predicted.

Our BiCS5 based products continue to play a significant role in driving top line results across our end markets as we move further along the product roadmap.

Additionally, OptiNAND and shingled magnetic recording (“SMR”) technologies are progressing as planned as we have commenced commercial shipments on a number of OptiNand-based products and are undergoing qualifications of our latest 26-terabyte SMR drive.

For our next generation 3D-flash technology, we continued commercial shipment of consumer flash devices based on our 162-layer BiCS6 technology as we expect to start ramping the technology towards the end of calendar year 2022.

We are also aware of the ongoing trends in the HDD Client market as PCs shift from using HDD to Flash technology.

As a result, we have and are still undergoing actions to restructure our HDD manufacturing footprint to reflect this market dynamic.

Therefore, we have performed sensitivity analyses for [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] 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 [removed: July 1, 2022] [added: June 30, 2023] and July [removed: 2, 2021.][added: 1, 2022.]

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: $306] [added: $285] million and [removed: $183] [added: $306] million at [removed: July 1, 2022] [added: June 30, 2023] and July [removed: 2, 2021,] [added: 1, 2022,] respectively.

During [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.

As of [removed: July 2, 2022,] [added: June 30, 2023,] our only variable rate debt outstanding was our Term Loan A-2 Loan, which bears interest, at the Company’s option, at a per annum rate equal to either (x) the Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Loan Agreement) plus an applicable margin varying from 1.125% to 2.000% or (y) a base rate plus an applicable margin varying from 0.125% to 1.000%, in each case depending on the corporate family ratings of the Company from at least two of Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc. and Fitch Ratings, Inc., with an initial interest rate of Adjusted Term SOFR plus 1.375%.

As of [removed: July 1, 2022,] [added: June 30, 2023, the outstanding balance on our Term Loan A-2 was $2.70 billion and] a one percent increase in the variable rate of interest would increase annual interest expense by $27 million.

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As of July 1, 2022, we had reduced the amount of variable rate debt to $2.70 billion from $5.43 billion as of July 2, 2021.

We currently have pay-fixed interest rate swaps of $2.0 billion notional amount, which would mitigate the impact of fluctuations in variable interest rates noted above through February 2023.

We are a leading developer, manufacturer, and provider of data storage devices [added: and solutions] based on both [removed: flash-based products (“Flash”)] [added: NAND flash] and hard disk [removed: drives (“HDD”)] [added: drive] technologies.

We have one of the technology industry’s most valuable patent portfolios with approximately [removed: 13,500] [added: 13,000] active patents worldwide.

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

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

With much of the world’s data stored on Western Digital products, our innovation powers the global technology ecosystem from consumer devices to the [removed: edge] [added: edge,] to the heart of the cloud.

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

We help [removed: original equipment manufacturers (“OEM”)] [added: OEMs] address storage opportunities and solutions to capture and transform data in a myriad of devices and edge technologies.

There is tremendous market opportunity flowing from the rapid global adoption of the technology architecture built with cloud infrastructure tied to intelligent endpoints all connected by [removed: high performance] [added: high-performance] networks.

The value and urgency of data storage at every point across this architecture [removed: has] [added: have] never been clearer.

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

This growth has led to [removed: a] [added: the] creation of new form factors for data storage.

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

In Flash, we compete with vertically integrated suppliers such as Kioxia, Micron Technology, Inc., Samsung Electronics Co., Ltd., SK hynix, Inc., [removed: Solidigm,] Yangtze Memory Technologies Co., Ltd. and numerous smaller companies that assemble flash into products.

In HDD, we compete with Seagate Technology [added: Holdings] plc and Toshiba Electronic Devices & Storage Corporation.

- efficient and flexible manufacturing capabilities, allowing us to leverage our Flash and HDD R&D and capital expenditures to deliver innovative and cost-effective storage solutions to multiple markets; [removed: and]

- deep relationships with industry leaders across the data ecosystems that give us the broadest routes to [removed: market.][added: market; and]

We devote significant research and development resources to the development of highly reliable, high-performance, cost-effective flash-based technology and are [added: continually] pursuing developments in [removed: next generation] [added: next-generation] flash-based technology capacities.

We have also initiated, defined and developed standards to meet new market needs and to promote wide acceptance of flash storage standards through interoperability and [removed: ease-of-use.][added: ease of use.]

Our multi-year product roadmap for high-capacity HDD, which combine ePMR, OptiNAND, UltraSMR and triple stage actuators to deliver a [removed: cutting edge] [added: cutting-edge] portfolio of drives, in commercial volumes, at a wide variety of capacity points, puts Western Digital in [removed: great] [added: a strong] position to capitalize on the opportunities presented by the large and growing storage [removed: markets We invest considerable resources in R&D, manufacturing infrastructure and capital equipment for recording head and media technology, as well as other aspects of the magnetic recording system such as HDD mechanics, controller and firmware technology, in order to secure our competitive position and cost structure.][added: markets.]

Our broad portfolio of technology and products address multiple end markets [added: of “Cloud”, “Client”] and [added: “Consumer” and] are comprised of the Western Digital®, SanDisk® and [removed: WD brands®.][added: WD® brands.]

Our capacity enterprise [removed: helium] hard drives provide high-capacity storage needs and [added: a] low total cost of ownership per [removed: GB] [added: gigabyte] for the growing cloud data center [removed: market.][added: and smart video system markets.]

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

Through the Client end market, we provide our [removed: OEM] [added: original equipment manufacturer (“OEM”)] and channel customers a broad array of high-performance flash and hard drive solutions across personal [removed: computer (“PC”),] [added: computer,] mobile, [removed: gaming consoles,] [added: gaming,] automotive, virtual reality headsets, at-home entertainment, and industrial spaces.

[removed: We] [added: Through the Client end market, we] provide numerous data solutions that we incorporate into our client’s devices, which consist of HDD and SSD desktop and notebook PCs, [removed: smart video systems,] gaming consoles and set top boxes, as well as flash-based embedded storage products for mobile phones, tablets, notebook PCs and other portable and wearable devices, automotive applications, Internet of Things, industrial and connected home applications.

[removed: We provide] [added: The Consumer end market provides] consumers with a portfolio of HDD and SSD embedded into external storage products and removable Flash, which include cards, universal serial bus (“USB”) flash drives and wireless drives, through our retail and channel routes to market.

Our wireless drive products allow in-field [removed: back up] [added: backup] of created content, as well as wireless streaming of high-definition movies, photos, music and documents to tablets, smartphones and PCs.

For a discussion of [removed: associated] [added: such] risks, see Part I, Item 1A, *Risk Factors*, of this Annual Report on Form 10-K.

We have approximately [removed: 13,500] [added: 13,000] active patents worldwide and have many patent applications in process.

We believe that we have significant know-how, unique product manufacturing processes, test and tooling, execution skills, human resources and training to continue to be successful and to [removed: grow] [added: adjust] our manufacturing operations as necessary.

The critical elements of our production of Flash and HDD are [removed: high-volume] [added: high volume] and utilization, low-cost assembly and testing, strict adherence to quality metrics and maintaining close relationships with our strategic component suppliers to access best-in-class technology and manufacturing capacity.

For example, we [removed: are taking] [added: have taken] aggressive actions to restructure our client HDD manufacturing footprint in light of ongoing trends in the HDD Client market as PCs shift from using HDD to Flash technology.

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

Each Flash Venture entity purchases wafers from Kioxia at cost and then resells those wafers to us and Kioxia at cost plus a small [removed: mark-up.][added: markup.]

The Yokkaichi site, which is owned and operated by Kioxia, currently includes [removed: five] [added: six] wafer fabrication facilities.

We also have agreements that extend Flash Ventures to a wafer fabrication facility located in Kitakami, Japan, referred to as “K1”, which is operated by Kioxia Iwate Corporation, a [removed: wholly owned] [added: wholly-owned] subsidiary of Kioxia.

In January 2022, we entered into [removed: additional] agreements regarding Flash Ventures’ investment in a new wafer fabrication facility [removed: currently under construction] in Yokkaichi, Japan, referred to as “Y7”, which [removed: upon completion will be] [added: is] the sixth wafer fabrication facility at the Yokkaichi site.

The first phase of construction of Y7 is [added: now] complete and [removed: output is expected to commence in the first half of 2023.][added: has commenced output.]

We have developed deep relationships with these vendors and Kioxia to establish [added: a] continuous supply of flash-based memory and controllers.

We generally retain multiple suppliers for our component [removed: requirements but,] [added: requirements, but] for business or technology reasons, we source some of our components from a limited number of sole or single source providers.

Our international sales, which include sales to foreign subsidiaries of U.S. companies but do not include sales to U.S. subsidiaries of foreign companies, represented [removed: 71%, 78%] [added: 69%, 71%] and [removed: 72%] [added: 78%] of our net revenue for [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

With dedicated flash-based products (“Flash”) and hard disk drives (“HDD”) business units driving advancements in storage technologies, our broad and ever-expanding portfolio delivers powerful Flash and HDD storage solutions for everyone from students, gamers, and home offices, to the largest enterprises and public clouds to capture, preserve, access, and transform an ever-increasing diversity of data.

Our broad portfolio of technology and products in Flash and HDD address multiple end markets of “Cloud”, “Client” and “Consumer.”

Cloud is comprised primarily of products for public or private cloud environments and end customers, which we believe we are uniquely positioned to address as the only provider of both Flash and HDD.

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We invest considerable resources in R&D, manufacturing infrastructure and capital equipment for recording head and media technology, as well as other aspects of the magnetic recording system such as HDD mechanics, controller and firmware technology, in order to secure our competitive position and cost structure.

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- industry leading consumer brand awareness and global retail distribution presence.

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In order to support our company’s strategy, a continued emphasis on talent is required.

Despite the current industry headwinds, we continue to focus on attracting, developing, engaging and retaining the best talent for our company.

At the end of 2023, we employed approximately 53,000 people worldwide.

We have a number of initiatives that focus on increasing our diverse representation, including our new college graduate recruitment and hiring programs as well as veteran hiring and training programs.

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In the coming year, we plan to further our pay equity efforts by engaging in a living wage analysis.

In 2023, we continued our multi-year journey to modernize and improve our benefits portfolio with the goal of offering more choice to meet the unique needs of our diverse employees.

We continued our skills-based screening to hire employees based on capabilities and potential as well as our anonymous hiring pilot to identify and remove any potential for bias from our hiring process for interns.

Additionally, we revamped our event experience by focusing on career fairs and conferences.

Fostering the next generation of talent continues to be a key priority, and in 2023 we increased our U.S. intern conversion rate by over 40 percentage points.

We are also a corporate sponsor for the Quad Fellowship by Schmidt Futures, which aims to “empower exceptional engineering, mathematics, science, and technology graduate students to advance research and innovation with a lens of positive social impact.”

To equip employees with the skills needed to build resilience and manage the economic uncertainty, we shifted our focus to address critical capabilities in real-time.

Alongside our flagship program Leader Essentials, we introduced self-directed development modules to help employees at all levels cultivate skills such as how to navigate dynamic times, have a learning mindset, seek insights and communicate effectively.

We were recognized by Fast Company as one of the 10 most innovative companies in manufacturing in calendar year 2023 for upskilling 42% of our workforce at our Penang, Malaysia facility while working towards our sustainability goals.

In 2023, 32% of our employees participated in a company-sponsored volunteer event, which was bolstered by a 27-percentage point increase in participation among our factory worker population.

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With dedicated business units driving advancements in NAND flash and magnetic recording technologies, we create and drive innovations needed to help customers capture, preserve, access, and transform an ever-increasing diversity of data.

In 2022, we refined the end markets we report to be “Cloud”, “Client” and “Consumer”.

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.

K1 is now fully operational.

We have been on a journey to transform the Company and redefine the data storage market.

Our employees are paramount to our success.

To this end, our people strategy is grounded in the intention to hire, engage and retain the best talent to support our vision of creating breakthrough innovation that enables the world to actualize its aspirations.

In 2022, we hired a new Chief People Officer to help accelerate the transformation of our human resources function to be more people-centric and to drive better outcomes for the business.

We employ approximately 65,000 people worldwide, and our diverse team spans 38 countries.

We want to leverage the power and potential of diversity.

In 2022, we were once again recognized by Human Rights Campaign Best Places to Work for LGBTQ+ Equality 2022.

We also received the Above and Beyond Award and the Pro Patria Award from the Employer Support of the Guard and Reserve for our support of employees who serve in the U.S. National Guard and Reserve.

We believe that developing a diverse talent pool of new college graduates is essential, and we saw percentage point increases of 2.5 for women, 1.4 for Hispanic/Latinx and 1.0 for multiracial representation among our new college graduates in 2022.

In response to employee input in 2022, we expanded benefit access for our employees to caregivers and enhanced behavioral health benefits for dependent children in the U.S.; enhanced medical coverage in our larger countries; and offered flexible benefits in India.

We need a workforce that is as unique and diverse as our customer base, and it starts with talent attraction.

To increase the talent level of our diverse candidate pools, we adopted a skills-based philosophy that screens and hires employees based on capabilities and potential, and we plan to continue the implementation of these practices in 2023.

In the last year, we conducted an anonymous hiring pilot to identify and remove any potential for bias from our hiring process and broaden our diverse talent pool and tested technology to make sure that job descriptions utilize inclusive language.

We also deliver unconscious bias training to leaders equipping them to lead inclusively and identify unconscious bias.

We are investing in leadership development through our flagship program Leader Essentials to help people at all levels cultivate skills such as effective communication, creating an inclusive culture and building effective relationships.

We also continue to develop the next generation of talent with our New College Grad program.

In 2022, we had an overall employee survey participation rate of 90%.

Key strengths that employees identified were that they felt that their work was meaningful, they are excited about our future, and they would recommend their manager to others.

Furthermore, in response to the ongoing COVID-19 pandemic, we continue to practice our global resiliency plans, which have allowed us to maintain 24/7 operations.

At each global Western Digital site, we have local, cross-functional teams responsible for our efforts to meet or exceed local COVID regulations, including providing real-time data to leaders, implementing changes to our physical workplaces and providing robust employee and family benefits to those impacted by COVID.

We have welcomed employees who transitioned to working from home during the pandemic back to the office and have offered a flexible hybrid work model for certain employees.

Compliance with these laws, rules, and regulations has not had a material effect upon our capital expenditures, results of operations, or competitive position.

For the fiscal year ended [removed: July 1, 2022][added: June 30, 2023]

[removed: ][added: ]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on December [removed: 31, 2021,] [added: 30, 2022,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $17.0] [added: $7.73] billion, based on the closing sale price as reported on the Nasdaq Global Select Market.

There were [removed: 314,492,541] [added: 321,895,961] shares of common stock, par value $0.01 per share, outstanding as of the close of business on August [removed: 11, 2022.][added: 4, 2023.]

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the [removed: 2022] [added: 2023] fiscal year.

| Item 1. | | | Business | | | [removed: [4](#i9617800d5f64449f8d30837090e9701a_19)] [added: [4](#i81392b4a1d0e495bb45df4a99b7c7393_19)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [11](#i9617800d5f64449f8d30837090e9701a_22)] [added: [11](#i81392b4a1d0e495bb45df4a99b7c7393_22)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [25](#i9617800d5f64449f8d30837090e9701a_25)] [added: [26](#i81392b4a1d0e495bb45df4a99b7c7393_25)] | | |

| Item 2. | | | Properties | | | [removed: [26](#i9617800d5f64449f8d30837090e9701a_28)] [added: [27](#i81392b4a1d0e495bb45df4a99b7c7393_28)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [28](#i9617800d5f64449f8d30837090e9701a_34)] [added: [29](#i81392b4a1d0e495bb45df4a99b7c7393_34)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [28](#i9617800d5f64449f8d30837090e9701a_34)] [added: [29](#i81392b4a1d0e495bb45df4a99b7c7393_34)] | | |

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [29](#i9617800d5f64449f8d30837090e9701a_43)] [added: [30](#i81392b4a1d0e495bb45df4a99b7c7393_43)] | | |

| Item 6. | | | \[Reserved\] | | | [removed: [31](#i9617800d5f64449f8d30837090e9701a_49)] [added: [32](#i81392b4a1d0e495bb45df4a99b7c7393_49)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [32](#i9617800d5f64449f8d30837090e9701a_52)] [added: [33](#i81392b4a1d0e495bb45df4a99b7c7393_52)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [46](#i9617800d5f64449f8d30837090e9701a_88)] [added: [48](#i81392b4a1d0e495bb45df4a99b7c7393_88)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [47](#i9617800d5f64449f8d30837090e9701a_94)] [added: [49](#i81392b4a1d0e495bb45df4a99b7c7393_94)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [103](#i9617800d5f64449f8d30837090e9701a_217)] [added: [107](#i81392b4a1d0e495bb45df4a99b7c7393_211)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [103](#i9617800d5f64449f8d30837090e9701a_220)] [added: [107](#i81392b4a1d0e495bb45df4a99b7c7393_214)] | | |

| Item 9B. | | | Other Information | | | [removed: [104](#i9617800d5f64449f8d30837090e9701a_223)] [added: [108](#i81392b4a1d0e495bb45df4a99b7c7393_217)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [removed: [104](#i9617800d5f64449f8d30837090e9701a_226)] [added: [108](#i81392b4a1d0e495bb45df4a99b7c7393_220)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [105](#i9617800d5f64449f8d30837090e9701a_232)] [added: [109](#i81392b4a1d0e495bb45df4a99b7c7393_226)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [105](#i9617800d5f64449f8d30837090e9701a_235)] [added: [109](#i81392b4a1d0e495bb45df4a99b7c7393_229)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [105](#i9617800d5f64449f8d30837090e9701a_238)] [added: [109](#i81392b4a1d0e495bb45df4a99b7c7393_232)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [105](#i9617800d5f64449f8d30837090e9701a_241)] [added: [109](#i81392b4a1d0e495bb45df4a99b7c7393_235)] | | |

| Item 14. | | | Principal Accountant Fees and Services | | | [removed: [105](#i9617800d5f64449f8d30837090e9701a_244)] [added: [109](#i81392b4a1d0e495bb45df4a99b7c7393_238)] | | |

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [106](#i9617800d5f64449f8d30837090e9701a_250)] [added: [110](#i81392b4a1d0e495bb45df4a99b7c7393_244)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [110](#i9617800d5f64449f8d30837090e9701a_256)] [added: [115](#i81392b4a1d0e495bb45df4a99b7c7393_250)] | | |

In this Annual Report on Form 10-K, we make references to our website at [removed: www.westerndigital.com.][added: *www.westerndigital.com*.]

*•expectations regarding [added: capital expenditure plans and investments, including relating to] our Flash Ventures joint venture with Kioxia Corporation [removed: (“Kioxia”), the flash industry and our flash wafer output plans] [added: (“Kioxia”)] and sources of funding for related expenditures;*

| ý | | | ☐ | | | ☐ | | | ☐ | | | ☐ | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b) ¨

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- *expectations regarding the impact of the network security incident;*

*•the global macroeconomic environment;*

WEBSITE REFERENCES

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| ☒ | | | ☐ | | | ☐ | | | ☐ | | | ☐ | | |

- *expectations regarding the global macroeconomic environment, including with respect to economic volatility and uncertainty, declines in consumer confidence and economic growth, customers reducing their inventories, rising interest rates and fuel prices, inflation, the ongoing conflict in Ukraine and the effects of the COVID-19 pandemic;*

*•expectations regarding capital expenditure plans and investments;*

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Our principal manufacturing, R&D, marketing and administrative facilities as of [removed: July 1, 2022] [added: June 30, 2023] were as follows:

| Fremont | | | | | | Leased | | | | | | [removed: 290,000] [added: 295,000] | | | | | | HDD manufacturing of head wafers and R&D | | |

| Irvine | | | | | | Leased | | | | | | [removed: 431,000] [added: 458,000] | | | | | | HDD R&D, administrative, marketing and sales | | |

| Milpitas | | | | | | Owned | | | | | | [removed: 589,000] [added: 578,000] | | | | | | Flash R&D, marketing and sales, and administrative | | |

| San Jose | | | | | | Owned | | | | | | [removed: 2,275,000] [added: 2,205,000] | | | | | | Manufacturing of head wafers, head, media and product development, R&D for Flash and HDD, administrative, marketing and sales | | |

| Longmont | | | | | | Leased | | | | | | [removed: 87,000] [added: 62,000] | | | | | | Flash R&D | | |

| Colorado Springs | | | | | | Leased | | | | | | [removed: 59,000] [added: 54,000] | | | | | | HDD R&D | | |

| Kuching | | | | | | Owned | | | | | | [removed: 285,000] [added: 529,000] | | | | | | HDD manufacturing and development of substrates | | |

| Bangalore | | | | | | Owned and Leased | | | | | | [removed: 1,261,000] [added: 1,260,000] | | | | | | Flash R&D and administrative | | |

| Tefen | | | | | | Owned | | | | | | [removed: 64,000] [added: 72,000] | | | | | | Flash R&D | | |

We also lease office space in various other locations throughout the world primarily for R&D, sales, operations, [added: manufacturing,] administration and technical support.

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

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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: 11, 2022] [added: 4, 2023] was [removed: 874.][added: 855.]

see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations - [removed: Short] [added: Short-] and Long-term Liquidity.*

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 [removed: July 1, 2022.][added: June 30, 2023.]

The graph assumes that $100 was invested in our common stock at the close of market on June [removed: 30, 2017] [added: 29, 2018] and that all dividends were reinvested.

(Assumes $100 investment at market close on June [removed: 30, 2017)][added: 29, 2018)]

[removed: ][added: ]

| | | | June [removed: 30, 2017 | | | | | | June] 29, 2018 | | | | | | June 28, 2019 | | | | | | July 3, 2020 | | | | | | July 2, 2021 | | | | | | July 1, 2022 | | | [added: | | | June 30, 2023 | | |]

| Dow Jones U.S. Technology Hardware & Equipment Index | | | $ | 100.00 | | | | | $ | [removed: 130.26] [added: 107.82] | | | | | $ | [removed: 140.45] [added: 156.84] | | | | | $ | [removed: 204.31] [added: 242.39] | | | | | $ | [removed: 315.74] [added: 216.40] | | | | | $ | [removed: 281.89] [added: 324.28] | |

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| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 64.19 | | | | | $ | 58.99 | | | | | $ | 97.59 | | | | | $ | 60.35 | | | | | $ | 52.72 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 110.42 | | | | | $ | 118.70 | | | | | $ | 167.13 | | | | | $ | 149.39 | | | | | $ | 178.66 | |

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| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 89.48 | | | | | $ | 57.44 | | | | | $ | 52.78 | | | | | $ | 87.32 | | | | | $ | 54.00 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 114.37 | | | | | $ | 126.29 | | | | | $ | 135.77 | | | | | $ | 191.15 | | | | | $ | 170.86 | |

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\[Reserved\]

| Report of Independent Registered Public Accounting Firm (Auditor Firm ID: 185) | | | [removed: [48](#i9617800d5f64449f8d30837090e9701a_97)] [added: [50](#i81392b4a1d0e495bb45df4a99b7c7393_97)] | | |

| Consolidated Balance Sheets — As of [added: June 30, 2023 and] July 1, 2022 [removed: and July 2, 2021] | | | [removed: [51](#i9617800d5f64449f8d30837090e9701a_100)] [added: [53](#i81392b4a1d0e495bb45df4a99b7c7393_100)] | | |

| Consolidated Statements of Operations — Three Years Ended [removed: July 1, 2022] [added: June 30, 2023] | | | [removed: [52](#i9617800d5f64449f8d30837090e9701a_103)] [added: [54](#i81392b4a1d0e495bb45df4a99b7c7393_103)] | | |

| Consolidated Statements of Comprehensive Income (Loss) — Three Years Ended [removed: July 1, 2022] [added: June 30, 2023] | | | [removed: [53](#i9617800d5f64449f8d30837090e9701a_106)] [added: [55](#i81392b4a1d0e495bb45df4a99b7c7393_106)] | | |

| Consolidated Statements of Cash Flows — Three Years Ended [removed: July 1, 2022] [added: June 30, 2023] | | | [removed: [54](#i9617800d5f64449f8d30837090e9701a_109)] [added: [56](#i81392b4a1d0e495bb45df4a99b7c7393_109)] | | |

| Consolidated Statements of [added: Convertible Preferred Stock and] Shareholders' Equity — Three Years Ended [removed: July 1, 2022] [added: June 30, 2023] | | | [removed: [55](#i9617800d5f64449f8d30837090e9701a_112)] [added: [57](#i81392b4a1d0e495bb45df4a99b7c7393_112)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [56](#i9617800d5f64449f8d30837090e9701a_118)] [added: [58](#i81392b4a1d0e495bb45df4a99b7c7393_118)] | | |

[removed: Opinions] [added: *Opinions] on the [removed: *Consolidated] [added: Consolidated] Financial [removed: Statements*] [added: Statements] and Internal Control Over Financial [removed: Reporting][added: Reporting*]

We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of [removed: July 1, 2022] [added: June 30, 2023] and July [removed: 2, 2021,] [added: 1, 2022,] the related consolidated statements of operations, comprehensive income (loss), cash [removed: flows] [added: flows, convertible preferred stock] and shareholders’ equity for each of the years in the three-year period ended [removed: July 1, 2022,] [added: June 30, 2023,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of [removed: July 1, 2022,] [added: June 30, 2023,] 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 [removed: July 1, 2022] [added: June 30, 2023] and July [removed: 2, 2021,] [added: 1, 2022,] and the results of its operations and its cash flows for each of the years in the three-year period ended [removed: July 1, 2022,] [added: June 30, 2023,] 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 [removed: July 1, 2022,] [added: June 30, 2023,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: Basis] [added: *Basis] for [removed: Opinions][added: Opinions*]

[removed: Definition] [added: *Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting*]

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally [removed: accepted accounting principles.]

[removed: Critical] [added: *Critical] Audit [removed: Matters][added: Matters*]

The Company uses judgment in its assessment of variable consideration [added: related to these items] in contracts to be included in the transaction price.

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

*Goodwill [removed: Re-allocation - Fair Value] [added: Impairment Assessment] of the [added: Company’s] Reporting Units*

We identified the assessment of [removed: the fair value of] [added: goodwill for impairment for] the [added: Company’s] reporting units as [removed: of July 3, 2021 as] a critical audit matter.

[removed: Subjective] [added: A high degree of subjective] auditor judgment was required [removed: in assessing] [added: to evaluate] the forecasted [added: revenue, including] revenue [removed: and] [added: growth rates,] forecasted cost of [removed: revenue] [added: goods sold, and the company-specific risk premium] assumptions used in the income approach to estimate the fair value of the reporting units.

The assessment of these assumptions was challenging due to the degree of uncertainty related to [removed: the forecasted revenue] [added: future market] and [removed: cost of revenue.][added: economic conditions.]

Differences in judgment used to determine these assumptions could have a significant effect on the [removed: reporting units’ estimated] [added: Company’s assessment of the] fair value [removed: and the resulting re-allocation] of [removed: goodwill.][added: the reporting units.]

We evaluated the design and tested the operating effectiveness of certain internal controls [removed: related to] [added: over] the Company’s [removed: process to estimate] [added: goodwill impairment process, including controls over] the [added: development of the forecasted revenue, forecasted cost of goods sold, and the company-specific risk premium assumptions.]

[removed: - comparing] [added: We evaluated] the [added: Company’s] forecasted revenue [removed: growth rate] [added: by comparing it] to [removed: the forecasted] [added: historical results and] revenue growth [removed: rate] [added: rates] projected for peer companies and the [removed: industry, as well as other economic data, and][added: industry.]

[removed: -] [added: We evaluated the Company’s forecasted cost of goods sold by] comparing [added: it to historical results and by comparing] the forecasted gross margin to historical gross margin for peer [removed: companies.][added: companies and the industry.]

| | | | July 1, 2022 | | | | | | [removed: July 2, 2021] | | | [added: | | | | | | | | | | | |]

| Cash and cash equivalents | | | $ | [removed: 2,327] [added: 2,023] | | | | | $ | [removed: 3,370] [added: 2,327] | |

| Accounts receivable, net | | | [removed: 2,804] [added: 1,598] | | | | | | [removed: 2,257] [added: 2,804] | | |

| Inventories | | | [removed: 3,638] [added: 3,698] | | | | | | [removed: 3,616] [added: 3,638] | | |

| Other current assets | | | [removed: 684] [added: 567] | | | | | | [removed: 514] [added: 684] | | |

| Total current assets | | | [removed: 9,453] [added: 7,886] | | | | | | [removed: 9,757] [added: 9,453] | | |

| Property, plant and equipment, net | | | [removed: 3,670] [added: 3,620] | | | | | | [removed: 3,188] [added: 3,670] | | |

| Notes receivable and investments in Flash Ventures | | | [removed: 1,396] [added: 1,297] | | | | | | [removed: 1,586] [added: 1,396] | | |

| Goodwill | | | [removed: 10,041] [added: 10,037] | | | | | | [removed: 10,066] [added: 10,041] | | |

| Other intangible assets, net | | | [removed: 213] [added: 80] | | | | | | [removed: 442] [added: 213] | | |

| Other non-current assets | | | [removed: 1,486] [added: 1,509] | | | | | | [removed: 1,093] [added: 1,486] | | |

| Total assets | | | $ | [removed: 26,259] [added: 24,429] | | | | | $ | [removed: 26,132] [added: 26,259] | |

| [removed: LIABILITIES] [added: LIABILITIES, CONVERTIBLE PREFERRED STOCK] AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |

| Accounts payable | | | $ | [removed: 1,902] [added: 1,293] | | | | | $ | [removed: 1,934] [added: 1,902] | |

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*Change in Accounting Principle*

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for convertible debt instruments and convertible preferred stock as of July 2, 2022 due to the adoption of Accounting Standards Update No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

accepted accounting principles.

A high degree of subjective auditor judgment was required to evaluate the Company’s historical pricing information and the level of channel inventory used to determine variable consideration for sales to resellers.

We evaluated historical pricing by inspecting a sample of customer contracts with resellers and comparing the sales incentives earned during the year to the sales incentive program terms and conditions and recalculating amounts paid to the resellers.

We tested the channel inventory levels by comparing the on-hand inventory amounts for a sample of resellers to information obtained from the resellers and evaluated the reasonableness of reconciling items.

As discussed in Note 3 to the consolidated financial statements, the goodwill balance as of June 30, 2023 was $10,037 million.

The Company tests goodwill for impairment on an annual basis as of the beginning of its fourth quarter or more frequently if events or changes in circumstances indicate that the goodwill may be impaired.

The Company performed a quantitative assessment as of the end of the first and second quarters of fiscal 2023 and again as of its annual goodwill impairment test date, and the fair value of each reporting unit was measured based on a combination of valuation techniques, including an income approach and a market approach.

Based on the Company’s analysis, the fair value of both reporting units was in excess of the carrying values and therefore, did not result in any goodwill impairment.

Additionally, evaluating the company-specific risk premium assumption required specialized skills and knowledge.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the company-specific risk premium by comparing management’s financial projections to publicly available forecasts of comparable companies and the Company’s actual operating results in prior years.

[Table of Content](#i81392b4a1d0e495bb45df4a99b7c7393_10)[s](#i81392b4a1d0e495bb45df4a99b7c7393_10)

| Convertible preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — 1 shares in 2023 and 0 shares in 2022; aggregate liquidation preference of $933 and $0 as of June 30, 2023 and June 30, 2022, respectively | | | 876 | | | | | | — | | |

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| Less: cumulative dividends allocated to preferred shareholders | | | | | | | | | | | | | | | 24 | | | | | | — | | | | | | — | | |

| Net income (loss) attributable to common shareholders | | | | | | | | | | | | | | | $ | (1,730) | | | | | $ | 1,500 | | | | | $ | 821 | |

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| Non-cash portion of asset impairment | | | 19 | | | | | | — | | | | | | — | | |

| Net proceeds from convertible preferred stock | | | 881 | | | | | | — | | | | | | — | | |

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Evaluating the assumptions used by the Company to estimate the variable consideration, specifically anticipated price decreases based on historical pricing information, current pricing trends, and channel inventory levels during the expected reseller holding period, required a higher degree of auditor judgment due to the uncertainty involved in the estimate.

We evaluated the Company’s ability to reasonably estimate the assumptions used to determine the variable consideration by comparing historically recorded variable consideration to actual subsequent payments and credits.

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

As discussed in Notes 1 and 3 to the consolidated financial statements, historically, the Company had been managed and reported under a single operating segment.

In 2021, the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker, announced a decision to reorganize the Company’s business by forming two separate product business units: flash-based products (Flash) and hard disk drives (HDD).

To align the new operating model and business structure, the Company made management organizational changes and implemented new reporting modules and processes to provide discrete information to manage the business.

Effective July 3, 2021, the Company’s management finalized its assessment of the Company’s operating segments and concluded that the Company now has two operating segments: Flash and HDD.

In connection with the Company’s determination of its operating segments, effective July 3, 2021, the Company determined that its operating segments were also its reporting units and re-allocated its goodwill between its reporting units based on the estimated relative fair values of the reporting units, with $4,328 million allocated to the HDD reporting unit and $5,738 million allocated to the Flash reporting unit.

reporting units’ fair value, including controls related to the determination of the forecasted revenue and forecasted cost of revenue assumptions for the reporting units.

We evaluated the Company’s forecasted revenue and cost of revenue assumptions by:

- comparing the forecasted revenue and cost of revenue to the Company’s budget,

- comparing the forecasted revenue and cost of revenue to actual revenue and cost of revenue recorded subsequent to the measurement date,

- comparing the forecasted revenue growth rate to the actual revenue growth rate in prior years,

- comparing the forecasted cost of revenue to actual cost of revenue in prior years,

August 24, 2022

| Common stock, $0.01 par value; authorized — 450 shares; issued — 315 shares in 2022 and 312 shares in 2021; outstanding — 315 shares in 2022 and 308 shares in 2021 | | | 3 | | | | | | 3 | | |

| Treasury stock — common shares at cost; 0 shares in 2022 and 4 shares in 2021 | | | — | | | | | | (232) | | |

| Cash dividends declared per share | | | | | | | | | | | | | | | $ | — | | | | | $ | — | | | | | $ | 1.50 | |

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| Acquisitions, net of cash acquired | | | — | | | | | | — | | | | | | (22) | | |

| Dividends paid to shareholders | | | — | | | | | | — | | | | | | (595) | | |

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There has been no change in our internal control over financial reporting during the fourth quarter ended [removed: July 1, 2022,] [added: June 30, 2023,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

None.

*Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934*

On March 2, 2021, the U.S. government designated the Russian Federal Security Service (the “FSB”) as a blocked party under Executive Order 13382; however, on the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued General License No. 1B (the “OFAC General License”), which generally authorizes U.S. companies to engage in certain transactions and dealings with the FSB necessary and ordinarily incident to requesting or obtaining licenses, permits, certifications or notifications issued or registered by the FSB for the importation, distribution or use of information technology products in the Russian Federation.

Prior to February 24, 2022, in the normal course of business and as permitted and authorized by the OFAC General License, we filed notifications with, or applied for import licenses and permits from, the FSB as required pursuant to Russian encryption product import controls for the purpose of enabling us or our channel partners to import and distribute certain products in the Russian Federation.

There are no gross revenues or net profits directly associated with these activities, and we do not distribute or sell products or provide services to the FSB.

After February 24, 2022, we ceased shipments into Russia and we have not filed notifications with or applied for import licenses and permits from the FSB since such date.

We expect to resume filing notifications with and applications for import licenses and permits from the FSB to qualify our products for importation and distribution in the Russian Federation if and when we decide to resume sales into the Russian Federation and as permitted by applicable U.S. law, including the OFAC General License.

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended [removed: July 1, 2022.][added: June 30, 2023.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended [removed: July 1, 2022.][added: June 30, 2023.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended [removed: July 1, 2022.][added: June 30, 2023.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended [removed: July 1, 2022.][added: June 30, 2023.]

There is incorporated herein by reference the information required by this Item included in the Company’s Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the year ended [removed: July 1, 2022.][added: June 30, 2023.]

| [removed: [3.2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)] [added: [3.](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)[3](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 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 February 12, 2021) | | |

| [removed: [4.3](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex42.htm)] [added: [4.4](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: [4.4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312522187239/d257590dex41.htm)] [added: [4.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312522187239/d257590dex41.htm)] | | | | | | First Supplemental Indenture, dated as of June 30, 2022, by and between Western Digital Corporation 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. 1-08703) with the Securities and Exchange Commission on July 1, 2022) | | |

| [removed: [4.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)] [added: [4.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)] | | | | | | Indenture, dated as of December 10, 2021, between Western Digital Corporation 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. 1-08703) with the Securities and Exchange Commission on December 10, 2021) | | |

| [removed: [4.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex42.htm)] [added: [4.7](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex42.htm)] | | | | | | First Supplemental Indenture (including Form of 2.850% Senior Notes due 2029 and Form of 3.100% Senior Notes due 2032), dated as of December 10, 2021, between Western Digital Corporation 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. 1-08703) with the Securities and Exchange Commission on December 10, 2021) | | |

| [removed: [10.1.1](https://www.sec.gov/Archives/edgar/data/106040/000010604018000010/wdc-2018q2ex1014.htm)] [added: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] | | | | | | Form of Notice of Grant of [added: Restricted] Stock Units and [added: Restricted] Stock Unit Award [removed: Agreement,] [added: Agreement] under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.1.4] [added: 10.4] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February] [added: November] 6, 2018)* | | |

| [removed: [10.1.2](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex101.htm)] [added: [10.1.3](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] | | | | | | Form of Notice [removed: of] [added: and] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement -] [added: Agreement-] Financial [removed: Measures,] [added: Measure,] under the [added: Amended and Restated] 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 [removed: 12, 2019)*] [added: 4, 2021)*] | | |

| [removed: [10.1.3](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex102.htm)] [added: [10.1.4](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex102.htm)] | | | | | | Form of Notice [removed: of] [added: and] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement -] [added: Agreement-] TSR Measure, under the [added: Amended and Restated] 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 [removed: 12, 2019)*] [added: 4, 2021)*] | | |

| [removed: [10.1.4](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement – Financial [removed: Measure,] [added: Measures,] under the Amended and Restated 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 February 9, 2021)* | | |

| [removed: [10.1.5](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] [added: [10.1.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex102.htm)] | | | | | | 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 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 February 9, 2021)* | | |

| [removed: [10.1.6](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)[.1](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex101.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement- Financial Measure,] [added: Agreement] under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] 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 [removed: 4, 2021)*] [added: 2, 2022)*] | | |

| [removed: [10.1.7](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex102.htm)] [added: [10.1.9](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex103.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of [removed: Performance] [added: Restricted] Stock Units and [removed: Performance] [added: Restricted] Stock Unit Award [removed: Agreement- TSR Measure,] [added: Agreement - Vice President and Above,] under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit [removed: 10.2] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 4, 2021)* | | |

| [removed: [10.1.8](https://www.sec.gov/Archives/edgar/data/106040/000010604016000019/wdc-010116xexhibit1011.htm)] [added: [10.1.8](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] | | | | | | Form of Notice of Grant of [added: Restricted] Stock [removed: Option] [added: Units] and [removed: Option] [added: Restricted Stock Unit Award] Agreement [removed: - Executives, as amended on November 3, 2015,] [added: – Vice President and Above,] 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: 10.1.1] [added: 10.4] to the Company’s Quarterly Report on Form 10-Q [removed: (File] [added: (Filed] No. 1-08703) with the Securities and Exchange Commission on February [removed: 10, 2016)*] [added: 9, 2021)*] | | |

| [removed: [10.1.9](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] [added: [10.1.5](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] | | | | | | Western Digital Corporation Amended and Restated 2017 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, amended and restated as of August 16, 2021 (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 4, 2021)* | | |

| [removed: [10.1.10](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/wdc-2019q1ex103.htm)] [added: [10.1.6](https://www.sec.gov/Archives/edgar/data/106040/000010604018000034/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: [10.1.11](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/wdc-2020q1ex103.htm)] [added: [10.1.7](https://www.sec.gov/Archives/edgar/data/106040/000010604019000075/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: [10.1.12](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)[.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000011/wdc-2021q2ex104.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and] [added: Notice for] Restricted Stock Unit Award [removed: Agreement] – Vice President and Above, under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q [removed: (Filed] [added: (File] No. 1-08703) with the Securities and Exchange Commission on February [removed: 9, 2021)*] [added: 3, 2022)*] | | |

| [removed: [10.1.13](https://www.sec.gov/Archives/edgar/data/0000106040/000010604018000034/wdc-2019q1ex103.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)[7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)] | | | | | | [removed: 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 [removed: 2017 Performance Incentive Plan] [added: Amended and Restated Executive Severance Plan, amended and restated as of May 24, 2021] (Filed as Exhibit [removed: 10.3] [added: 10.7] 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 4,] [added: August 27,] 2021)* | | |

| [removed: [10.1.14](https://www.sec.gov/Archives/edgar/data/106040/000010604021000053/wdc-2022q1ex104.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)[8](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] | | | | | | Form of [removed: Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award] [added: Indemnity] Agreement [removed: under the] [added: for Directors of] Western Digital Corporation [removed: 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 [removed: 6, 2018)*] [added: 8, 2002)*] | | |

| [removed: [10.1.15](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex103.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex101.htm)[1](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex101.htm)] | | | | | | [removed: Notice of Grant] [added: Offer Letter, dated as] of [removed: Performance Stock Units and Performance Stock Unit Award – TSR Measure (CEO Sign-On Award)] [added: February 18, 2020, to David Goeckeler] (Filed as Exhibit [removed: 10.3] [added: 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: [10.1.16](https://www.sec.gov/Archives/edgar/data/106040/000119312522176478/d340008dex101.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex101.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex101.htm)] | | | | | | [removed: First Amendment to the Notice of Grant] [added: Offer Letter, dated as] of [removed: Performance Stock Units and Performance Stock Unit Award – TSR Measure (CEO Sign-On Award)] [added: December 14, 2021, to Wissam Jabre] (Filed as Exhibit 10.1 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 [removed: June 17,] [added: May 4,] 2022)* | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/106040/000010604021000024/wdc-2021q3ex101.htm)] [added: [10.3](https://www.sec.gov/Archives/edgar/data/106040/000010604021000024/wdc-2021q3ex101.htm)] | | | | | | Western Digital Corporation Executive Short-Term Incentive Plan (supersedes the Western Digital Corporation Executive Short-Term Incentive Plan dated August 7, 2019), dated February 9, 2021 (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 6, 2021)* | | |

| [removed: [10.3](https://www.sec.gov/Archives/edgar/data/106040/000119312521332703/d420765dex101.htm)] [added: [10.2](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex101.htm)] | | | | | | Western Digital Corporation [added: Amended and Restated] 2021 Long-Term Incentive Plan, [removed: adopted] [added: amended and restated] as of August [removed: 18, 2021] [added: 25, 2022] (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 18, [removed: 2021)*] [added: 2022)*] | | |

| [removed: [10.3.1](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex102.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex102.htm)[4](https://www.sec.gov/Archives/edgar/data/106040/000119312522288992/d407769dex102.htm)] | | | | | | [removed: Form of Grant Notice for Performance Stock Unit Award (TSR Measure) under the] Western Digital Corporation [removed: 2021 Long-Term Incentive Plan] [added: Amended and Restated 2005 Employee Stock Purchase Plan, amended and restated as of August 25, 2022] (Filed as Exhibit 10.2 to the Company’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 3,] [added: November 18,] 2022)* | | |

| [removed: [10.3.2](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex103.htm)] [added: [10.2.](https://www.sec.gov/Archives/edgar/data/106040/000010604023000024/wdc-2023q4ex1023.htm)[3](https://www.sec.gov/Archives/edgar/data/106040/000010604023000024/wdc-2023q4ex1023.htm)] | | | | | | Form of Grant Notice for [removed: Performance] [added: Restricted] Stock Unit Award [removed: (Financial Measures)] [added: – Vice President and Above,] under the Western Digital Corporation [added: Amended and Restated] 2021 Long-Term Incentive [removed: 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 February 3, 2022)*] [added: Plan†*] | | |

| [removed: [10.3.3](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex104.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)[9](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)] | | | | | | Form of [removed: Grant Notice] [added: Indemnity Agreement] for [removed: Restricted Stock Unit Award – Vice President and Above, under the] [added: Officers of] Western Digital Corporation [removed: 2021 Long-Term Incentive Plan] (Filed as Exhibit [removed: 10.4] [added: 10.5] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: February 3, 2022)*] [added: November 8, 2002)*] | | |

| [removed: [10.3.4](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex105.htm)] [added: [10.2.](https://www.sec.gov/Archives/edgar/data/106040/000010604023000024/wdc-2023q4ex1024.htm)[4](https://www.sec.gov/Archives/edgar/data/106040/000010604023000024/wdc-2023q4ex1024.htm)] | | | | | | Western Digital Corporation [added: Amended and Restated] 2021 Long-Term Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, [removed: as] amended [removed: November 22, 2021 (Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities] and [removed: Exchange Commission on February 3, 2022)*] [added: restated as of May 23, 2023†*] | | |

| [removed: [10.4](https://www.sec.gov/Archives/edgar/data/106040/000119312518320967/d642144dex102.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)[5](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)] | | | | | | [removed: Western Digital Corporation] Amended and Restated [removed: 2005 Employee Stock Purchase] [added: Deferred Compensation] Plan, [removed: as] amended [removed: August 2, 2018] [added: and restated effective January 1, 2013] (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: 2, 2012)*] | | |

| [removed: [10.5](https://www.sec.gov/Archives/edgar/data/106040/000119312516593317/d194750dex41.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex101.htm)[4](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex101.htm)] | | | | | | [removed: SanDisk] [added: Investment Agreement, dated January 31, 2023, by and between Western Digital] Corporation [removed: 2013 Incentive Plan] [added: and AP WD Holdings, L.P.] (Filed as Exhibit [removed: 4.1] [added: 10.1] to the Company’s [removed: Registration Statement] [added: Quarterly Report] on Form [removed: S-8] [added: 10-Q] (File No. [removed: 333-211420)] [added: 1-08703)] with the Securities and Exchange Commission on May [removed: 17, 2016)*] [added: 10, 2023)] | | |

| [removed: [10.6](https://www.sec.gov/Archives/edgar/data/106040/000119312512449441/d419625dex104.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex104.htm)[3](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex104.htm)] | | | | | | Amended and Restated [removed: Deferred Compensation Plan, amended and restated effective] [added: Letter Agreement, dated] January [removed: 1, 2013] [added: 31, 2023, by and between Western Digital Corporation and Elliott Investment Management L.P.] (Filed as Exhibit 10.4 to the Company’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 2, 2012)*] [added: February 1, 2023)] | | |

| [removed: [10.7](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)[6](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex106.htm)] | | | | | | Western Digital Corporation Amended and Restated Change in Control Severance Plan, amended and restated as of May 24, 2021 (Filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 27, 2021)* | | |

| [removed: [10.8](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000040/wdc-2021q4ex107.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex102.htm)[5](https://www.sec.gov/Archives/edgar/data/106040/000010604023000017/wdc-2023q3ex102.htm)] | | | | | | [added: Investment Agreement, dated January 31, 2023, by and among] Western Digital [removed: Corporation Amended and Restated Executive Severance Plan, amended] [added: Corporation, Elliott Associates, L.P.] and [removed: restated as of May 24, 2021] [added: Elliott International, L.P.] (Filed as Exhibit [removed: 10.7] [added: 10.2] 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, 2021)*] [added: May 10, 2023)] | | |

| [removed: [10.9](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w4.txt)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex103.htm)[6](https://www.sec.gov/Archives/edgar/data/106040/000119312523020502/d425756dex103.htm)] | | | | | | [removed: Form of Indemnity Agreement for Directors of] [added: Registration Rights Agreement, dated January 31, 2023, by and among] Western Digital [removed: Corporation] [added: Corporation, AP WD Holdings, L.P., Elliott Associates, L.P. and Elliott International, L.P.] (Filed as Exhibit [removed: 10.4] [added: 10.3] to the Company’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 8, 2002)*] [added: February 1, 2023)] | | |

| [removed: [10.10](https://www.sec.gov/Archives/edgar/data/106040/000089256902002190/a85682exv10w5.txt)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604018000029/wdc-2018q4ex1010.htm)[0](https://www.sec.gov/Archives/edgar/data/106040/000010604018000029/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: [10.11](https://www.sec.gov/Archives/edgar/data/106040/000010604018000029/wdc-2018q4ex1010.htm)] [added: [10.3](https://www.sec.gov/Archives/edgar/data/106040/000010604022000055/wdc-2022q4ex1027.htm)[3](https://www.sec.gov/Archives/edgar/data/106040/000010604022000055/wdc-2022q4ex1027.htm)] | | | | | | [removed: Form of Indemnification] [added: Operating] Agreement [removed: entered into] [added: of Flash Forward, Ltd, dated as of March 1, 2011,] between [removed: SanDisk] [added: Toshiba] Corporation and [removed: its directors and officers] [added: SanDisk Flash B.V.] (Filed as Exhibit [removed: 10.10] [added: 10.27] 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: 25, 2022)##] | | |

| [removed: [10.12](https://www.sec.gov/Archives/edgar/data/106040/000010604020000024/wdc-2020q3ex101.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex106.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex106.htm)[3](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex106.htm)] | | | | | | [removed: Offer Letter,] [added: Flash Alliance, Master Agreement] dated as of [removed: February 18, 2020, to David Goeckeler] [added: July 7, 2006, by and among SanDisk Corporation, Toshiba Corporation and SanDisk (Ireland) Limited] (Filed as Exhibit [removed: 10.1] [added: 10.6] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: May 8, 2020)*] [added: February 3, 2022)##] | | |

| [removed: [10.13](https://www.sec.gov/Archives/edgar/data/106040/000010604020000061/wdc-2021q1ex101.htm)] [added: [10.1](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex102.htm)[7](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex102.htm)] | | | | | | [removed: Special Retention] [added: Restatement] Agreement, dated [added: January 7, 2022, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A.,] as [removed: of August 26, 2019, with Michael C. Ray] [added: administrative agent, and the lenders party thereto] (Filed as Exhibit [removed: 10.1] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: November 6, 2020)*] [added: May 4, 2022)] | | |

| [removed: [10.14](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex101.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex107.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex107.htm)[4](https://www.sec.gov/Archives/edgar/data/106040/000010604022000018/wdc-2022q2ex107.htm)] | | | | | | [removed: Offer Letter,] [added: Operating Agreement of Flash Alliance, Ltd.,] dated as of [removed: December 14, 2021, to Wissam Jabre] [added: July 7, 2006, by and between Toshiba Corporation and SanDisk (Ireland) Limited] (Filed as Exhibit [removed: 10.1] [added: 10.7] to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on [removed: May 4, 2022)*] [added: February 3, 2022)##] | | |

| [removed: [10.15](https://www.sec.gov/Archives/edgar/data/106040/000119312522169552/d314047dex101.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex106.htm)[2](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex106.htm)[1](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex106.htm)] | | | | | | [removed: Letter] [added: Security] Agreement, [added: dated as of June 20, 2023,] by and among Western Digital [removed: Corporation] [added: Corporation, Western Digital Technologies, Inc] and [removed: Elliott Investment Management L.P., dated June 7, 2022] [added: JPMorgan Chase Bank, N.A. as Collateral Agent] (Filed as Exhibit [removed: 10.1] [added: 10.6] to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on June [removed: 8, 2022)] [added: 21, 2023)] | | |

| [removed: [10.16](https://www.sec.gov/Archives/edgar/data/106040/000010604022000040/wdc-2022q3ex102.htm)] [added: [10.](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex102.htm)[18](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex102.htm)[.](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex102.htm)[1](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex102.htm)] | | | | | | [removed: Restatement] [added: Amendment No. 1, dated as of June 20, 2023, to the Loan] Agreement, dated [added: as of] January [removed: 7, 2022,] [added: 25, 2023,] by and among Western Digital Corporation, [added: each lender party thereto,] JPMorgan Chase [removed: Bank. N.A.,] [added: Bank, N.A.] as [removed: administrative agent,] [added: Administrative Agent] and the [removed: lenders party] [added: other parties] thereto (Filed as Exhibit 10.2 to the Company’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q] [added: 8-K] (File No. 1-08703) with the Securities and Exchange Commission on [removed: May 4, 2022)*] [added: June 21, 2023)] | | |