Western Digital (WDC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

FOR IMMEDIATE RELEASE:

WESTERN DIGITAL ANNOUNCES FINANCIAL RESULTS FOR

SECOND QUARTER FISCAL YEAR 2019

SAN JOSE, Calif. — January 24, 2019 — Western Digital Corp. (NASDAQ: WDC) today reported revenue of $4.2 billion for its second fiscal quarter ended December 28, 2018. Operating income was $176 million with a net loss of $487 million, or ($1.68) per share. Excluding certainnon-GAAP adjustments, the company achievednon-GAAP operating income of $589 million andnon-GAAP net income of $424 million, or $1.45 per share.

In theyear-ago quarter, the company reported revenue of $5.3 billion, operating income of $955 million and net loss of $823 million, or ($2.78) per share.Non-GAAP operating income in theyear-ago quarter was $1.4 billion andnon-GAAP net income was $1.2 billion, or $3.95 per share.

The company generated $469 million in cash from operations during the second fiscal quarter of 2019, ending with $4.1 billion of total cash, cash equivalents andavailable-for-sale securities. The company returned $144 million to shareholders through dividends and repaid the outstanding balance on its revolver of $500 million. On November 7, 2018, the company declared a cash dividend of $0.50 per share of its common stock, which was paid to shareholders on January 14, 2019.

“Despite a softening business environment, our fiscal second quarter results were generally within our guidance ranges,” said Steve Milligan, chief executive officer, Western Digital. “We are taking actions to better align our cost and expense structure to near-term business conditions while continuing to deliver innovative solutions to drive our future success. We enter calendar 2019 with the strongest product portfolio in our history and confidence in our ability to capitalize on the long-term opportunities associated with data growth.”

Western Digital Announces Financial Results for Second Quarter Fiscal Year 2019

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The investment community conference call to discuss these results and the company’s guidance for the third fiscal quarter of 2019 will be broadcast live online today at 2:30 p.m. Pacific/5:30 p.m. Eastern. The live and archived conference call/webcast, the company’s guidance for the third fiscal quarter and the earnings presentation can be accessed online atinvestor.wdc.com. The telephone replay number in the U.S. is (855)859-2056 or (404)537-3406 for international callers. The required conference ID is 7559847.

About Western Digital^®

Western Digital creates environments for data to thrive. The company is driving the innovation needed to help customers capture, preserve, access and transform an ever-increasing diversity of data. Everywhere data lives, from advanced data centers to mobile sensors to personal devices, our industry-leading solutions deliver the possibilities of data. Western Digital^® data-centric solutions are comprised of the Western Digital^®,G-Technology™, SanDisk^®, Upthere™ and WD^® brands. Financial and investor information is available on the company’s Investor Relations website atinvestor.wdc.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the company’s preliminary financial results for its second fiscal quarter ended December 28, 2018; expectations regarding market conditions; plans to take actions to align our cost and expense structure to business conditions; platform and product portfolio; market positioning; and growth opportunities. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. The

Western Digital Announces Financial Results for Second Quarter Fiscal Year 2019

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preliminary financial results for the company’s second fiscal quarter ended December 28, 2018, included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form10-Q may differ from these preliminary results as a result of the completion of the company’s financial closing procedures; final adjustments; completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. Other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: volatility in global economic conditions; business conditions and growth in the storage ecosystem; impact of restructuring activities and cost saving initiatives; impact of competitive products and pricing; market acceptance and cost of commodity materials and specialized product components; actions by competitors; unexpected advances in competing technologies; our development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with acquisitions, mergers and joint ventures; difficulties or delays in manufacturing; the outcome of legal proceedings; and other risks and uncertainties listed in the company’s filings with the Securities and Exchange Commission (the “SEC”), including the company’sForm 10-Q filed with the SEC on November 6, 2018, to which your attention is directed. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update these forward-looking statements to reflect new information or events.

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Western Digital, the Western Digital logo,G-Technology, SanDisk, Upthere and WD are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries.

Western Digital Announces Financial Results for Second Quarter Fiscal Year 2019

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Company contacts:

Western Digital Corp.

Investor Contact:	Media Contact:
T. Peter Andrew	Jim Pascoe
949.672.9655	408.717.6999
peter.andrew@wdc.com	jim.pascoe@wdc.com
investor@wdc.com

WESTERN DIGITAL CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions; unaudited; on a US GAAP basis)

	Dec. 28, 2018		June 29, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	4,013	$	5,005
Accounts receivable, net		1,715		2,197
Inventories		3,427		2,944
Other current assets		587		492
Total current assets		9,742		10,638
Property, plant and equipment, net		3,077		3,095
Notes receivable and investments in Flash Ventures		2,318		2,105
Goodwill		10,074		10,075
Other intangible assets, net		2,148		2,680
Othernon-current assets		580		642
Total assets	$	27,939	$	29,235
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,925	$	2,265
Accounts payable to related parties		310		259
Accrued expenses		1,526		1,274
Accrued compensation		345		479
Current portion of long-term debt		244		179
Total current liabilities		4,350		4,456
Long-term debt		10,370		10,993
Other liabilities		2,307		2,255
Total liabilities		17,027		17,704
Total shareholders’ equity		10,912		11,531
Total liabilities and shareholders’ equity	$	27,939	$	29,235

WESTERN DIGITAL CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions except per share amounts; unaudited; on a US GAAP basis)

	Three Months Ended						Six Months Ended
	Dec. 28, 2018			Dec. 29, 2017			Dec. 28, 2018			Dec. 29, 2017
Revenue, net	$	4,233		$	5,336		$	9,261		$	10,517
Cost of revenue		3,189			3,323			6,553			6,591
Gross profit		1,044			2,013			2,708			3,926
Operating expenses:
Research and development		539			629			1,115			1,221
Selling, general and administrative		309			381			665			745
Employee termination, asset impairment and other charges		20			48			66			100
Total operating expenses		868			1,058			1,846			2,066
Operating income		176			955			862			1,860
Interest and other expense, net		(95	)		(181	)		(198	)		(376	)
Income before taxes		81			774			664			1,484
Income tax expense		568			1,597			640			1,626
Net income (loss)	$	(487	)	$	(823	)	$	24		$	(142	)
Income (loss) per common share
Basic	$	(1.68	)	$	(2.78	)	$	0.08		$	(0.48	)
Diluted	$	(1.68	)	$	(2.78	)	$	0.08		$	(0.48	)
Weighted average shares outstanding:
Basic		290			296			291			295
Diluted		290			296			296			295

WESTERN DIGITAL CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited; on a US GAAP basis)

	Three Months Ended						Six Months Ended
	Dec. 28, 2018			Dec. 29, 2017			Dec. 28, 2018			Dec. 29, 2017
Operating Activities
Net income (loss)	$	(487	)	$	(823	)	$	24		$	(142	)
Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization		472			535			952			1,068
Stock-based compensation		79			99			158			196
Deferred income taxes		80			(165	)		281			(129	)
Loss (gain) on disposal of assets		(1	)		11			1			12
Write-off of issuance costs and amortization of debt discounts		10			13			19			23
Othernon-cash operating activities, net		17			5			37			16
Changes in:
Accounts receivable, net		504			49			482			(99	)
Inventories		(308	)		21			(483	)		65
Accounts payable		(179	)		(130	)		(256	)		(276	)
Accounts payable to related parties		24			24			51			44
Accrued expenses		220			(69	)		254			95
Accrued compensation		(154	)		55			(134	)		17
Other assets and liabilities, net		192			1,557			(212	)		1,425
Net cash provided by operating activities		469			1,182			1,174			2,315
Investing Activities
Purchases of property, plant and equipment, net		(220	)		(251	)		(497	)		(406	)
Activity related to Flash Ventures, net		(225	)		(378	)		(196	)		(509	)
Acquisitions, net of cash acquired		—			(6	)		—			(99	)
Other		(21	)		6			(32	)		7
Net cash used in investing activities		(466	)		(629	)		(725	)		(1,007	)
Financing Activities
Employee stock plans, net		50			73			(8	)		32
Repurchases of common stock		—			—			(563	)		—
Dividends paid to shareholders		(144	)		(148	)		(292	)		(295	)
Settlement of debt hedge contracts		—			2			—			28
Proceeds from debt, net of issuance costs		—			2,958			—			2,958
Repayment of debt		(537	)		(4,052	)		(575	)		(4,114	)
Net cash used in financing activities		(631	)		(1,167	)		(1,438	)		(1,391	)
Effect of exchange rate changes on cash		(5	)		—			(3	)		1
Decrease in cash and cash equivalents		(633	)		(614	)		(992	)		(82	)
Cash and cash equivalents, beginning of period		4,646			6,886			5,005			6,354
Cash and cash equivalents, end of period	$	4,013		$	6,272		$	4,013		$	6,272

WESTERN DIGITAL CORPORATION

PRELIMINARY RECONCILIATION OF GAAP TONON-GAAP FINANCIAL MEASURES

(in millions; unaudited)

	Three Months Ended						Six Months Ended
	Dec. 28, 2018			Dec. 29, 2017			Dec. 28, 2018			Dec. 29, 2017
GAAP cost of revenue	$	3,189		$	3,323		$	6,553		$	6,591
Amortization of acquired intangible assets		(215	)		(274	)		(450	)		(553	)
Stock-based compensation expense		(13	)		(13	)		(24	)		(26	)
Charges related to cost saving initiatives		(6	)		(6	)		(7	)		7
Manufacturing underutilization charges		(49	)		—			(49	)		—
Non-GAAP cost of revenue	$	2,906		$	3,030		$	6,023		$	6,019
GAAP gross profit	$	1,044		$	2,013		$	2,708		$	3,926
Amortization of acquired intangible assets		215			274			450			553
Stock-based compensation expense		13			13			24			26
Charges related to cost saving initiatives		6			6			7			(7	)
Manufacturing underutilization charges		49			—			49			—
Non-GAAP gross profit	$	1,327		$	2,306		$	3,238		$	4,498
GAAP operating expenses	$	868		$	1,058		$	1,846		$	2,066
Amortization of acquired intangible assets		(41	)		(41	)		(82	)		(81	)
Stock-based compensation expense		(66	)		(86	)		(134	)		(170	)
Employee termination, asset impairment and other charges		(20	)		(48	)		(66	)		(100	)
Acquisition-related charges		—			(6	)		—			(10	)
Charges related to cost saving initiatives		(2	)		(12	)		(5	)		(21	)
Other		(1	)		—			(1	)		—
Non-GAAP operating expenses	$	738		$	865		$	1,558		$	1,684
GAAP operating income	$	176		$	955		$	862		$	1,860
Cost of revenue adjustments		283			293			530			572
Operating expense adjustments		130			193			288			382
Non-GAAP operating income	$	589		$	1,441		$	1,680		$	2,814
GAAP interest and other expense, net	$	(95	)	$	(181	)	$	(198	)	$	(376	)
Convertible debt activity, net		6			—			13			—
Debt extinguishment costs		—			2			—			2
Other		(4	)		(1	)		(7	)		(6	)
Non-GAAP interest and other expense, net	$	(93	)	$	(180	)	$	(192	)	$	(380	)
GAAP income tax expense	$	568		$	1,597		$	640		$	1,626
Income tax adjustments		(496	)		(1,544	)		(482	)		(1,489	)
Non-GAAP income tax expense	$	72		$	53		$	158		$	137

WESTERN DIGITAL CORPORATION

PRELIMINARY RECONCILIATION OF GAAP TONON-GAAP FINANCIAL MEASURES

(in millions, except per share amounts; unaudited)

	Three Months Ended						Six Months Ended
	Dec. 28, 2018			Dec. 29, 2017			Dec. 28, 2018			Dec. 29, 2017
GAAP net income (loss)	$	(487	)	$	(823	)	$	24		$	(142	)
Amortization of acquired intangible assets		256			315			532			634
Stock-based compensation expense		79			99			158			196
Employee termination, asset impairment and other charges		20			48			66			100
Acquisition-related charges		—			6			—			10
Charges related to cost saving initiatives		8			18			12			14
Manufacturing underutilization charges		49			—			49			—
Convertible debt activity, net		6			—			13			—
Debt extinguishment costs		—			2			—			2
Other		(3	)		(1	)		(6	)		(6	)
Income tax adjustments		496			1,544			482			1,489
Non-GAAP net income	$	424		$	1,208		$	1,330		$	2,297
Diluted income (loss) per common share
GAAP	$	(1.68	)	$	(2.78	)	$	0.08		$	(0.48	)
Non-GAAP	$	1.45		$	3.95		$	4.49		$	7.51
Diluted weighted average shares outstanding:
GAAP		290			296			296			295
Non-GAAP		293			306			296			306

To supplement the condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the table above sets forthnon-GAAP cost of revenue;non-GAAP gross profit;non-GAAP operating expenses;non-GAAP operating income;non-GAAP interest and other expense, net;non-GAAP income tax expense;non-GAAP net income; andnon-GAAP diluted income per common share(“Non-GAAP measures”). TheseNon-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different fromNon-GAAP measures used by other companies. The company believes the presentation of theseNon-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors for measuring the company’s earnings performance and comparing it against prior periods. Specifically, the company believes theseNon-GAAP measures provide useful information to both management and investors as they exclude certain expenses, gains and losses that the company believes are not indicative of its core operating results or because they are consistent with the financial models and estimates published by many analysts who follow the company and its peers. As discussed further below,

theseNon-GAAP measures exclude the amortization of acquired intangible assets, stock-based compensation expense, employee termination, asset impairment and other charges, acquisition-related charges, charges related to cost saving initiatives, manufacturing underutilization charges, convertible debt activity, debt extinguishment costs, other adjustments, and income tax adjustments, and the company believes these measures along with the related reconciliations to the GAAP measures provide additional detail and comparability for assessing the company’s results. TheseNon-GAAP measures are some of the primary indicators management uses for assessing the company’s performance and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

As described above, the company excludes the following items from itsNon-GAAP measures:

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

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

Employee termination, asset impairment and other charges. Fromtime-to-time, in order to realign the company’s operations with anticipated market demand or to achieve cost synergies from the integration of acquisitions, the company may terminate employees and/or restructure its operations. Fromtime-to-time, the company may also incur charges from the impairment of intangible assets and other long-lived assets. These charges (including any reversals of charges recorded in prior periods) are inconsistent in amount and frequency, and the company believes are not indicative of the underlying performance of its business.

Acquisition-related charges. In connection with the company’s business combinations, the company incurs expenses which it would not have otherwise incurred as part of its business operations. These expenses include third-party professional service and legal fees, third-party integration services, severance costs,non-cash adjustments to the fair value of acquired inventory, contract termination costs, and retention bonuses. The company may also experience other accounting impacts in connection with these transactions. These charges and impacts are related to acquisitions, are inconsistent in amount and frequency, and the company believes are not indicative of the underlying performance of its business.

Charges related to cost saving initiatives. In connection with the transformation of the company’s business, the company has incurred charges related to cost saving initiatives which do not qualify for special accounting treatment as exit or disposal activities. These charges, which the company believes are not indicative of the underlying performance of its business, primarily relate to costs associated with rationalizing the company’s channel partners or vendors, transforming the company’s information systems infrastructure, integrating the company’s product roadmap, and accelerated depreciation of assets.

Manufacturing underutilization charges. In response to the current flash business conditions, the company is reducing its wafer starts at its flash-based memory manufacturing facilities operated through its strategic partnership with Toshiba Memory Corporation (TMC). The temporary abnormal reduction in output has resulted in flash manufacturing underutilization charges which are expensed as incurred. These charges are inconsistent in amount and frequency, and the company believes these charges are not part of the ongoing operation of its business.

Convertible debt activity, net. The company excludesnon-cash economic interest expense associated with its convertible notes, the gains and losses on the conversion of its convertible senior notes and call option, and unrealized gains and losses related to the change in fair value of the exercise option and call option. These charges and gains and losses do not reflect the company’s operating results, and the company believes are not indicative of the underlying performance of its business.

Debt extinguishment costs. Fromtime-to-time, the company replaces its existing debt with new financing at more favorable interest rates or utilizes available capital to settle debt early, both of which generate interest savings in future periods. The company incurs debt extinguishment charges consisting of the costs to call the existing debt and/or thewrite-off of any related unamortized debt issuance costs. These gains and losses do not reflect the company’s operating results, and the company believes are not indicative of the underlying performance of its business.

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

Income tax adjustments. Income tax adjustments include the difference between income taxes based on a forecasted annualnon-GAAP tax rate and a forecasted annual GAAP tax rate as a result of the timing of certainnon-GAAPpre-tax adjustments. During the quarter, the company completed its accounting for the tax effects of the Tax Cuts and Jobs Act allowed within theone-year measurement period. The income tax adjustments include the company’s estimates related to the current status of the rules and regulations governing the transition to the Tax Cuts and Jobs Act. These adjustments are excluded because they are infrequent and the company believes that they are not indicative of the underlying performance of its business.