western digital third quarter of fiscal 2019 earnings

4/29/19©2019WesternDigitalCorporationoritsaffiliates.Allrightsreserved. 1

Third Quarter of Fiscal 2019 Earnings Presentation

©2019WesternDigitalCorporationoritsaffiliates.Allrightsreserved.

April29,2019


Forward-Looking StatementsSafe Harbor | Disclaimers

Thispresentationcontainsforward-lookingstatementsthatinvolverisksanduncertainties,including,butnotlimitedto,statementsregardingourproductandtechnologyportfolio;marketpositioning;businessstrategiesandgrowthopportunities;ourexpectedfuturefinancialperformance;costsavinginitiatives;restructuringactivities;andmarketandflashindustrytrends.Forward-lookingstatementsshouldnotbereadasaguaranteeoffutureperformanceorresults,andwillnotnecessarilybeaccurateindicationsofthetimesat,orby,whichsuchperformanceorresultswillbeachieved,ifatall.Forward-lookingstatementsaresubjecttorisksanduncertaintiesthatcouldcauseactualperformanceorresultstodiffermateriallyfromthoseexpressedinorsuggestedbytheforward-lookingstatements.

Keyrisksanduncertaintiesincludevolatilityinglobaleconomicconditions;businessconditionsandgrowthinthestorageecosystem;impactofrestructuringactivitiesandcostsavinginitiatives;impactofcompetitiveproductsandpricing;marketacceptanceandcostofcommoditymaterialsandspecializedproductcomponents;actionsbycompetitors;unexpectedadvancesincompetingtechnologies;ourdevelopmentandintroductionofproductsbasedonnewtechnologiesandexpansionintonewdatastoragemarkets;risksassociatedwithacquisitions,mergersandjointventures;difficultiesordelaysinmanufacturing;theoutcomeoflegalproceedings;andotherrisksanduncertaintieslistedinthecompany’sfilingswiththeSecuritiesandExchangeCommission(the“SEC”)andavailableontheSEC’swebsiteatwww.sec.gov,includingourmostrecentlyfiledperiodicreport,towhichyourattentionisdirected.Wedonotundertakeanyobligationtopubliclyupdateorreviseanyforward-lookingstatement, whetherasaresultofnewinformation,futuredevelopmentsorotherwise,exceptasrequiredbylaw.

Thispresentationincludesreferencestonon-GAAPfinancialmeasures.Reconciliationsofthedifferencesbetweenthenon-GAAPmeasuresprovidedinthispresentationtothecomparableGAAPfinancialmeasuresareincludedintheappendixandintheInvestorRelationssectionofourwebsite.Wehave notfullyreconciledournon-GAAPfinancialmeasureguidancetothemostdirectlycomparableGAAPmeasuresbecausematerialitemsthatimpactthesemeasuresarenotinourcontroland/orcannotbereasonablypredicted.Accordingly,afullreconciliationofthenon-GAAPfinancialmeasureguidancetothecorrespondingGAAPmeasuresisnotavailablewithoutunreasonableeffort.


Executive Summary

• Incrementalimprovementindemandforcapacityenterpriseandclientcompute• Flashindustrydynamicsremainchallenging• ExpectingbothflashandHDDdemandtofurtherimproveforthebalanceofCY19

RESULTSGENERALLYCONSISTENTWITHOUREXPECTATIONS

EXECUTINGWELLTOCOSTANDEXPENSEREDUCTIONPLANS• Ontracktoachieveprojectednon-GAAPoperatingexpensereductionsbySeptember2019quarterandnon-GAAPcostreductionsexitingtheDecember2019quarter

WELLPOSITIONEDTOEMERGESTRONGER• Significantexpansionofproductportfolio,deepercustomerengagementandrightsizedmanufacturingfootprint

PRODUCTPORTFOLIOSTRONGESTINOURHISTORY

• CapacityEnterprise—continuetoleadinarealdensityandcapacitypoints

• Leadingtheindustry’stransitionto14TBcapacity• Ontracktolaunch16TBand18TBenergyassistedrecordingdrivesinCY19

• BeganshipmentsofinternallydevelopedBiCS4NVMeclientSSDsandBiCS3NVMe enterpriseSSDs

• Leadingtheindustry’stransitiontoBiCS4technology• BiCS4tobecomehighestvolumerunnerintermsofflashoutputinsecondhalfofCY19

FLASH HDD


Financial Results

Revenue

$3.7BOperatingcashflow

$204M

Non-GAAP

Grossmargin

25.3%*

Non-GAAP

EPS

$0.17*

SeeAppendixforreconciliationsofGAAPtoNon-GAAPfinancialmeasures.

*Includestheimpactassociatedwithlowerofcostormarketinventoryreservesofa300basispointreductiontogrossmargin and$0.37reductiontonon-GAAPEPS.


$2,214$1,625

$945

$804

$1,074

$1,245

$4,233

$3,674

Q2FY19 Q3FY19

$(M)

ClientDevices ClientSolutions DataCenterDevices&Solutions

Revenue Mix

CLIENTDEVICES• Mobileembeddedrevenuedeclinedduetoweak

handsetdemand• Notebookanddesktoprevenuedecreaseddueto

seasonalityandflashpricedeclines

CLIENTSOLUTIONS• Continuetoexpandourpresenceinexternal

SSDssoldthroughretail• Averagecapacityperunitforflashdevicesgrew

44%year-over-year

DATACENTERDEVICES&SOLUTIONS• Demandforcapacityenterprisedrivesbetterthan

expected• InitialrevenueshipmentsofenterpriseNVMe SSD

solutionsandontracktoacceleraterampthroughoutCY19

$Millions


$4,130

$3,801

$204 ($314)

($146)($73)

Q2FY19 OperatingCashFlow Capex Dividend Other Q3FY19

CashFlow($Millions)

Cash&MarketableSecurities

Cash&MarketableSecurities

Cash Flow Walk

(1)CAPEXincludespurchasesofproperty,plantandequipment,net,andtheactivityrelatedtoFlashVentures,net(2)Otherprimarilyconsistsofemployeestockplans,net,repaymentofdebtandotherinvestingactivities


Non-GAAP Financial Results

$ Millions,exceptEPS Q3FY19 Q2FY19 Q3FY18

Revenue $3,674 $4,233 $5,013

GrossMargin%* 25.3%* 31.3% 43.4%

OperatingExpenses $742 $738 $850

OperatingIncome $186 $589 $1,324

InterestandOtherExpense,net $88 $93 $137

EPS* $0.17* $1.45 $3.63

OperatingCash Flow $204 $469 $1,027

FreeCash Flow ($110) $24 $616

Q/Q Y/Y

(13%) (27%)

~(600)BPS ~(1800)BPS

~Flat (13%)

(68%) (86%)

(5%) (36%)

(88%) (95%)

(57%) (80%)

NM NM

ForreconciliationsofGAAPtoNon-GAAPfinancialmeasures,seetheAppendixandQuarterlyFactSheet.*Includestheimpactassociatedwithlowerofcostormarketinventoryreservesofa300basispointreductiontogrossmarginand$0.37reductiontonon-GAAPEPS.


Quarterly Fact SheetAmounts in millions, except Average Selling Price (ASP), percentages, and working capital-related metrics

THREEMONTHSENDED3/30/2018 6/29/2018 9/28/2018 12/28/2018 3/29/2019

REVENUEClientDevices1 $2,311 $2,474 $2,650 $2,214 $1,625

ClientSolutions1 1,042 1,031 932 945 804DataCenterDevices&Solutions1 1,660 1,612 1,446 1,074 1,245

TotalRevenue $5,013 $5,117 $5,028 $4,233 $3,674EXABYTEMETRICS

Q/QChangeinHDDExabytesSold2 7% 6% (6%) (17%) 13%Q/QChangeinFlashExabytesSold2 (10%) 9% 28% 5% (5%)Q/QChangeinTotalExabytesSold2 5% 6% (3%) (15%) 11%

TECHNOLOGYHDDRevenue $2,640 $2,754 $2,494 $2,060 $2,064FlashRevenue $2,373 $2,363 $2,534 $2,173 $1,610

HDDNon-GAAPGrossMargin3 33% 32% 32% 27% 29%FlashNon-GAAPGrossMargin3 55% 51% 44% 35% 21%TotalNon-GAAPGrossMargin3 43.4% 41.0% 38.0% 31.3% 25.3%

CASHCashandCashEquivalents $4,963 $5,005 $4,646 $4,013 $3,682

Available-for-Sale(AFS)Securities 113 116 116 117 119TotalCash,CashEquivalents,andAFSSecurities $5,076 $5,121 $4,762 $4,130 $3,801

CASHFLOWSCashFlowsprovidedbyOperatingActivities $1,027 $863 $705 $469 $204

PurchasesofProperty,PlantandEquipment,net (213) (190) (277) (220) (222)ActivityRelatedtoFlashVentures,net (198) (35) 29 (225) (92)

FreeCashFlow4 $616 $638 $457 $24 $(110)WORKINGCAPITALRELATED

DaysSalesOutstanding 36 39 40 37 30DaysInventoryOutstanding 79 82 84 98 101DaysPayablesOutstanding (71) (70) (64) (64) (55)

CashConversionCycle 44 51 60 71 76FLASHMETRICS

Q/QChangeinASP/Gigabytes2 (2%) (8%) (16%) (18%) (23%)HDDMETRICS

ClientComputeUnits5 17.6 17.8 16.3 14.0 12.9Non-ComputeUnits6 11.2 13.7 11.2 11.1 9.3DataCenterUnits7 7.6 7.5 6.6 5.1 5.6TotalHDDUnits8 36.4 39.0 34.1 30.2 27.8

HDDASP9 $72 $70 $72 $67 $73


Quarterly Fact Sheet FootnotesFORMULAS

DaysSalesOutstanding(DSO) =AccountsReceivable/(Revenue/91days)

DaysInventoryOutstanding(DIO) =Inventories/(CostofRevenue/91days)

DaysPayablesOutstanding(DPO) =AccountsPayable(includingAccountsPayabletoRelatedParties)/(CostofRevenue/91days)

CashConversionCycle =DSO+DIO– DPO

FOOTNOTES

� ClientDevicesiscomprisedofnotebookanddesktopHDD,consumerelectronicsHDD,clientSSD,embedded,wafersalesandlicensingandroyalties.ClientSolutionsiscomprisedofbrandedHDD,brandedflash,removablesandlicensingandroyalties.DataCenterDevicesandSolutionsiscomprisedofenterpriseHDD,enterpriseSSD, datacentersoftware,datacentersolutionsandlicensingandroyalties.

� Excludeslicensing,royalties,andnon-memoryproducts.

� RefertotheGAAPtonon-GAAPreconciliationslideswithintheAppendixforfurtherdetails.

� Freecashflowisanon-GAAPfinancialmeasuredefinedascashflowsprovided byoperatingactivities lesspurchasesofproperty,plantandequipment,netofproceedsfromsalesofproperty,plantandequipment,andtheactivityrelatedtoFlashVentures,net.Weconsiderfreecashflowtobeusefulasanindicatorofouroverallliquidity,astheamountoffreecashflowgeneratedinanyperiodisrepresentativeofcashthatisavailableforstrategicopportunitiesorotherbusinesspurposesincluding,amongothers,investinginthecompany'sbusiness,makingstrategicacquisitions,strengtheningthebalancesheet,repayingdebt,payingdividendsandrepurchasingstock.FreecashflowisnotanalternativeformeasurespreparedinaccordancewithGAAPandmaybedifferentfromnon-GAAPfreecashflowmeasuresusedbyothercompanies.

� ClientcomputeproductsconsistprimarilyofdesktopandnotebookHDDs,excludingthosesoldthroughretailchannels.

� Non-computeproductsconsistofretailchannelandconsumerelectronicsHDDs.

� DatacenterproductsconsistofenterpriseHDDs(high-capacityandperformance)andenterprisesystems.

� HDDUnitvolumeexcludesdatastoragesystemsandmedia.

� HDDASPiscalculatedbydividingHDDrevenuebyHDDunits.Datastoragesystemsareexcludedfromthiscalculation,asdatastoragesystemsASPismeasuredonapersystembasisratherthanaperdrivebasis.


Debt Tranches and Interest RatesDebt BaseRate Maturity

PrincipalBalanceOutstandingasof

3/29/2019(inmillions)ApplicableRatesA

ConvertibleDebtDue2020B 0.500% October15,2020 35 0.500%

RevolverdrawnC,D L+150 February27,2023 0 3.999%

TermLoanA-1D L+150 February27,2023 4,896 3.879%E

TermLoanB-4D L+175 April29,2023 2,431 4.249%

ConvertibleDebtDue2024F 1.500% February1,2024 1,100 1.500%

Sr.UnsecuredNotesDue2026G 4.750% February15,2026 2,300 4.750%

TOTAL $10,762 3.895%H

A. All-inapplicableratesasofMarch29,2019.ApplicablespreadforTermLoanA-1andRevolveroverLIBORbasedoncreditratingsasofMarch29,2019.

B. DebtassumedinconnectionwiththeacquisitionofSanDiskCorporationinMay2016.

C. Revolvercapacity:$2.25billion,noneofwhichwasdrawnasofMarch29,2019.

D. TermLoanA-1,TermLoanB-4,andRevolverhaveaLIBORfloorof0bps.

E. ReflectsimpactoftheinterestrateswapsthateffectivelyfixLIBORon$2billionoffloating-ratedebtat2.21%throughMay2020and2.60%throughFebruary2023.

F. Initialconversionpriceof$121.91pershare.NotesarecallablebeginningFebruary5,2021.

G. NotesarecallablebeginningNovember15,2025.

H. Weightedaverageinterestrate,includingimpactofinterestrateswaps,basedonprincipalbalancesoutstandingasofMarch29, 2019.


GAAP to Non-GAAP Reconciliation In millions; unaudited

THREEMONTHSENDED3/30/2018 12/28/2018 3/29/2019

GAAPCOSTOFREVENUE $3,086 $3,189 $3,095Amortizationofacquiredintangibleassets (235) (215) (188)Stock-basedcompensationexpense (11) (13) (13)Chargesrelatedtocostsavinginitiatives (1) (6) -Manufacturingunderutilizationcharges - (49) (148)NON-GAAPCOSTOFREVENUE $2,839 $2,906 $2,746

GAAPGROSSPROFIT $1,927 $1,044 $579Amortizationofacquiredintangibleassets 235 215 188Stock-basedcompensationexpense 11 13 13Chargesrelatedtocostsavinginitiatives 1 6 -Manufacturingunderutilizationcharges - 49 148NON-GAAPGROSSPROFIT $2,174 $1,327 $928

GAAPOPERATINGEXPENSES $1,013 $868 $973Amortizationofacquiredintangibleassets (41) (41) (41)Stock-basedcompensationexpense (91) (66) (71)Employeetermination,assetimpairmentandothercharges (35) (20) (76)Acquisition-relatedcharges (2) - -Chargesrelatedtocostsavinginitiatives 3 (2) (3)Other 3 (1) (40)NON-GAAPOPERATINGEXPENSES $850 $738 $742

GAAPOPERATINGINCOME(LOSS) $914 $176 $(394)Costofrevenueadjustments 247 283 349Operatingexpenseadjustments 163 130 231NON-GAAPOPERATINGINCOME $1,324 $589 $186

GAAPINTERESTANDOTHEREXPENSE,NET $(1,042) $(95) $(83)Convertibledebtactivity,net 3 6 7Debtextinguishmentcosts 894 - -Other 8 (4) (12)NON-GAAPINTERESTANDOTHEREXPENSE,NET $(137) $(93) $(88)

GAAPINCOMETAXEXPENSE(BENEFIT) $(189) $568 $104Incometaxadjustments 259 (496) (55)NON-GAAPINCOMETAXEXPENSE $70 $72 $49


GAAP to Non-GAAP Reconciliation In millions, except EPS and percentages; unaudited

THREEMONTHSENDED

3/30/2018 12/28/2018 3/29/2019GAAPNETINCOME(LOSS) $61 $(487) $(581)Amortizationofacquiredintangibleassets 276 256 229Stock-basedcompensationexpense 102 79 84Employeetermination,assetimpairmentandothercharges 35 20 76Acquisition-relatedcharges 2 - -Chargesrelatedtocostsavinginitiatives (2) 8 3Manufacturingunderutilizationcharges - 49 148Convertibledebtactivity,net 3 6 7Debtextinguishmentcosts 894 - -Other 5 (3) 28Incometaxadjustments (259) 496 55NON-GAAPNETINCOME $1,117 $424 $49

DILUTEDINCOME(LOSS)PERCOMMONSHAREGAAP $ 0.20 $(1.68) $(1.99)Non-GAAP $ 3.63 $1.45 $ 0.17

DILUTEDWEIGHTEDAVERAGESHARESOUTSTANDINGGAAP 308 290 292Non-GAAP 308 293 294

THREEMONTHSENDED*3/30/2018 6/29/2018 9/28/2018 12/28/2018 3/29/2019

GAAPGROSSMARGIN 38.4% 36.2% 33.1% 24.7% 15.8%Amortizationofacquiredintangibleassets 4.7% 4.6% 4.7% 5.1% 5.1%Stock-basedcompensationexpense 0.2% 0.2% 0.2% 0.3% 0.4%Chargesrelatedtocostsavinginitiatives 0.1% 0.0% 0.0% 0.1% -Manufacturingunderutilizationcharges - - - 1.1% 4.0%NON-GAAPGROSSMARGIN 43.4% 41.0% 38.0% 31.3% 25.3%

HDDnon-GAAPgrossmargin 33% 32% 32% 27% 29%Flashnon-GAAPgrossmargin 55% 51% 44% 35% 21%NON-GAAPGROSSMARGIN 43.4% 41.0% 38.0% 31.3% 25.3%

*GAAPgrossmarginiscalculatedbydividingGAAPgrossprofitbyrevenue.Non-GAAPgrossmarginiscalculatedbydividingnon-GAAPgrossprofitbyrevenue.HDDnon-GAAPgrossmarginiscalculatedbydividingHDDnon-GAAPgrossprofitbyHDDrevenue.Flashnon-GAAPgrossmarginiscalculatedbydividingFlashnon-GAAPgrossprofitbyFlashrevenue.


Footnotes for GAAP to Non-GAAP ReconciliationThispresentationcontainsthefollowingfinancialmeasuresthatarenotinaccordancewithU.S.generallyacceptedaccountingprinciples(“GAAP”):non-GAAPcostofrevenue;non-GAAPgrossprofit;non-GAAPoperatingexpenses;non-GAAPoperatingincome;non-GAAPinterestandotherexpense,net;non-GAAPincometaxexpense;non-GAAPnetincome;non-GAAPdilutedincomepercommonshare;andnon-GAAPgrossmargin(“Non-GAAPmeasures”).TheseNon-GAAPmeasuresarenotinaccordancewith,oranalternativefor,measurespreparedinaccordancewithGAAPandmaybedifferentfromNon-GAAPmeasuresusedbyothercompanies.ThecompanybelievesthepresentationoftheseNon-GAAPmeasures,whenshowninconjunctionwiththecorrespondingGAAPmeasures,providesusefulinformationtoinvestorsformeasuring thecompany’searningsperformanceandcomparingitagainstpriorperiods.Specifically,thecompanybelievestheseNon-GAAPmeasuresprovideusefulinformationtobothmanagementandinvestorsastheyexcludecertainexpenses,gainsandlossesthatthecompanybelievesarenotindicativeofitscoreoperatingresultsorbecausetheyareconsistentwiththefinancialmodelsandestimatespublishedbymanyanalystswhofollowthecompanyanditspeers.Asdiscussedfurtherbelow,theseNon-GAAPmeasuresexcludetheamortizationofacquiredintangibleassets,stock-basedcompensationexpense,employeetermination,assetimpairmentandothercharges,acquisition-relatedcharges,chargesrelatedtocostsavinginitiatives,manufacturingunderutilizationcharges,convertibledebtactivity,debtextinguishmentcosts,otheradjustments,andincometaxadjustments,andthecompanybelievesthesemeasuresalongwiththerelatedreconciliationstotheGAAPmeasuresprovideadditionaldetailandcomparabilityforassessingthecompany'sresults.TheseNon-GAAPmeasuresaresomeoftheprimaryindicatorsmanagementusesforassessingthecompany'sperformanceandplanningandforecastingfutureperiods.ThesemeasuresshouldbeconsideredinadditiontoresultspreparedinaccordancewithGAAP,butshouldnotbeconsideredasubstitutefor,orsuperiorto,GAAPresults.Asdescribedabove,thecompanyexcludesthefollowingitemsfromitsNon-GAAPmeasures:Amortizationofacquiredintangibleassets.Thecompanyincursexpensesfromtheamortizationofacquiredintangibleassetsovertheireconomiclives.Suchchargesaresignificantlyimpactedbythetimingandmagnitudeofthecompany'sacquisitionsandanyrelatedimpairmentcharges.

Stock-basedcompensationexpense.Becauseofthevarietyofequityawardsusedbycompanies,thevaryingmethodologiesfordeterminingstock-basedcompensationexpense,thesubjectiveassumptionsinvolvedinthosedeterminations,andthevolatilityinvaluationsthatcanbedrivenbymarketconditionsoutsidethecompany'scontrol,thecompanybelievesexcludingstock-basedcompensationexpenseenhancestheabilityofmanagementandinvestorstounderstandandassesstheunderlyingperformanceofitsbusinessovertimeandcompareitagainstthecompany'speers,amajorityofwhomalsoexcludestock-basedcompensationfromtheirnon-GAAPresults.Employeetermination,assetimpairmentandothercharges.Fromtime-to-time,inordertorealignthecompany'soperationswithanticipatedmarketdemandortoachievecostsynergiesfrom theintegrationofacquisitions,thecompanymayterminateemployeesand/orrestructureitsoperations.Fromtime-to-time,thecompanymayalsoincurchargesfromtheimpairmentofintangibleassetsandotherlong-livedassets.Thesecharges(includinganyreversalsofchargesrecordedinpriorperiods)areinconsistentinamountandfrequency,andthecompanybelievesarenotindicativeoftheunderlyingperformanceofitsbusiness.

Acquisition-relatedcharges.Inconnectionwiththecompany'sbusinesscombinations,thecompanyincursexpenseswhichitwouldnothaveotherwiseincurredaspartofitsbusinessoperations.Theseexpensesincludethird-partyprofessionalserviceandlegalfees,third-partyintegrationservices,severancecosts,non-cashadjustmentstothefairvalueofacquiredinventory,contractterminationcosts,andretentionbonuses.Thecompanymayalsoexperienceotheraccountingimpactsinconnectionwiththesetransactions.Thesechargesandimpactsarerelatedtoacquisitions,areinconsistentinamountandfrequency,andthecompanybelievesarenotindicativeoftheunderlyingperformanceofitsbusiness.

Chargesrelatedtocostsavinginitiatives.Inconnectionwiththetransformationofthecompany'sbusinesscombinations,thecompanyhasincurredchargesrelatedtocostsavinginitiativeswhichdonotqualifyforspecialaccountingtreatmentasexitordisposalactivities.Thesecharges,whichthecompanybelievesarenotindicativeoftheunderlyingperformanceofitsbusiness,primarilyrelatetocostsassociatedwithrationalizingthecompany'schannelpartnersorvendors,transformingthecompany'sinformationsystemsinfrastructure,integratingthecompany'sproductroadmap,andaccelerateddepreciationofassets.

Manufacturingunderutilizationcharges.Inresponsetothecurrentflashbusinessconditions,thecompanyisreducingitswaferstartsatitsflash-basedmemorymanufacturingfacilitiesoperatedthroughitsstrategicpartnershipwithToshibaMemoryCorporation(TMC).Thetemporaryabnormalreductioninoutputhasresultedinflashmanufacturingunderutilizationchargeswhichareexpensedasincurred.Thesechargesareinconsistentinamountandfrequency,andthecompanybelievesthesechargesarenotpartoftheongoingoperationofitsbusiness.Convertibledebtactivity,net.Thecompanyexcludesnon-casheconomicinterestexpenseassociatedwithitsconvertiblenotes,thegainsandlossesontheconversionofitsconvertibleseniornotesandcalloption,andunrealizedgainsandlossesrelatedtothechangeinfairvalueoftheexerciseoptionandcalloption.Thesechargesandgainsandlossesdonotreflectthecompany'soperatingresults,andthecompanybelievesarenotindicativeoftheunderlyingperformanceofitsbusiness.

Debtextinguishmentcosts.Fromtime-to-time,thecompanyreplacesitsexistingdebtwithnewfinancingatmorefavorableinterestratesorutilizesavailablecapitaltosettledebtearly,bothofwhichgenerateinterestsavingsinfutureperiods.Thecompanyincursdebtextinguishmentchargesconsistingofthecoststocalltheexistingdebtand/orthewrite-offofanyrelatedunamortizeddebtissuancecosts.Thesegainsandlossesdonotreflectthecompany’soperatingresults,andthecompanybelievesarenotindicativeoftheunderlyingperformanceofitsbusiness.

Otheradjustments.Fromtime-to-time,thecompanysellsorimpairsinvestmentsorotherassetswhicharenotconsiderednecessarytoitsbusinessoperations,orincursotherchargesorgainsthatthecompanybelievesarenotapartoftheongoingoperationofitsbusiness.Theresultingexpenseorbenefitisinconsistentinamountandfrequency.

Incometaxadjustments.Incometaxadjustmentsincludethedifferencebetweenincometaxesbasedonaforecastedannualnon-GAAPtaxrateandaforecastedannualGAAPtaxrateasaresultofthetimingofcertainnon-GAAPpre-taxadjustments.Theincometaxadjustmentsincludethecompany’sfinaladjustmentsforthetaxeffectsoftheTaxCutsandJobsAct allowedwithintheone-yearmeasurementperiodthatendedonDecember22,2018,aswellasestimatesrelatedtothecurrentstatusoftherulesandregulationsgoverningthetransitiontotheTaxCutsandJobsAct.Theseadjustmentsareexcludedbecausetheyareinfrequentandthecompanybelievesthattheyarenotindicativeoftheunderlyingperformanceofitsbusiness.

western digital third quarter of fiscal 2019 earnings

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