What did WDC shareholders receive in the Sandisk spin-off?

Each WDC stockholder of record as of 1:00 p.m. Pacific time on February 12, 2025 received one-third of one share of Sandisk common stock for each share of WDC common stock held. Sandisk began trading on Nasdaq under the symbol SNDK after the distribution became effective at 11:59 p.m. Pacific time on February 21, 2025.

How much of Sandisk does Western Digital still own, and how will it be accounted for?

WDC retains 19.9% of Sandisk's outstanding common stock. The retained stake was recorded at 19.9% of Sandisk's net carrying value as of the separation date, which the pro forma balance sheet shows as $2,362 million. Going forward, WDC will carry this investment at fair value, with changes recorded in current-period earnings, which could introduce earnings volatility.

How will the separation affect Western Digital's debt and cash position?

Sandisk raised $2,000 million of incremental borrowings at separation and used part of the proceeds to pay WDC a special dividend, leaving WDC with approximately $1,445 million of net incremental cash. WDC amended its credit facilities and intends to use these proceeds to partially pay down long-term debt. The pro forma balance sheet shows cash of $1,487 million and long-term debt of $5,786 million, compared with $2,291 million and $7,216 million historically.

Why does the pro forma financial information differ so much from reported results?

The pro forma statements remove Sandisk's results, which were historically consolidated, and present WDC as if the separation had occurred earlier, reclassifying Sandisk as discontinued operations. As a result, pro forma revenue for fiscal 2024 is $6,317 million versus $13,003 million reported. The statements are illustrative only, not indicative of future results, and may change once discontinued operations accounting is finalized in the fiscal 2025 Form 10-K.

What are the management adjustments, and should investors rely on them?

Management adjusts for expected labor-based reductions in corporate overhead ($78 million for the six months ended December 27, 2024 and $270 million for fiscal 2024) that WDC does not plan to backfill after the separation. These adjustments raise pro forma diluted EPS to $1.97 for the six months and reduce the fiscal 2024 loss to $1.62 per share. They are management estimates that include forward-looking information, so investors should treat them with caution and verify actual cost reductions in future reported results.

WDC 8-K SEC Disclosure — Feb 26, 2025

01—Abstract

Summary

Summary of the 8-K/A filed February 26, 2025. Cited figures are marked; the original filing is the authoritative source.

Western Digital (WDC) completed the separation of its flash business into an independent public company, Sandisk Corporation (NASDAQ: SNDK), effective February 21, 2025, via a spin-off in which WDC stockholders received one-third of one Sandisk share for each WDC share held as of the February 12, 2025 record date.

WDC retains a 19.9%^a stake in Sandisk, which it will carry at fair value going forward, and will no longer consolidate Sandisk's financial results. This 8-K/A amendment was filed solely to add unaudited pro forma financial information, and it does not otherwise revise the February 24, 2025 8-K. On a pro forma basis, WDC becomes a substantially smaller company.

For the six months ended December 27, 2024, pro forma revenue is $4,621 million^b versus $8,380 million reported historically, and pro forma net income from continuing operations attributable to common shareholders is $634 million. For fiscal 2024 (year ended June 28, 2024), pro forma revenue is $6,317 million versus $13,003 million reported, and the pro forma net loss attributable to common shareholders is $789 million. Pro forma total assets fall to $14,762 million from $25,456 million, and pro forma total debt is reduced through the application of about $1,445 million of net incremental cash from Sandisk, which WDC intends to use to partially extinguish long-term debt.

Pro forma long-term debt declines to $5,786 million^c from $7,216 million. Investors should note that the pro forma figures are illustrative, preliminary, and subject to change as discontinued operations accounting is finalized for the fiscal 2025 Form 10-K.

Management also presents adjustments for labor-based corporate overhead reductions ($78 million^d for the six months ended December 27, 2024 and $270 million for fiscal 2024) that WDC does not intend to backfill. After these management adjustments, pro forma earnings per diluted share would be $1.97 for the six months and a loss of $1.62 for fiscal 2024, though these adjusted measures are non-GAAP-style estimates and are not audited.

02—Key points

Key Highlights

Completed separation of Sandisk (flash business) effective February 21, 2025, distributing 1/3 share of SNDK for each WDC share held as of the February 12, 2025 record date.
WDC retains 19.9% of Sandisk common stock, recorded at $2,362 million on the pro forma balance sheet and to be carried at fair value with changes flowing through earnings.
WDC will no longer consolidate Sandisk, so pro forma revenue drops to $4,621 million for the six months ended December 27, 2024 (vs. $8,380 million reported) and to $6,317 million for fiscal 2024 (vs. $13,003 million reported).
Pro forma total assets decrease to $14,762 million from $25,456 million, and pro forma shareholders' equity is $4,583 million, down from $12,117 million.
Approximately $1,445 million of net incremental cash received from Sandisk, funded partly by $2,000 million of Sandisk borrowings, is expected to partially extinguish WDC's long-term debt; pro forma long-term debt falls to $5,786 million from $7,216 million.
Pro forma net income from continuing operations attributable to common shareholders is $634 million for the six months ended December 27, 2024, but a loss of $789 million for fiscal 2024.
Figures are preliminary and unaudited; management's labor-based overhead reduction adjustments ($78 million and $270 million) are estimates and may change in the fiscal 2025 Form 10-K.

03—Questions

Frequently Asked Questions

What did WDC shareholders receive in the Sandisk spin-off?
Each WDC stockholder of record as of 1:00 p.m. Pacific time on February 12, 2025 received one-third of one share of Sandisk common stock for each share of WDC common stock held. Sandisk began trading on Nasdaq under the symbol SNDK after the distribution became effective at 11:59 p.m. Pacific time on February 21, 2025.
How much of Sandisk does Western Digital still own, and how will it be accounted for?
WDC retains 19.9% of Sandisk's outstanding common stock. The retained stake was recorded at 19.9% of Sandisk's net carrying value as of the separation date, which the pro forma balance sheet shows as $2,362 million. Going forward, WDC will carry this investment at fair value, with changes recorded in current-period earnings, which could introduce earnings volatility.
How will the separation affect Western Digital's debt and cash position?
Sandisk raised $2,000 million of incremental borrowings at separation and used part of the proceeds to pay WDC a special dividend, leaving WDC with approximately $1,445 million of net incremental cash. WDC amended its credit facilities and intends to use these proceeds to partially pay down long-term debt. The pro forma balance sheet shows cash of $1,487 million and long-term debt of $5,786 million, compared with $2,291 million and $7,216 million historically.
Why does the pro forma financial information differ so much from reported results?
The pro forma statements remove Sandisk's results, which were historically consolidated, and present WDC as if the separation had occurred earlier, reclassifying Sandisk as discontinued operations. As a result, pro forma revenue for fiscal 2024 is $6,317 million versus $13,003 million reported. The statements are illustrative only, not indicative of future results, and may change once discontinued operations accounting is finalized in the fiscal 2025 Form 10-K.
What are the management adjustments, and should investors rely on them?
Management adjusts for expected labor-based reductions in corporate overhead ($78 million for the six months ended December 27, 2024 and $270 million for fiscal 2024) that WDC does not plan to backfill after the separation. These adjustments raise pro forma diluted EPS to $1.97 for the six months and reduce the fiscal 2024 loss to $1.62 per share. They are management estimates that include forward-looking information, so investors should treat them with caution and verify actual cost reductions in future reported results.

04—Continue

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