Name: Western Digital Corp. (NASDAQ:WDC) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Western Digital Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Jun 30, 2023	Jul 1, 2022	Jul 2, 2021	Jul 3, 2020	Jun 28, 2019	Jun 29, 2018
Net income (loss)	(1,706)	1,500)	821)	(250)	(754)	675)
Depreciation and amortization	828)	929)	1,212)	1,566)	1,812)	2,056)
Stock-based compensation	318)	326)	318)	308)	306)	377)
Deferred income taxes	(34)	114)	(242)	(82)	374)	(348)
(Gain) loss on disposal of assets	(7)	(16)	(70)	(7)	39)	21)
Non-cash portion of asset impairment	19)	—)	—)	—)	—)	16)
Gain on business divestiture	—)	(9)	—)	—)	—)	—)
Amortization of debt issuance costs and discounts	13)	44)	40)	40)	38)	221)
Cash premium on extinguishment of debt	—)	—)	—)	—)	—)	720)
Other non-cash operating activities, net	71)	67)	(6)	6)	(8)	(19)
Accounts receivable, net	1,206)	(546)	121)	(1,175)	993)	(244)
Inventories	(60)	(22)	(546)	200)	(339)	(598)
Accounts payable	(459)	(129)	11)	192)	(588)	(15)
Accounts payable to related parties	(28)	(78)	(9)	75)	72)	53)
Accrued expenses	(352)	246)	257)	103)	(42)	(17)
Income taxes payable	130)	(74)	95)	81)	—)	—)
Accrued compensation	(162)	(123)	162)	124)	(135)	(26)
Other assets and liabilities, net	(185)	(349)	(266)	(357)	(221)	1,333)
Changes in assets and liabilities	90)	(1,075)	(175)	(757)	(260)	486)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations	1,298)	380)	1,077)	1,074)	2,301)	3,530)
Net cash provided by (used in) operating activities	(408)	1,880)	1,898)	824)	1,547)	4,205)
Purchases of property, plant and equipment	(821)	(1,122)	(1,146)	(647)	(876)	(835)
Proceeds from the sale of property, plant and equipment	14)	15)	143)	—)	119)	26)
Acquisitions, net of cash acquired	—)	—)	—)	(22)	—)	(100)
Proceeds from dispositions of business	—)	32)	—)	—)	—)	—)
Purchases of investments	—)	—)	—)	—)	(79)	(89)
Proceeds from sale of investments	—)	—)	—)	—)	175)	48)
Proceeds from maturities of investments	—)	—)	—)	—)	7)	19)
Notes receivable issuances to Flash Ventures	(627)	(809)	(541)	(353)	(1,364)	(1,313)
Notes receivable proceeds from Flash Ventures	641)	718)	772)	1,284)	766)	571)
Strategic investments and other, net	31)	(26)	7)	16)	(20)	18)
Net cash (used in) provided by investing activities	(762)	(1,192)	(765)	278)	(1,272)	(1,655)
Issuance of stock under employee stock plans	93)	122)	134)	141)	118)	220)
Taxes paid on vested stock awards under employee stock plans	(80)	(90)	(56)	(72)	(115)	(171)
Net proceeds from convertible preferred stock	881)	—)	—)	—)	—)	—)
Repurchases of common stock	—)	—)	—)	—)	(563)	(591)
Dividends paid to shareholders	—)	—)	—)	(595)	(584)	(593)
Repayment of government grants	—)	—)	(9)	—)	—)	—)
Settlement of debt hedge contracts	—)	—)	—)	—)	—)	28)
Repayment of debt	(1,180)	(3,621)	(886)	(982)	(181)	(17,074)
Proceeds from debt issuance	1,180)	1,894)	—)	—)	—)	13,840)
Borrowings from (repayment of) revolving credit facility	—)	—)	—)	—)	(500)	500)
Debt issuance costs	(19)	(23)	—)	—)	(4)	(59)
Net cash provided by (used in) financing activities	875)	(1,718)	(817)	(1,508)	(1,829)	(3,900)
Effect of exchange rate changes on cash	(9)	(13)	6)	(1)	4)	1)
Net increase (decrease) in cash and cash equivalents	(304)	(1,043)	322)	(407)	(1,550)	(1,349)
Cash and cash equivalents, beginning of year	2,327)	3,370)	3,048)	3,455)	5,005)	6,354)
Cash and cash equivalents, end of year	2,023)	2,327)	3,370)	3,048)	3,455)	5,005)

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).

The financial trajectory over the observed six-year period is characterized by significant volatility in earnings and a steady erosion of the total cash position. Net income exhibits extreme fluctuations, swinging from a peak of 1,500 million US dollars in 2022 to a loss of 1,706 million US dollars in 2023. This instability is mirrored in the net cash provided by operating activities, which declined from 4,205 million US dollars in 2018 to a negative 408 million US dollars in 2023, indicating a critical shift in the ability to generate cash from core business operations in the most recent fiscal year.

Operating Cash Flow Drivers: A consistent downward trend is observed in depreciation and amortization, falling from 2,056 million US dollars in 2018 to 828 million US dollars in 2023. Working capital management shows high variability; specifically, accounts receivable experienced a significant increase to 1,206 million US dollars in 2023, which acted as a primary drag on operating cash flow. Stock-based compensation has remained relatively stable, averaging approximately 320 million US dollars annually, providing a consistent non-cash offset to net income.
Investing Activities and Capital Expenditure: Investment in property, plant, and equipment remains a substantial and recurring cash outflow, typically ranging between 647 million and 1,146 million US dollars annually. This indicates a sustained commitment to infrastructure and capacity maintenance despite fluctuating profitability. Additionally, there is a recurring pattern of cash outflows for notes receivable issuances to Flash Ventures, partially offset by proceeds from those same notes, reflecting a complex strategic financing arrangement.
Financing and Debt Management: Financing activities have been dominated by debt repayment and restructuring. A massive debt repayment of 17,074 million US dollars occurred in 2018, largely offset by concurrent debt issuance of 13,840 million US dollars. In more recent years, the strategy shifted toward smaller repayments, with 2023 marking a transition to positive net cash from financing activities (875 million US dollars). This recent influx was driven by the issuance of convertible preferred stock (881 million US dollars) and new debt issuance (1,180 million US dollars), suggesting an increased reliance on external capital to sustain liquidity.
Liquidity and Cash Position: The overall liquidity position has weakened systematically over the period. Cash and cash equivalents decreased from a beginning balance of 6,354 million US dollars in 2018 to a closing balance of 2,023 million US dollars in 2023. The net decrease in cash is the result of combined pressures from operational losses in the final year, consistent capital expenditures, and the long-term repayment of debt obligations.

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