1. IDEMA Financial Conference Distribution Unwrapped Session Richard E. Rutledge Vice President & General Manager PC Components Member, IDEMA BOD November 4, 2004 Distribution Structure

2. WD Confidential 2 Customers 113,000Worldwide 37,000 Americas 44,000 EMEA 32,000 APAC Partners 77 WW (19 Americas, 35 EMEA, 23 APAC) CoverageCustomer Base Credit RiskCurrency Risk ConvenienceCommunication CollaborationCost-of-Sales Suppliers Products & Services Place & People Price & Programs Promotion Distribution Model: Focus On All Layers PUSH PULL

3. WD Confidential 3 Distribution Partners: Models & Balance Component Distributors Industrial Distributors Product Distributors

4. WD Confidential 4 Global Distribution: Know the Customer Key Indirect SelectWD Government Education SMB Business End Users Authorized Retailer Authorized Distributor Platinum Reseller Platinum Retailer Gold Reseller Platinum Integrator Gold Integrator Blue Integrator POS Western Digital Direct

5. WD Confidential 5 Global Distribution: Meet the Customer

6. WD Confidential 6 Global Distribution: Service the Customer Sao Paulo High Level Recovery Centers Customer Return Centers Budapest Seoul Beijing Shenzhen Singapore Dubai Moscow Sydney Mumbai New Dehli Bangalore Chennai Kolkata Suzhou Amsterdam Shanghai Los Angeles Toronto Call Centers

7. WD Confidential 7 Global Distribution: Manage the Programs n Distribution programs are not unique to HDDs or PC Components n McKinsey conclusion: transactional pricing increases profit Michael V. Marn, Eric V. Roegner, and Craig C. Zawada http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1269&L2=16&L3=19 The McKinsey Quarterly, 2003 A Price Waterfall Example, Light Bulbs

8. WD Confidential 8 Global Distribution: Understand the Dynamic Not linear or automatic but NOT random Weekly Sales Out Trends Within the Quarter Distribution Channel 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Wk 1Wk 2Wk 3Wk 4Wk 5Wk 6Wk 7Wk 8Wk 9Wk 10Wk 11Wk 12Wk 13 Week Within the Fiscal Quarter Cumulative Percentage of Units Sold Perfect Linearity

9. IDEMA Financial Conference Distribution Unwrapped Session Richard E. Rutledge Vice President & General Manager PC Components Member, IDEMA BOD November 4, 2004 Distribution Structure