Analysis of Debt
Total Debt (Carrying Amount)
Western Digital Corp., balance sheet: debt
US$ in millions
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).
A consistent deleveraging trend is evident from June 2018 through June 2023. Total long-term debt, including the current portion, decreased from US$ 11,172 million to US$ 7,070 million, representing an overall reduction of approximately 36.7% over the observed period. This downward trajectory remained steady until June 2022, followed by a marginal increase of US$ 48 million in the final year.
- Long-term Debt Trajectory
- The non-current portion of long-term debt exhibited a continuous decline every year of the reporting period. Debt levels dropped from US$ 10,993 million in 2018 to US$ 5,857 million by June 2023. This sustained reduction suggests a strategic focus on paying down long-term obligations or a lack of new long-term borrowing to replace maturing notes.
- Debt Maturity Profile Shift
- A significant shift in the debt composition occurred in the final year of the analysis. While the current portion of long-term debt remained relatively low and stable between 2018 and 2021 (ranging from US$ 179 million to US$ 286 million), it surged to US$ 1,213 million by June 30, 2023. This represents a substantial increase in short-term repayment obligations.
- Analysis of Current Liabilities
- The sharp increase in the current portion of long-term debt in 2023 indicates that a large volume of previously long-term debt has moved into the current maturity window. Consequently, while the total carrying amount of debt remained relatively flat between 2022 and 2023, the liquidity requirement has increased significantly due to the higher proportion of debt maturing within the next twelve months.
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Total Debt (Fair Value)
| Jun 30, 2023 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Financial instruments | 6,692) |
| Revolving credit facility maturing 2023 | —) |
| Total long-term debt, including current portion (fair value) | 6,692) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.95 |
Based on: 10-K (reporting date: 2023-06-30).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 4.68%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 1.50% | 1,100) | 17) | |
| 4.75% | 2,300) | 109) | |
| 6.56% | 2,700) | 177) | |
| 2.85% | 500) | 14) | |
| 3.10% | 500) | 16) | |
| Total | 7,100) | 333) | |
| 4.68% | |||
Based on: 10-K (reporting date: 2023-06-30).
1 US$ in millions
2 Weighted-average interest rate = 100 × 333 ÷ 7,100 = 4.68%