WESTERN DIGITAL CORPWDC

WESTERN DIGITAL CORP Leases Disclosure

10-KFiled Aug 14, 20252 min read
Leases and Other Commitments
Leases

The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2034. These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term.

The following table presents right-of-use lease assets and lease liabilities included in the Company’s Consolidated Balance Sheets:
June 27,
2025		June 28,
2024
(in millions)
Operating lease right-of-use assets (included in Other non-current assets)
$123 $143 
Operating lease liabilities:
Current portion of long-term operating lease liabilities (included in Accrued expenses)
31 28 
Long-term operating lease liabilities (included in Other liabilities)
110 133 
Total operating lease liabilities
$141 $161 

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:
202520242023
(in millions)
Cost of operating leases$33 $41 $49 
Cash paid for operating leases36 44 43 
Operating lease assets obtained in exchange for operating lease liabilities18 10 11 

The weighted average remaining lease term and discount rate for the Company’s operating leases were as follows:
June 27,
2025		June 28,
2024
Weighted average remaining lease term in years
6.16.6
Weighted average discount rate
5.0 %5.0 %
As of June 27, 2025, minimum lease payments were as follows:
Lease Amounts
(in millions)
2026$36 
202730 
202823 
202918 
203012 
Thereafter46 
Total future minimum lease payments165 
Less: imputed interest
24 
Present value of lease liabilities$141 

Purchase Agreements and Other Commitments

In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. As of June 27, 2025, the Company had the following minimum long-term commitments:
Long-term Commitments
(in millions)
2026$50 
202726 
Total$76 

Historical Timeline

Fiscal YearFiled
2025Aug 14, 2025Showing above
2024Aug 20, 2024
2023Aug 22, 2023
2022Aug 25, 2022
2021Aug 27, 2021
2020Aug 28, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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