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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
loan facilities consisting of a $2.3 billion term loan facility and a $500 million revolving credit facility. On January 9,
2014, WDI used existing cash to repay the outstanding term loan balance of $1.8 billion under the Prior Credit
Facility, and the Company, WDT and WDI, entered into a new credit agreement with JPMorgan Chase Bank, N.A.,
as administrative agent, and the lenders party thereto (the “Credit Agreement”); WDT paid the outstanding revolving
credit facility balance of $500 million under the Prior Credit Facility; and the Company terminated the Prior Credit
Facility. In connection with the repayment of the Prior Credit Facility, $4 million of debt issuance costs associated
with lenders that extinguished or reduced their participation in the Credit Agreement were written off in fiscal 2014,
and are included within interest and other expense in the consolidated statements of income. The Credit Agreement
provides for $4.0 billion of unsecured loan facilities consisting of a $2.5 billion term loan facility to WDT and a $1.5
billion revolving credit facility to WDT and WDI (the “Borrowers”). The revolving credit facility includes a $100
million sublimit for letters of credit and a $50 million sublimit for swing line loans. Subject to certain conditions, a
Borrower may elect to expand the credit facilities by, or obtain incremental term loans of, up to $1.0 billion if exist-
ing or new lenders provide additional term or revolving commitments. The loans under the Credit Agreement have
a five-year term. The obligations of the Borrowers under the Credit Agreement are guaranteed by the Company and
its material domestic subsidiaries, and the obligations of WDI under the Credit Agreement are also guaranteed by
WDT.
The term loans and the revolving credit loans may be prepaid in whole or in part at any time without premium
or penalty, subject to certain conditions. As of June 27, 2014, no amounts were outstanding under the revolving
credit facility and the term loan facility had a variable interest rate of 1.7% and a remaining, outstanding balance of
$2.4 billion. The Company is required to make quarterly principal payments on the term loan facility totaling $125
million in fiscal 2015, $156 million in fiscal 2016, $219 million in fiscal 2017, $250 million in fiscal 2018 and the
remaining balance of $1.7 billion in fiscal 2019.
The Credit Agreement requires the Company to comply with a leverage ratio and an interest coverage ratio calcu-
lated on a consolidated basis for the Company and its subsidiaries. In addition, the Credit Agreement contains
customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur
liens, incur indebtedness, make certain restricted payments, merge or consolidate and enter into certain speculative
hedging arrangements, and customary events of default. As of June 27, 2014, the Company was in compliance with
all covenants.
Note 4. Commitments and Contingencies
Lease Commitments
The Company leases certain facilities and equipment under long-term, non-cancelable operating leases. The
Company’s operating leases consist of leased property and equipment that expire at various dates through 2022.
Rental expense under these operating leases, including month-to-month rentals, was $59 million, $64 million and
$41 million in 2014, 2013 and 2012, respectively. Future minimum lease payments under operating leases that have
initial or remaining non-cancelable lease terms in excess of one year at June 27, 2014 are as follows (in millions):
2015 ................................................. $ 44
2016 ................................................. 38
2017 ................................................. 24
2018 ................................................. 20
2019 ................................................. 18
Thereafter ............................................. 55
Total future minimum payments ........................... $199
69