Debt |
3 Months Ended |
|---|---|
Oct. 02, 2026 | |
| Debt Disclosure [Abstract] | |
| Debt | Debt Loan Agreement On February 21, 2025, the Company entered into a Loan Agreement (the “Loan Agreement”) by and among the Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the other parties party thereto. The Loan Agreement comprised a term loan B facility in the principal amount of $2.0 billion (the “Term Loan Facility”) and a revolving credit facility in the principal amount of $1.5 billion (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Facilities”), including up to $150 million for letters of credit. The Revolving Credit Facility may be borrowed by the Company from time to time for general corporate purposes. The obligations under the Loan Agreement are guaranteed by the Company’s wholly-owned subsidiary, Sandisk Technologies, Inc. (“SDT”), and are required to be guaranteed by any of the Company’s future material U.S. wholly-owned subsidiaries, subject to certain exceptions outlined in the Loan Agreement. The obligations under the Loan Agreement are secured by the Company’s assets and SDT’s assets and are required to be secured by the assets of any of the Company’s future material U.S. wholly-owned subsidiaries, subject, in each case, to certain exceptions outlined in the Loan Agreement. The Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Loan Agreement) on the ability of the Company and its subsidiaries to undertake certain activities, including to incur indebtedness and liens, merge or consolidate with other entities, dispose of or transfer their assets, pay dividends or make distributions, make investments, make payments on junior or subordinated debt, enter into burdensome agreements, or transact with affiliates. As of October 2, 2026, the Company was in compliance with the financial covenant. In connection with the Loan Agreement, the Company and SDT entered into a security agreement to secure the obligations under the Facilities on a first-priority basis (subject to permitted liens) by a lien on substantially all the assets and properties of the Company and SDT, subject to certain exceptions. In connection with the Loan Agreement, the Company (solely with respect to obligations of any additional Borrower under the Loan Agreement) and SDT entered into a guaranty agreement to secure and unconditionally guarantee the obligations under the Loan Agreement, respectively, in each case, subject to certain exceptions. Term Loan Facility On February 21, 2025, the Company borrowed $2.0 billion under its Term Loan Facility. The Company used a portion of the proceeds of the borrowing to make a net distribution payment of $1.5 billion to WDC, with the remainder to be used for general corporate purposes of the Company. On March 4, 2026, the Company settled in full the remaining principal amounts due on the Term Loan Facility, plus accrued interest, using cash on hand. Revolving Credit Facility On September 9, 2026, the Company entered into Amendment No. 1 (“Amendment No. 1”) to its Revolving Credit Facility, originally dated February 21, 2025. Amendment No. 1 modifies certain interest rate provisions and extends the maturity date from February 21, 2030 to September 9, 2031. Amended Terms of the Revolving Credit Facility Borrowings under the Revolving Credit Facility, for U.S. dollar borrowings, will bear interest, at the Company’s option, at (x) the Adjusted Term Secured Overnight Financing Rate (“SOFR”) or Adjusted Daily Simple SOFR (as defined in the Loan Agreement), plus an interest rate margin of 1.375% per annum (subject to step-ups and step-downs based on the Company’s Net Leverage Ratio (as defined in the Loan Agreement) or the corporate family ratings of the Company), or (y) a base rate plus an interest rate margin of 0.375% per annum (subject to step-ups and step-downs based on the Company’s Net Leverage Ratio (as defined in the Loan Agreement) or the corporate family ratings of the Company). The Company will pay a commitment fee of 0.175% per annum (subject to step-ups and step-downs based on the Company's Net Leverage Ratio (as defined in the Loan Agreement) or the corporate family ratings of the Company) on undrawn revolving commitments under the Revolving Credit Facility. The amendment reduced the applicable interest rate margins from 2.00% to 1.375% for SOFR borrowings and from 1.00% to 0.375% for base rate borrowings. Additionally, the Company’s commitment fee on undrawn revolving commitments was reduced from 0.30% to 0.175% per annum. The Revolving Credit Facility will also provide for borrowings in Euros, Yen and additional currencies agreed to by the lenders under the Revolving Credit Facility. At the maturity of the Revolving Credit Facility, the commitments thereunder shall be terminated. In connection with the establishment of the Revolving Credit Facility and the implementation of Amendment No. 1, the Company recognized deferred costs, classified as Other non-current assets of $7 million as of October 2, 2026, which will be amortized to Interest expense over the term of the facility. As of October 2, 2026, the Company had no outstanding standby letters of credit, and the available capacity under the Revolving Credit Facility was $1.5 billion. The Loan Agreement also includes a financial covenant that prohibits the Company from exceeding a maximum Leverage Ratio (as defined in the Loan Agreement). As of October 2, 2026, the Company was in compliance with the financial covenant. Interest expense and amortization of issuance costs For the three months ended October 2, 2026, interest expense and amortization of issuance costs were immaterial. For the three months ended October 3, 2025, interest expense was $37 million and amortization of issuance costs was $2 million.
|