x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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33-0956711
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State or Other Jurisdiction of
Incorporation or Organization
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(I.R.S. Employer
Identification No.)
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3355 Michelson Drive, Suite 100
Irvine, California
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92612
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 Par Value Per Share
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The NASDAQ Stock Market LLC
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(NASDAQ Global Select Market)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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•
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expectations concerning the anticipated benefits of our acquisitions;
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•
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demand for our products in the various markets and factors contributing to such demand;
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our platform;
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our position in the industry;
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our belief regarding our ability to capitalize on the expansion in, and our expectations regarding the growth and demand of, digital data;
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our plans to continue to develop new products and expand into new storage markets and into emerging economic markets;
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our balancing of our hard drive business with investments in newer areas;
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developing relationships with customers;
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the emergence of new storage markets for our products;
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the emergence of competing storage technologies;
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our quarterly cash dividend policy;
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our share repurchase plans;
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our stock price volatility;
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our belief regarding our compliance with environmental laws and regulations;
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expectations regarding our external and internal supply base;
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our belief regarding component availability;
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expectations regarding the outcome of legal proceedings in which we are involved;
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our beliefs regarding tax benefits and the timing of future payments, if any, relating to the unrecognized tax benefits, and the adequacy of our tax provisions; and
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•
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our beliefs regarding the sufficiency of our cash and cash equivalents to meet our working capital, capital expenditure and other cash needs.
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Proliferation of data
. The proliferation of consumer electronics ("CE"), computing devices, social media and cloud-related infrastructure is driving rapid growth in the creation, sharing and retention of high definition video, high resolution images, e-mail and big data files.
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•
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Evolution in data access and distribution.
Increasing demand for data access and distribution anytime and anywhere, facilitated by rapidly improving network accessibility, big data analytics and higher bandwidth, is powering a dramatic increase in the need for data storage at both the local level and at the off-site, network-accessed or “cloud” levels.
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Advancements in storage devices
. Technological improvements in the capacity, size, performance, connectivity and power requirements of storage devices continue to meet the demand for higher density and higher performance storage in increasingly diverse applications.
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Growth in consumers’ use
of mobile computing and storage and use of digital content in the home and small office.
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Adoption of tiered storage architectures
. With the significant increase in data storage demand, enterprises and cloud infrastructure players have adopted tiered storage architectures to improve storage performance and manage the costs of this growth as they cope with increasingly large, growing pools of digital content. Tiered storage architectures optimize data storage to the most appropriate storage device, driving increasing demand for high capacity and high performance HDDs and flash-based solid-state storage.
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The development of advanced storage solutions
that bypass tiered architectures while delivering the same benefits.
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relentless focus on operational excellence in all aspects of our business;
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providing a full portfolio of compelling, high quality storage products with effective technology deployment, high efficiency, flexibility and speed;
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developing collaborative engineering relationships with customers that create value by solving their data management needs through innovative solutions; and
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strategically aligning our investments in profitable and growing markets beyond our core HDD business, to ensure future growth in storage businesses related to mobility, solid-state and cloud computing.
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enables continued diversification of our storage solutions portfolio and entry into additional growing adjacent markets;
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allows us to achieve strong financial performance, including healthy returns on invested capital and cash generation, thereby enabling efficient allocation of capital to shareholders and strategic investments in innovation; and
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creates compelling value for our customers and makes them more successful, while providing growth opportunities for our suppliers, employees, and shareholders.
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Acoustics — sound power emitted during hard drive operation, commonly expressed in decibels, and perceived loudness due to sound pressure, commonly expressed in sones;
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Data transfer rate — sustained rate of data transfer to and from the disk, commonly expressed in gigabits per second;
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Power consumption — which is the amount of electricity required to operate the drive, measured in watts;
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Seek time — time needed to position the heads over a selected track on the disk surface, commonly expressed in milliseconds;
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Spindle rotation speed — nominal rotation speed of the disks inside the hard drive, commonly expressed in RPM or latency. Spindle rotation speeds commonly stated as 5,400, 7,200, 10,000 and 15,000 RPM are sometimes approximations; and
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Storage capacity — which is the amount of data that can be stored on the hard drive, commonly expressed in GB or TB.
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Name
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Age
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Position
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Stephen D. Milligan
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52
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President and Chief Executive Officer
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James J. Murphy
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56
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President, WD Subsidiary
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Michael D. Cordano
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51
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President, HGST Subsidiary
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Olivier M. Leonetti
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50
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Chief Financial Officer
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Mark P. Long
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48
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Executive Vice President, Chief Strategy Officer
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Michael C. Ray
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47
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Senior Vice President, General Counsel, Secretary
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•
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limits our ability to integrate the businesses of our HGST and WD subsidiaries (and we do not expect to achieve significant operating expense synergies while the hold separate condition continues to exist);
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has caused, and could cause further, difficulties in retaining key employees and delays or uncertainties in making decisions about the combined business;
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has resulted in, and could result in additional, significant costs (including higher capital expenditures relative to our competitors as a result of maintaining separate functions in several areas); and
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has required, and could require additional, changes in business practices.
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Volatile Demand.
Our direct and indirect customers may delay or reduce their purchases of our products and systems containing our products. In addition, many of our customers rely on credit financing to purchase our products. If negative conditions in the global credit markets prevent our customers’ access to credit, product orders may decrease, which could result in lower revenue. Likewise, if our suppliers, sub-suppliers and sub-contractors (collectively referred to as “suppliers”) face challenges in obtaining credit, in selling their products or otherwise in operating their businesses, they may be unable to offer the materials we use to manufacture our products. These actions could result in reductions in our revenue and increased operating costs, which could adversely affect our business, results of operations and financial condition.
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Restructuring Activities.
If demand for our products slows as a result of a deterioration in economic conditions, we may undertake restructuring activities to realign our cost structure with softening demand. The occurrence of restructuring activities could result in impairment charges and other expenses, which could adversely impact our results of operations or financial condition.
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Credit Volatility and Loss of Receivables.
We extend credit and payment terms to some of our customers. In addition to ongoing credit evaluations of our customers’ financial condition, we traditionally seek to mitigate our credit risk by purchasing credit insurance on certain of our accounts receivable balances. As a result of the continued uncertainty and volatility in global economic conditions, however, we may find it increasingly difficult to be able to insure these accounts receivable. We could suffer significant losses if a customer whose accounts receivable we have not insured, or have underinsured, fails and is unable to pay us. Additionally, negative or uncertain global economic conditions increase the risk that if a customer whose accounts receivable we have insured fails, the financial condition of the insurance carrier for such customer account may have also deteriorated such that it cannot cover our loss. A significant loss of an accounts receivable that we cannot recover through credit insurance would have a negative impact on our financial results.
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Impairment Charges.
Negative or uncertain global economic conditions could result in circumstances, such as a sustained decline in our stock price and market capitalization or a decrease in our forecasted cash flows such that they are insufficient, indicating that the carrying value of our long-lived assets or goodwill may be impaired. If we are required to record a significant charge to earnings in our consolidated financial statements because an impairment of our long-lived assets or goodwill is determined, our results of operations will be adversely affected.
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Mobile Devices.
There has been and continues to be a rapid growth in devices that do not contain a hard drive such as tablet computers and smart phones. As tablet computers and smart phones provide many of the same capabilities as PCs, they have displaced or materially affected, and we expect will continue to displace or materially affect, the demand for PCs. If we are not successful in adapting our product offerings to include disk drives or alternative storage solutions that address these devices, demand for our products in these markets may decrease and our financial results could be materially adversely affected.
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•
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Cloud Computing.
Consumers traditionally have stored their data on their PC, often supplemented with personal external storage devices. Most businesses also include similar local storage as a primary or secondary storage location. This storage is typically provided by HDDs. With cloud computing, applications and data are hosted, accessed and processed through a third-party provider over a broadband Internet connection, potentially reducing or eliminating the need for, among other things, significant storage inside the accessing computer. Even if we are successful at increasing revenues from sales to cloud computing customers, if we are not successful in manufacturing compelling products to address the cloud computing opportunity, demand for our products in these other markets may decrease and our financial results could be materially adversely affected. Demand for cloud computing solutions themselves may be volatile due to differing patterns of technology adoption and innovation, improved data storage efficiency by cloud computing service providers, and concerns about data protection by end users.
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Obsolete Inventory.
In some cases, products we manufacture for these markets are uniquely configured for a single customer’s application, creating a risk of obsolete inventory if anticipated demand is not actually realized. In addition, rapid technological change in our industry increases the risk of inventory obsolescence.
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•
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Macroeconomic Conditions.
Consumer spending has been, and may continue to be, adversely affected in many regions due to negative macroeconomic conditions and high unemployment levels. Please see the risk factor entitled “
Adverse global economic conditions and credit market uncertainty could harm our business, results of operations and financial condition.”
for more risks and uncertainties relating to macroeconomic conditions.
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difficulties faced in manufacturing ramp;
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implementing at an acceptable cost product features expected by our customers;
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market acceptance/qualification;
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effective management of inventory levels in line with anticipated product demand;
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quality problems or other defects in the early stages of new product introduction and problems with compatibility between our products and those of our customers that were not anticipated in the design of those products; and
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our ability to increase our software development capability.
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obtaining requisite governmental permits and approvals;
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currency exchange rate fluctuations or restrictions;
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political instability and civil unrest;
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limited transportation availability, delays, and extended time required for shipping, which risks may be compounded in periods of price declines;
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higher freight rates;
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labor challenges, including difficulties finding and retaining talent or responding to labor disputes or disruptions;
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trade restrictions or higher tariffs;
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copyright levies or similar fees or taxes imposed in European and other countries;
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exchange, currency and tax controls and reallocations;
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increasing labor and overhead costs; and
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loss or non-renewal of favorable tax treatment under agreements or treaties with foreign tax authorities.
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our interests could diverge from our partners’ interests or we may not be able to agree with co-venturers on ongoing activities, or on the amount, timing or nature of further investments in the relationship
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we may experience difficulties and delays in ramping production at, and transferring technology to, such ventures;
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our control over the operations of our ventures is limited;
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due to financial constraints, our co-venturers may be unable to meet their commitments to us or may pose credit risks for our transactions with them;
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due to differing business models or long-term business goals, our partners may decide not to join us in funding capital investment by our ventures, which may result in higher levels of cash expenditures by us;
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we may lose the rights to technology or products being developed by the strategic relationship, including if our partner is acquired by another company, files for bankruptcy or experiences financial or other losses;
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we may experience difficulties or delays in collecting amounts due to us from our co-venturers;
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the terms of our arrangements may turn out to be unfavorable; and
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changes in tax, legal or regulatory requirements may necessitate changes in the agreements with our co-venturers.
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interrupting or otherwise disrupting the shipment of our product components;
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damaging our reputation;
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forcing us to find alternate component sources;
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reducing demand for our products (for example, through a consumer boycott); or
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exposing us to potential liability for our suppliers’ or customers’ wrongdoings.
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the timing of orders from and shipment of products to major customers;
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our product mix;
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changes in the ASPs of our products;
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manufacturing delays or interruptions;
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acceptance by customers of competing products in lieu of our products;
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variations in the cost of and lead times for components for our products;
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limited availability of components that we obtain from a single or a limited number of suppliers;
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seasonal and other fluctuations in demand for systems that use storage devices often due to technological advances; and
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availability and rates of transportation.
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price protection adjustments and other sales promotions and allowances on products sold to retailers, resellers and distributors;
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inventory adjustments for write-down of inventories to lower of cost or market value (net realizable value);
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testing of goodwill and other long-lived assets for impairment;
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reserves for doubtful accounts;
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accruals for product returns;
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accruals for warranty costs related to product defects;
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accruals for litigation and other contingencies;
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liabilities for unrecognized tax benefits; and
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expensing of stock-based compensation.
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actual or anticipated fluctuations in our operating results, including those resulting from the seasonality of our business;
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announcements of technological innovations by us or our competitors, which may decrease the volume and profitability of sales of our existing products and increase the risk of inventory obsolescence;
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new products introduced by us or our competitors;
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strategic actions by us or competitors, such as acquisitions and restructurings;
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periods of severe pricing pressures due to oversupply or price erosion resulting from competitive pressures or industry consolidation;
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developments with respect to patents or proprietary rights;
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proposed or adopted regulatory changes or developments or anticipated or pending investigations, proceedings or litigation that involve or affect us or our competitors;
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conditions and trends in the hard drive, solid state storage, computer, data and content management, storage and communication industries;
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contraction in our operating results or growth rates that are lower than our previous high growth-rate periods;
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failure to meet analysts’ revenue or earnings estimates or changes in financial estimates or publication of research reports and recommendations by financial analysts relating specifically to us or the storage industry in general; and
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macroeconomic conditions that affect the market generally and, in particular, developments related to market conditions for our industry.
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Location
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Building(s)
Owned or
Leased
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Approximate
Square
Footage
|
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Description
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United States
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California
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Fremont
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Owned
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392,000
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Manufacturing of head wafers and research and development
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Irvine
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Leased
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467,000
|
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Research and development, administrative, marketing and sales
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San Jose
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Owned and Leased
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2,871,000
|
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Manufacturing of head wafers and head, media and product development; research and development, administrative, marketing and sales
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Santa Ana
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Leased
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73,000
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Research & development
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Colorado
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Longmont
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Leased
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65,000
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Research and development
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Minnesota
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Rochester
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Leased
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114,000
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Product development
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Asia
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China
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Shenzhen
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Owned and Leased
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1,417,000
|
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Manufacturing of hard drives and, HGAs, media; administrative
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Japan
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Odawara
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Owned
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513,000
|
|
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Manufacturing of head wafers and head development
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Fujisawa
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Owned
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654,000
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|
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Product development
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Malaysia
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Johor
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Owned
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271,000
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Manufacturing of substrates
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Kuala Lumpur
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Owned
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1,074,000
|
|
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Manufacturing of hard drives and research and development
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Kuching
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Owned
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479,000
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Manufacturing and development of substrates
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Penang
|
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Owned
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1,150,000
|
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Manufacturing of media, research and development and slider fabrication
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Philippines
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Laguna
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Owned
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615,000
|
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Manufacturing of HGAs and slider fabrication
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Singapore
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Owned and
Leased
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802,000
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Manufacturing of media and research and development; administrative
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Thailand
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Bang Pa-In
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Owned
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1,665,000
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Slider fabrication, manufacturing of hard drives and HGAs, and research and development
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Navanakorn
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Owned
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290,000
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Manufacturing of HGAs
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Prachinburi
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Owned
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729,000
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|
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Manufacturing of hard drives
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|
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First
|
|
Second
|
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Third
|
|
Fourth
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2015
|
|
|
|
|
|
|
|
|
High
|
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$103.51
|
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$114.69
|
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$113.88
|
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$102.07
|
Low
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|
$91.99
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$82.85
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$89.82
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$78.27
|
2014
|
|
|
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|
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High
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$70.61
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$84.70
|
|
$91.10
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$95.00
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Low
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|
$59.36
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$62.00
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$80.84
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|
$80.78
|
(in millions, except average price paid per share)
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced
Program(1)
|
|
Maximum Dollar Value of
Shares that May Yet
be Purchased
Under the
Program(1)
|
||||||
April 4, 2015 — May 1, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,382
|
|
May 2, 2015 — May 29, 2015
|
|
2.0
|
|
|
$
|
97.66
|
|
|
2.0
|
|
|
$
|
2,184
|
|
May 30, 2015 — July 3, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,184
|
|
Total
|
|
2.0
|
|
|
$
|
—
|
|
|
2.0
|
|
|
$
|
2,184
|
|
(1)
|
Our Board of Directors previously authorized $3.0 billion for the repurchase of our common stock. On February 3, 2015, our Board of Directors authorized an additional $2.0 billion for the repurchase of our common stock and approved the extension of our stock repurchase program to February 3, 2020. Repurchases under our stock repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan.
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|
|
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||
Record Date
|
|
Payment Date
|
|
Dividend Per Share
|
||
Sept. 30, 2013
|
|
Oct. 15, 2013
|
|
$
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0.25
|
|
Dec. 27, 2013
|
|
Jan. 15, 2014
|
|
$
|
0.30
|
|
Mar. 28, 2014
|
|
Apr. 15, 2014
|
|
$
|
0.30
|
|
June 27, 2014
|
|
July 15, 2014
|
|
$
|
0.40
|
|
Oct. 3, 2014
|
|
Oct. 15, 2014
|
|
$
|
0.40
|
|
Jan. 2, 2015
|
|
Jan. 15, 2015
|
|
$
|
0.40
|
|
Apr. 3, 2015
|
|
Apr. 16, 2015
|
|
$
|
0.50
|
|
July 3, 2015
|
|
July 15, 2015
|
|
$
|
0.50
|
|
|
|
7/2/10
|
|
7/1/11
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|
6/29/12
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|
6/28/13
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|
6/27/14
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|
7/3/15
|
||||||||||||
Western Digital Corporation
|
|
$
|
100.00
|
|
|
$
|
121.32
|
|
|
$
|
100.93
|
|
|
$
|
210.23
|
|
|
$
|
319.38
|
|
|
$
|
283.53
|
|
S&P 500 Index
|
|
100.00
|
|
|
130.69
|
|
|
137.81
|
|
|
166.20
|
|
|
207.10
|
|
|
222.47
|
|
||||||
Dow Jones US Technology Hardware & Equipment Index
|
|
100.00
|
|
|
122.20
|
|
|
138.27
|
|
|
133.99
|
|
|
190.71
|
|
|
216.05
|
|
|
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
|
June 29,
2012 |
|
July 1,
2011 |
||||||||||
|
|
(in millions, except per share and employee data)
|
||||||||||||||||||
Revenue, net
|
|
$
|
14,572
|
|
|
$
|
15,130
|
|
|
$
|
15,351
|
|
|
$
|
12,478
|
|
|
$
|
9,526
|
|
Gross profit
|
|
$
|
4,221
|
|
|
$
|
4,360
|
|
|
$
|
4,363
|
|
|
$
|
3,638
|
|
|
$
|
1,791
|
|
Net income
|
|
$
|
1,465
|
|
|
$
|
1,617
|
|
|
$
|
980
|
|
|
$
|
1,612
|
|
|
$
|
726
|
|
Income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
6.31
|
|
|
$
|
6.88
|
|
|
$
|
4.07
|
|
|
$
|
6.69
|
|
|
$
|
3.14
|
|
Diluted
|
|
$
|
6.18
|
|
|
$
|
6.68
|
|
|
$
|
3.98
|
|
|
$
|
6.58
|
|
|
$
|
3.09
|
|
Cash dividends declared per common share
|
|
$
|
1.80
|
|
|
$
|
1.25
|
|
|
$
|
1.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Working capital
|
|
$
|
5,275
|
|
|
$
|
4,875
|
|
|
$
|
3,625
|
|
|
$
|
3,109
|
|
|
$
|
3,317
|
|
Total assets
|
|
$
|
15,181
|
|
|
$
|
15,499
|
|
|
$
|
14,036
|
|
|
$
|
14,206
|
|
|
$
|
8,118
|
|
Long-term debt
|
|
$
|
2,156
|
|
|
$
|
2,313
|
|
|
$
|
1,725
|
|
|
$
|
1,955
|
|
|
$
|
150
|
|
Shareholders’ equity
|
|
$
|
9,219
|
|
|
$
|
8,842
|
|
|
$
|
7,893
|
|
|
$
|
7,669
|
|
|
$
|
5,488
|
|
Number of employees
|
|
76,449
|
|
|
84,072
|
|
|
85,777
|
|
|
103,111
|
|
|
65,431
|
|
•
|
In
2015
, our net revenue
decreased
by
4%
to
$14.6 billion
on HDD shipments of
229 million
units as compared to
$15 billion
on shipments of
249 million
units in
2014
.
|
•
|
Net revenue derived from enterprise SSDs was
$811 million
in
2015
as compared to
$508 million
in
2014
.
|
•
|
HDD ASPs
increased
to
$60
in
2015
from
$58
in
2014
.
|
•
|
Gross profit as a percentage of net revenue
increased
to
29.0%
in
2015
from
28.8%
in
2014
.
|
•
|
Operating income
decreased
from
$1.8 billion
in
2014
to
$1.6 billion
in
2015
.
|
•
|
Operating income in
2015
included
$176 million
of employee termination, asset impairment and other charges and
$15 million
of charges related to an arbitration award as compared to
$95 million
and
$52 million
, respectively, in
2014
.
|
•
|
Net income in
2015
was
$1.5 billion
, or
$6.18
per diluted share, compared to
$1.6 billion
, or
$6.68
per diluted share, in
2014
.
|
|
|
Years Ended
|
|||||||||||||||||||
|
|
July 3, 2015
|
|
June 27, 2014
|
|
June 28, 2013
|
|||||||||||||||
Net revenue
|
|
$
|
14,572
|
|
|
100.0
|
%
|
|
$
|
15,130
|
|
|
100.0
|
%
|
|
$
|
15,351
|
|
|
100.0
|
%
|
Gross profit
|
|
4,221
|
|
|
29.0
|
|
|
4,360
|
|
|
28.8
|
|
|
4,363
|
|
|
28.4
|
|
|||
Research and development
|
|
1,646
|
|
|
11.3
|
|
|
1,661
|
|
|
11.0
|
|
|
1,572
|
|
|
10.2
|
|
|||
Selling, general and administrative
|
|
773
|
|
|
5.3
|
|
|
761
|
|
|
5.0
|
|
|
706
|
|
|
4.6
|
|
|||
Charges related to arbitration award
|
|
15
|
|
|
0.1
|
|
|
52
|
|
|
0.3
|
|
|
681
|
|
|
4.4
|
|
|||
Employee termination, asset impairment and other charges
|
|
176
|
|
|
1.2
|
|
|
95
|
|
|
0.6
|
|
|
138
|
|
|
0.9
|
|
|||
Operating income
|
|
1,611
|
|
|
11.1
|
|
|
1,791
|
|
|
11.8
|
|
|
1,266
|
|
|
8.2
|
|
|||
Other expense, net
|
|
(34
|
)
|
|
(0.2
|
)
|
|
(39
|
)
|
|
(0.3
|
)
|
|
(44
|
)
|
|
(0.3
|
)
|
|||
Income before income taxes
|
|
1,577
|
|
|
10.8
|
|
|
1,752
|
|
|
11.6
|
|
|
1,222
|
|
|
8.0
|
|
|||
Income tax provision
|
|
112
|
|
|
0.8
|
|
|
135
|
|
|
0.9
|
|
|
242
|
|
|
1.6
|
|
|||
Net income
|
|
1,465
|
|
|
10.1
|
|
|
1,617
|
|
|
10.7
|
|
|
980
|
|
|
6.4
|
|
|
|
Years Ended
|
||||||||||
|
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Net revenue
|
|
$
|
14,572
|
|
|
$
|
15,130
|
|
|
$
|
15,351
|
|
ASPs (per unit)*
|
|
$
|
60
|
|
|
$
|
58
|
|
|
$
|
61
|
|
Revenues by Geography (%)
|
|
|
|
|
|
|
||||||
Americas
|
|
28
|
%
|
|
25
|
%
|
|
26
|
%
|
|||
Europe, Middle East and Africa
|
|
22
|
|
|
21
|
|
|
20
|
|
|||
Asia
|
|
50
|
|
|
54
|
|
|
54
|
|
|||
Revenues by Channel (%)
|
|
|
|
|
|
|
||||||
Original Equipment Manufacturers ("OEM")
|
|
64
|
%
|
|
63
|
%
|
|
63
|
%
|
|||
Distributors
|
|
23
|
|
|
24
|
|
|
24
|
|
|||
Retailers
|
|
13
|
|
|
13
|
|
|
13
|
|
|||
Unit Shipments
*
|
|
|
|
|
|
|
||||||
PC
|
|
136
|
|
|
157
|
|
|
162
|
|
|||
Non-PC
|
|
93
|
|
|
92
|
|
|
80
|
|
|||
Total units shipped
|
|
229
|
|
|
249
|
|
|
242
|
|
*
|
Based on sales of HDD units only.
|
|
|
Years Ended
|
||||||||||
|
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
2,242
|
|
|
$
|
2,816
|
|
|
$
|
3,119
|
|
Investing activities
|
|
(953
|
)
|
|
(1,936
|
)
|
|
(970
|
)
|
|||
Financing activities
|
|
(1,069
|
)
|
|
(385
|
)
|
|
(1,048
|
)
|
|||
Net increase in cash and cash equivalents
|
|
$
|
220
|
|
|
$
|
495
|
|
|
$
|
1,101
|
|
|
|
Years Ended
|
|||||||
|
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
|||
Days sales outstanding
|
|
39
|
|
|
48
|
|
|
43
|
|
Days in inventory
|
|
49
|
|
|
41
|
|
|
39
|
|
Days payables outstanding
|
|
(67
|
)
|
|
(67
|
)
|
|
(66
|
)
|
Cash conversion cycle
|
|
21
|
|
|
22
|
|
|
16
|
|
|
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
Revolving credit facility*
|
|
$
|
255
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt, including current portion*
|
|
$
|
2,312
|
|
|
$
|
156
|
|
|
$
|
469
|
|
|
$
|
1,687
|
|
|
$
|
—
|
|
Operating leases
|
|
185
|
|
|
40
|
|
|
58
|
|
|
42
|
|
|
45
|
|
|||||
Purchase obligations
|
|
2,844
|
|
|
2,809
|
|
|
28
|
|
|
6
|
|
|
1
|
|
|||||
Total
|
|
$
|
5,596
|
|
|
$
|
3,260
|
|
|
$
|
555
|
|
|
$
|
1,735
|
|
|
$
|
46
|
|
*
|
Included within our consolidated balance sheet
|
|
|
Contract
Amount
|
|
Weighted Average
Contract Rate*
|
|
Unrealized
Gain
(Loss)
|
||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
||||||
Japanese Yen
|
|
$
|
163
|
|
|
$
|
118.43
|
|
|
$
|
(4
|
)
|
Malaysian Ringgit
|
|
$
|
228
|
|
|
$
|
3.70
|
|
|
$
|
(9
|
)
|
Philippine Peso
|
|
$
|
51
|
|
|
$
|
44.95
|
|
|
—
|
|
|
Singapore Dollar
|
|
$
|
45
|
|
|
$
|
1.34
|
|
|
$
|
—
|
|
Thai Baht
|
|
$
|
628
|
|
|
$
|
33.36
|
|
|
$
|
(12
|
)
|
Fair value hedges:
|
|
|
|
|
|
|
||||||
British Pound Sterling
|
|
$
|
7
|
|
|
$
|
0.64
|
|
|
—
|
|
|
Euro
|
|
$
|
6
|
|
|
$
|
0.90
|
|
|
—
|
|
|
Japanese Yen
|
|
$
|
81
|
|
|
$
|
122.93
|
|
|
—
|
|
|
Philippine Peso
|
|
$
|
33
|
|
|
$
|
45.19
|
|
|
—
|
|
|
Singapore Dollar
|
|
$
|
15
|
|
|
$
|
1.34
|
|
|
—
|
|
|
Thai Baht
|
|
$
|
80
|
|
|
$
|
33.88
|
|
|
—
|
|
*
|
Expressed in units of foreign currency per U.S. dollar
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Statement Schedule:
|
|
|
/s/ KPMG LLP
|
August 21, 2015
Irvine, California
|
|
|
|
/s/ KPMG LLP
|
August 21, 2015
Irvine, California
|
|
|
|
July 3,
2015 |
|
June 27,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,024
|
|
|
$
|
4,804
|
|
Short-term investments
|
262
|
|
|
284
|
|
||
Accounts receivable, net
|
1,532
|
|
|
1,989
|
|
||
Inventories
|
1,368
|
|
|
1,226
|
|
||
Other current assets
|
331
|
|
|
417
|
|
||
Total current assets
|
8,517
|
|
|
8,720
|
|
||
Property, plant and equipment, net
|
2,965
|
|
|
3,293
|
|
||
Goodwill
|
2,766
|
|
|
2,559
|
|
||
Other intangible assets, net
|
332
|
|
|
454
|
|
||
Other non-current assets
|
601
|
|
|
473
|
|
||
Total assets
|
$
|
15,181
|
|
|
$
|
15,499
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,881
|
|
|
$
|
1,971
|
|
Accrued arbitration award
|
—
|
|
|
758
|
|
||
Accrued expenses
|
470
|
|
|
412
|
|
||
Accrued compensation
|
330
|
|
|
460
|
|
||
Accrued warranty
|
150
|
|
|
119
|
|
||
Revolving credit facility
|
255
|
|
|
—
|
|
||
Current portion of long-term debt
|
156
|
|
|
125
|
|
||
Total current liabilities
|
3,242
|
|
|
3,845
|
|
||
Long-term debt
|
2,156
|
|
|
2,313
|
|
||
Other liabilities
|
564
|
|
|
499
|
|
||
Total liabilities
|
5,962
|
|
|
6,657
|
|
||
Commitments and contingencies (Notes 4 and 5)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 par value; authorized — 5 shares; issued and outstanding — none
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; authorized — 450 shares; issued — 261 shares; outstanding — 230 and 234 shares, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
2,428
|
|
|
2,331
|
|
||
Accumulated other comprehensive income (loss)
|
(20
|
)
|
|
12
|
|
||
Retained earnings
|
9,107
|
|
|
8,066
|
|
||
Treasury stock — common shares at cost; 31 shares and 27 shares, respectively
|
(2,299
|
)
|
|
(1,570
|
)
|
||
Total shareholders’ equity
|
9,219
|
|
|
8,842
|
|
||
Total liabilities and shareholders’ equity
|
$
|
15,181
|
|
|
$
|
15,499
|
|
|
Years Ended
|
||||||||||
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Revenue, net
|
$
|
14,572
|
|
|
$
|
15,130
|
|
|
$
|
15,351
|
|
Cost of revenue
|
10,351
|
|
|
10,770
|
|
|
10,988
|
|
|||
Gross profit
|
4,221
|
|
|
4,360
|
|
|
4,363
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
1,646
|
|
|
1,661
|
|
|
1,572
|
|
|||
Selling, general and administrative
|
773
|
|
|
761
|
|
|
706
|
|
|||
Charges related to arbitration award
|
15
|
|
|
52
|
|
|
681
|
|
|||
Employee termination, asset impairment and other charges
|
176
|
|
|
95
|
|
|
138
|
|
|||
Total operating expenses
|
2,610
|
|
|
2,569
|
|
|
3,097
|
|
|||
Operating income
|
1,611
|
|
|
1,791
|
|
|
1,266
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and other income
|
15
|
|
|
17
|
|
|
11
|
|
|||
Interest and other expense
|
(49
|
)
|
|
(56
|
)
|
|
(55
|
)
|
|||
Total other expense, net
|
(34
|
)
|
|
(39
|
)
|
|
(44
|
)
|
|||
Income before income taxes
|
1,577
|
|
|
1,752
|
|
|
1,222
|
|
|||
Income tax provision
|
112
|
|
|
135
|
|
|
242
|
|
|||
Net income
|
$
|
1,465
|
|
|
$
|
1,617
|
|
|
$
|
980
|
|
Income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
6.31
|
|
|
$
|
6.88
|
|
|
$
|
4.07
|
|
Diluted
|
$
|
6.18
|
|
|
$
|
6.68
|
|
|
$
|
3.98
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
232
|
|
|
235
|
|
|
241
|
|
|||
Diluted
|
237
|
|
|
242
|
|
|
246
|
|
|
Years Ended
|
||||||||||
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Net income
|
$
|
1,465
|
|
|
$
|
1,617
|
|
|
$
|
980
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Net actuarial pension gain (loss)
|
(2
|
)
|
|
(4
|
)
|
|
14
|
|
|||
Translation loss
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Net unrealized gain (loss) on foreign exchange contracts
|
(30
|
)
|
|
51
|
|
|
(30
|
)
|
|||
Other comprehensive income (loss)
|
(32
|
)
|
|
47
|
|
|
(20
|
)
|
|||
Total comprehensive income
|
$
|
1,433
|
|
|
$
|
1,664
|
|
|
$
|
960
|
|
|
Years Ended
|
||||||||||
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
1,465
|
|
|
$
|
1,617
|
|
|
$
|
980
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
1,114
|
|
|
1,244
|
|
|
1,233
|
|
|||
Stock-based compensation
|
162
|
|
|
156
|
|
|
137
|
|
|||
Deferred income taxes
|
28
|
|
|
(13
|
)
|
|
35
|
|
|||
Gain from insurance recovery
|
(37
|
)
|
|
(65
|
)
|
|
—
|
|
|||
Loss on disposal of assets
|
17
|
|
|
40
|
|
|
—
|
|
|||
Non-cash portion of employee termination, asset impairment and other charges
|
86
|
|
|
62
|
|
|
19
|
|
|||
Other non-cash operating activities, net
|
—
|
|
|
9
|
|
|
—
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
458
|
|
|
(175
|
)
|
|
584
|
|
|||
Inventories
|
(143
|
)
|
|
—
|
|
|
22
|
|
|||
Accounts payable
|
(148
|
)
|
|
(32
|
)
|
|
(511
|
)
|
|||
Accrued arbitration award
|
(758
|
)
|
|
52
|
|
|
681
|
|
|||
Accrued expenses
|
35
|
|
|
(56
|
)
|
|
(122
|
)
|
|||
Accrued compensation
|
(134
|
)
|
|
7
|
|
|
77
|
|
|||
Other assets and liabilities
|
97
|
|
|
(30
|
)
|
|
(16
|
)
|
|||
Net cash provided by operating activities
|
2,242
|
|
|
2,816
|
|
|
3,119
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(612
|
)
|
|
(628
|
)
|
|
(952
|
)
|
|||
Acquisitions, net of cash acquired
|
(257
|
)
|
|
(823
|
)
|
|
(1
|
)
|
|||
Purchases of investments
|
(857
|
)
|
|
(561
|
)
|
|
(17
|
)
|
|||
Proceeds from sales and maturities of investments
|
768
|
|
|
72
|
|
|
—
|
|
|||
Other investing activities, net
|
5
|
|
|
4
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(953
|
)
|
|
(1,936
|
)
|
|
(970
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Issuance of stock under employee stock plans
|
212
|
|
|
187
|
|
|
185
|
|
|||
Taxes paid on vested stock awards under employee stock plans
|
(64
|
)
|
|
(32
|
)
|
|
(25
|
)
|
|||
Excess tax benefits from employee stock plans
|
19
|
|
|
60
|
|
|
45
|
|
|||
Repurchases of common stock
|
(970
|
)
|
|
(816
|
)
|
|
(842
|
)
|
|||
Dividends paid to shareholders
|
(396
|
)
|
|
(259
|
)
|
|
(181
|
)
|
|||
Repayment of debt
|
(125
|
)
|
|
(2,517
|
)
|
|
(230
|
)
|
|||
Proceeds from debt, net of issuance costs
|
255
|
|
|
2,992
|
|
|
—
|
|
|||
Net cash used in financing activities
|
(1,069
|
)
|
|
(385
|
)
|
|
(1,048
|
)
|
|||
Net increase in cash and cash equivalents
|
220
|
|
|
495
|
|
|
1,101
|
|
|||
Cash and cash equivalents, beginning of year
|
4,804
|
|
|
4,309
|
|
|
3,208
|
|
|||
Cash and cash equivalents, end of year
|
$
|
5,024
|
|
|
$
|
4,804
|
|
|
$
|
4,309
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
47
|
|
|
$
|
141
|
|
|
$
|
146
|
|
Cash paid for interest
|
$
|
45
|
|
|
$
|
46
|
|
|
$
|
49
|
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
|
|
||||||
Accrual of cash dividend declared
|
$
|
116
|
|
|
$
|
94
|
|
|
$
|
59
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
Accumulated Other
|
|
|
|
Total
|
||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Paid-In
|
|
Comprehensive
|
|
Retained
|
|
Shareholders’
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Income (Loss)
|
|
Earnings
|
|
Equity
|
||||||||||||||
Balance at June 29, 2012
|
261
|
|
|
$
|
3
|
|
|
(15
|
)
|
|
$
|
(554
|
)
|
|
$
|
2,223
|
|
|
$
|
(15
|
)
|
|
$
|
6,012
|
|
|
$
|
7,669
|
|
Employee stock plans
|
|
|
|
|
|
10
|
|
|
384
|
|
|
(224
|
)
|
|
|
|
|
|
160
|
|
|||||||||
Stock based compensation
|
|
|
|
|
|
|
|
|
141
|
|
|
|
|
|
|
141
|
|
||||||||||||
Increase in excess tax benefits from employee stock plans
|
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
|
45
|
|
||||||||||||
Repurchase of common stock
|
|
|
|
|
(19
|
)
|
|
(842
|
)
|
|
|
|
|
|
|
|
(842
|
)
|
|||||||||||
Dividends to shareholders
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
(243
|
)
|
|
(240
|
)
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
980
|
|
|
980
|
|
||||||||||||
Actuarial pension gain
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
14
|
|
||||||||||||
Foreign currency translation gains
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
||||||||||||
Unrealized loss on foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
(30
|
)
|
||||||||||||
Balance at June 28, 2013
|
261
|
|
|
$
|
3
|
|
|
(24
|
)
|
|
$
|
(1,012
|
)
|
|
$
|
2,188
|
|
|
$
|
(35
|
)
|
|
$
|
6,749
|
|
|
$
|
7,893
|
|
Employee stock plans
|
|
|
|
|
7
|
|
|
258
|
|
|
(103
|
)
|
|
|
|
|
|
155
|
|
||||||||||
Stock based compensation
|
|
|
|
|
|
|
|
|
156
|
|
|
|
|
|
|
156
|
|
||||||||||||
Stock awards assumed in acquisition
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
25
|
|
||||||||||||
Increase in excess tax benefits from employee stock plans
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
60
|
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
(10
|
)
|
|
(816
|
)
|
|
|
|
|
|
|
|
(816
|
)
|
|||||||||||
Dividends to shareholders
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
(300
|
)
|
|
(295
|
)
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
1,617
|
|
|
1,617
|
|
||||||||||||
Actuarial pension loss
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
||||||||||||
Unrealized gain on foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
51
|
|
|
|
|
51
|
|
||||||||||||
Balance at June 27, 2014
|
261
|
|
|
$
|
3
|
|
|
(27
|
)
|
|
$
|
(1,570
|
)
|
|
$
|
2,331
|
|
|
$
|
12
|
|
|
$
|
8,066
|
|
|
$
|
8,842
|
|
Employee stock plans
|
|
|
|
|
6
|
|
|
241
|
|
|
(93
|
)
|
|
|
|
|
|
148
|
|
||||||||||
Stock based compensation
|
|
|
|
|
|
|
|
|
162
|
|
|
|
|
|
|
162
|
|
||||||||||||
Stock awards assumed in acquisition
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
3
|
|
||||||||||||
Increase in excess tax benefits from employee stock plans
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
19
|
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
(10
|
)
|
|
(970
|
)
|
|
|
|
|
|
|
|
(970
|
)
|
|||||||||||
Dividends to shareholders
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
(424
|
)
|
|
(418
|
)
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
1,465
|
|
|
1,465
|
|
||||||||||||
Actuarial pension loss
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
||||||||||||
Unrealized loss on foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
(30
|
)
|
||||||||||||
Balance at July 3, 2015
|
261
|
|
|
$
|
3
|
|
|
(31
|
)
|
|
$
|
(2,299
|
)
|
|
$
|
2,428
|
|
|
$
|
(20
|
)
|
|
$
|
9,107
|
|
|
$
|
9,219
|
|
|
Years Ended
|
||||||||||
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Net income
|
$
|
1,465
|
|
|
$
|
1,617
|
|
|
$
|
980
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
232
|
|
|
235
|
|
|
241
|
|
|||
Employee stock options and other
|
5
|
|
|
7
|
|
|
5
|
|
|||
Diluted
|
237
|
|
|
242
|
|
|
246
|
|
|||
Income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
6.31
|
|
|
$
|
6.88
|
|
|
$
|
4.07
|
|
Diluted
|
$
|
6.18
|
|
|
$
|
6.68
|
|
|
$
|
3.98
|
|
Anti-dilutive potential common shares excluded*
|
1
|
|
|
2
|
|
|
3
|
|
*
|
For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive.
|
|
Actuarial
Pension
Gains
(Losses)
|
|
Foreign
Currency
Translation
Gains
(Losses)
|
|
Unrealized
Gains
(Losses)
on Foreign
Exchange
Contracts
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
Balance at June 29, 2012
|
$
|
(3
|
)
|
|
$
|
4
|
|
|
$
|
(16
|
)
|
|
$
|
(15
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
14
|
|
|
(4
|
)
|
|
(43
|
)
|
|
(33
|
)
|
||||
Net current-period other comprehensive income (loss)
|
14
|
|
|
(4
|
)
|
|
(30
|
)
|
|
(20
|
)
|
||||
Balance at June 28, 2013
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(46
|
)
|
|
$
|
(35
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(4
|
)
|
|
—
|
|
|
38
|
|
|
34
|
|
||||
Net current-period other comprehensive income (loss)
|
(4
|
)
|
|
—
|
|
|
51
|
|
|
47
|
|
||||
Balance at June 27, 2014
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
12
|
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
(74
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(2
|
)
|
|
—
|
|
|
44
|
|
|
42
|
|
||||
Net current-period other comprehensive income (loss)
|
(2
|
)
|
|
—
|
|
|
(30
|
)
|
|
(32
|
)
|
||||
Balance at July 3, 2015
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
(20
|
)
|
|
July 3,
2015 |
|
June 27,
2014 |
||||
|
(In millions)
|
||||||
Inventories:
|
|
|
|
||||
Raw materials and component parts
|
$
|
168
|
|
|
$
|
168
|
|
Work-in-process
|
500
|
|
|
493
|
|
||
Finished goods
|
700
|
|
|
565
|
|
||
Total inventories
|
$
|
1,368
|
|
|
$
|
1,226
|
|
Property, plant and equipment:
|
|
|
|
||||
Land and buildings
|
$
|
1,441
|
|
|
$
|
1,364
|
|
Machinery and equipment
|
6,520
|
|
|
6,109
|
|
||
Furniture and fixtures
|
71
|
|
|
54
|
|
||
Leasehold improvements
|
276
|
|
|
254
|
|
||
Construction-in-process
|
296
|
|
|
342
|
|
||
Total property, plant and equipment
|
8,604
|
|
|
8,123
|
|
||
Accumulated depreciation
|
(5,639
|
)
|
|
(4,830
|
)
|
||
Property, plant and equipment, net
|
$
|
2,965
|
|
|
$
|
3,293
|
|
|
July 3,
2015 |
|
June 27,
2014 |
||||
Term loan
|
$
|
2,312
|
|
|
$
|
2,438
|
|
Less amounts due in one year
|
(156
|
)
|
|
(125
|
)
|
||
Long-term debt
|
$
|
2,156
|
|
|
$
|
2,313
|
|
2016
|
$
|
40
|
|
2017
|
32
|
|
|
2018
|
26
|
|
|
2019
|
23
|
|
|
2020
|
19
|
|
|
Thereafter
|
45
|
|
|
Total future minimum payments
|
$
|
185
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Warranty accrual, beginning of period
|
$
|
182
|
|
|
$
|
187
|
|
|
$
|
260
|
|
Warranty liabilities assumed as a result of acquisitions
|
1
|
|
|
4
|
|
|
—
|
|
|||
Charges to operations
|
187
|
|
|
170
|
|
|
178
|
|
|||
Utilization
|
(190
|
)
|
|
(207
|
)
|
|
(221
|
)
|
|||
Changes in estimate related to pre-existing warranties
|
41
|
|
|
28
|
|
|
(30
|
)
|
|||
Warranty accrual, end of period
|
$
|
221
|
|
|
$
|
182
|
|
|
$
|
187
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net revenue(1):
|
|
|
|
|
|
||||||
United States
|
$
|
3,054
|
|
|
$
|
3,013
|
|
|
$
|
3,403
|
|
China
|
2,726
|
|
|
3,499
|
|
|
4,145
|
|
|||
Asia
|
4,552
|
|
|
4,756
|
|
|
4,129
|
|
|||
Europe, Middle East and Africa
|
3,169
|
|
|
3,117
|
|
|
3,056
|
|
|||
Other
|
1,071
|
|
|
745
|
|
|
618
|
|
|||
Total
|
$
|
14,572
|
|
|
$
|
15,130
|
|
|
$
|
15,351
|
|
Long-lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
2,465
|
|
|
$
|
2,415
|
|
|
$
|
1,517
|
|
China
|
218
|
|
|
279
|
|
|
348
|
|
|||
Asia
|
3,655
|
|
|
4,002
|
|
|
4,434
|
|
|||
Europe, Middle East and Africa
|
326
|
|
|
83
|
|
|
139
|
|
|||
Total
|
$
|
6,664
|
|
|
$
|
6,779
|
|
|
$
|
6,438
|
|
(1)
|
Net revenue is attributed to geographic regions based on the ship to location of the customer.
|
|
Number
of Shares
|
|
Weighted Average
Exercise Price
Per Share
|
|
Weighted Average
Remaining
Contractual Life
(in years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Options outstanding at June 29, 2012
|
15.8
|
|
|
$
|
21.89
|
|
|
|
|
|
||
Granted
|
3.4
|
|
|
43.51
|
|
|
|
|
|
|||
Exercised
|
(6.8
|
)
|
|
18.53
|
|
|
|
|
|
|||
Forfeited or expired
|
(0.5
|
)
|
|
32.72
|
|
|
|
|
|
|||
Options outstanding at June 28, 2013
|
11.9
|
|
|
$
|
29.47
|
|
|
|
|
|
||
Granted
|
1.6
|
|
|
68.96
|
|
|
|
|
|
|||
Assumed
|
1.7
|
|
|
38.18
|
|
|
|
|
|
|||
Exercised
|
(4.5
|
)
|
|
25.22
|
|
|
|
|
|
|||
Forfeited or expired
|
(0.6
|
)
|
|
67.23
|
|
|
|
|
|
|||
Options outstanding at June 27, 2014
|
10.1
|
|
|
$
|
37.03
|
|
|
|
|
|
||
Granted
|
1.2
|
|
|
94.10
|
|
|
|
|
|
|||
Assumed
|
0.1
|
|
|
3.49
|
|
|
|
|
|
|||
Exercised
|
(4.1
|
)
|
|
31.90
|
|
|
|
|
|
|||
Forfeited or expired
|
(0.5
|
)
|
|
56.41
|
|
|
|
|
|
|||
Options outstanding at July 3, 2015
|
6.8
|
|
|
$
|
50.00
|
|
|
4.3
|
|
$
|
242
|
|
Exercisable at July 3, 2015
|
3.4
|
|
|
$
|
34.81
|
|
|
3.2
|
|
$
|
161
|
|
Vested and expected to vest after July 3, 2015
|
6.7
|
|
|
$
|
49.45
|
|
|
4.3
|
|
$
|
241
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of
Exercise Prices
|
Number
of Shares
|
|
Weighted Average
Remaining
Contractual Life
(in years)
|
|
Weighted Average
Exercise Price
|
|
Number
of Shares
|
|
Weighted Average
Exercise Price
|
||||||
$2.99 – $16.85
|
1.1
|
|
|
4.7
|
|
$
|
11.03
|
|
|
0.7
|
|
|
$
|
10.57
|
|
$17.52 – $29.60
|
1.3
|
|
|
2.5
|
|
27.51
|
|
|
1.2
|
|
|
27.35
|
|
||
$30.06 – $41.75
|
0.5
|
|
|
2.6
|
|
36.56
|
|
|
0.4
|
|
|
35.57
|
|
||
$43.11 – $43.11
|
1.4
|
|
|
4.0
|
|
43.11
|
|
|
0.7
|
|
|
43.11
|
|
||
$48.01 – $68.49
|
1.1
|
|
|
5.0
|
|
66.27
|
|
|
0.3
|
|
|
65.87
|
|
||
$69.29 – $388.77
|
1.4
|
|
|
6.0
|
|
102.96
|
|
|
0.1
|
|
|
148.95
|
|
||
|
6.8
|
|
|
4.3
|
|
$
|
50.00
|
|
|
3.4
|
|
|
34.81
|
|
|
Number
of Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
RSUs outstanding at June 29, 2012
|
3.7
|
|
|
$
|
33.19
|
|
Granted
|
1.7
|
|
|
43.14
|
|
|
Vested
|
(1.4
|
)
|
|
37.89
|
|
|
Forfeited or expired
|
(0.4
|
)
|
|
35.46
|
|
|
RSUs outstanding at June 28, 2013
|
3.6
|
|
|
$
|
35.82
|
|
Granted
|
1.4
|
|
|
69.08
|
|
|
Assumed
|
0.2
|
|
|
62.73
|
|
|
Vested
|
(1.3
|
)
|
|
33.61
|
|
|
Forfeited or expired
|
(0.2
|
)
|
|
47.62
|
|
|
RSUs outstanding at June 27, 2014
|
3.7
|
|
|
$
|
49.77
|
|
Granted
|
1.3
|
|
|
100.13
|
|
|
Vested
|
(1.7
|
)
|
|
42.24
|
|
|
Forfeited or expired
|
(0.3
|
)
|
|
67.31
|
|
|
RSUs outstanding at July 3, 2015
|
3.0
|
|
|
$
|
73.80
|
|
Expected to vest after July 3, 2015
|
2.9
|
|
|
$
|
73.28
|
|
|
2015
|
|
2014
|
|
2013
|
Suboptimal exercise factor
|
2.52
|
|
2.07
|
|
1.90
|
Range of risk-free interest rates
|
0.11% to 2.16%
|
|
0.10% to 2.44%
|
|
0.14% to 1.96%
|
Range of expected stock price volatility
|
0.23 to 0.47
|
|
0.27 to 0.50
|
|
0.36 to 0.53
|
Weighted average expected volatility
|
0.36
|
|
0.43
|
|
0.49
|
Post-vesting termination rate
|
1.25%
|
|
3.10%
|
|
2.16%
|
Dividend yield
|
1.69%
|
|
1.58%
|
|
2.53%
|
Fair value
|
$32.19
|
|
$24.14
|
|
$15.75
|
|
ESPP
|
||||
|
2015
|
|
2014
|
|
2013
|
Option life (in years)
|
1.26
|
|
1.24
|
|
1.24
|
Risk-free interest rate
|
0.45%
|
|
0.26%
|
|
0.23%
|
Stock price volatility
|
0.26
|
|
0.31
|
|
0.42
|
Dividend yield
|
2.34%
|
|
1.64%
|
|
1.61%
|
Fair value
|
$14.50
|
|
$14.62
|
|
$10.36
|
|
Number
of Shares
|
|
Maximum shares issuable in connection with:
|
|
|
Outstanding awards and shares available for award grants
|
16.6
|
|
ESPP
|
4.8
|
|
Total
|
21.4
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign
|
$
|
1,501
|
|
|
$
|
1,664
|
|
|
$
|
870
|
|
Domestic
|
76
|
|
|
88
|
|
|
352
|
|
|||
Income before income taxes
|
$
|
1,577
|
|
|
$
|
1,752
|
|
|
$
|
1,222
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Foreign
|
$
|
54
|
|
|
$
|
47
|
|
|
$
|
57
|
|
Domestic-federal
|
43
|
|
|
98
|
|
|
149
|
|
|||
Domestic-state
|
(13
|
)
|
|
3
|
|
|
1
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Foreign
|
12
|
|
|
(3
|
)
|
|
(7
|
)
|
|||
Domestic-federal
|
11
|
|
|
(14
|
)
|
|
(46
|
)
|
|||
Domestic-state
|
5
|
|
|
4
|
|
|
88
|
|
|||
Income tax provision
|
$
|
112
|
|
|
$
|
135
|
|
|
$
|
242
|
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Sales related reserves and accrued expenses not currently deductible
|
$
|
50
|
|
|
$
|
38
|
|
Accrued compensation and benefits not currently deductible
|
138
|
|
|
190
|
|
||
Domestic net operating loss carryforward
|
137
|
|
|
130
|
|
||
Business credit carryforward
|
167
|
|
|
155
|
|
||
Long-lived assets
|
49
|
|
|
58
|
|
||
Other
|
65
|
|
|
65
|
|
||
Total deferred tax assets
|
606
|
|
|
636
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Long-lived assets
|
(126
|
)
|
|
(152
|
)
|
||
Other
|
(10
|
)
|
|
(11
|
)
|
||
Total deferred tax liabilities
|
(136
|
)
|
|
(163
|
)
|
||
Valuation allowances
|
(166
|
)
|
|
(128
|
)
|
||
Deferred tax assets, net
|
$
|
304
|
|
|
$
|
345
|
|
Deferred tax assets:
|
|
|
|
||||
Current portion (included in other current assets)
|
$
|
167
|
|
|
$
|
184
|
|
Non-current portion (included in other non-current assets)
|
273
|
|
|
324
|
|
||
Total deferred tax assets
|
440
|
|
|
508
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Current portion (included in other current assets)
|
(1
|
)
|
|
(2
|
)
|
||
Non-current portion (included in other non-current assets)
|
(135
|
)
|
|
(161
|
)
|
||
Total deferred tax liabilities
|
(136
|
)
|
|
(163
|
)
|
||
Deferred tax assets, net
|
$
|
304
|
|
|
$
|
345
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Unrecognized tax benefit at beginning of period
|
$
|
300
|
|
|
$
|
240
|
|
|
$
|
280
|
|
Gross increases related to current year tax positions
|
44
|
|
|
27
|
|
|
29
|
|
|||
Gross increases related to prior year tax positions
|
6
|
|
|
26
|
|
|
10
|
|
|||
Gross decreases related to prior year tax positions
|
—
|
|
|
(5
|
)
|
|
(8
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(64
|
)
|
|||
Lapse of statute of limitations
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Acquisitions
|
3
|
|
|
12
|
|
|
—
|
|
|||
Unrecognized tax benefit at end of period
|
$
|
350
|
|
|
$
|
300
|
|
|
$
|
240
|
|
|
Fair Value Measurements at
Reporting Date Using
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
135
|
|
Total cash equivalents
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
U.S. Government agency securities
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Commercial paper
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
||||
Certificates of deposit
|
—
|
|
|
99
|
|
|
—
|
|
|
99
|
|
||||
Total short-term investments
|
—
|
|
|
262
|
|
|
—
|
|
|
262
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
—
|
|
|
237
|
|
|
—
|
|
|
237
|
|
||||
U.S. Government agency securities
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
||||
Total long-term investments
|
—
|
|
|
328
|
|
|
—
|
|
|
328
|
|
||||
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
135
|
|
|
$
|
590
|
|
|
$
|
—
|
|
|
$
|
725
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
Fair Value Measurements at
Reporting Date Using
|
|
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
756
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
756
|
|
Bank acceptances
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total cash equivalents
|
756
|
|
|
1
|
|
|
—
|
|
|
757
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Government agency securities
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
||||
Commercial paper
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||
Certificates of deposit
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
||||
Total short-term investments
|
—
|
|
|
284
|
|
|
—
|
|
|
284
|
|
||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
—
|
|
|
180
|
|
|
—
|
|
|
180
|
|
||||
U.S. Government agency securities
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||
Total long-term investments
|
—
|
|
|
215
|
|
|
—
|
|
|
215
|
|
||||
Foreign exchange contracts
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Total assets at fair value
|
$
|
756
|
|
|
$
|
507
|
|
|
$
|
—
|
|
|
$
|
1,263
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Cost Basis
|
|
Unrealized Gains (Losses)
|
|
Fair Value
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||
U.S. Treasury securities
|
$
|
287
|
|
|
$
|
—
|
|
|
$
|
287
|
|
U.S. Government agency securities
|
95
|
|
|
—
|
|
|
95
|
|
|||
Commercial paper
|
109
|
|
|
—
|
|
|
109
|
|
|||
Certificates of deposit
|
99
|
|
|
—
|
|
|
99
|
|
|||
Total
|
$
|
590
|
|
|
$
|
—
|
|
|
$
|
590
|
|
|
Cost Basis
|
|
Unrealized Gains (Losses)
|
|
Fair Value
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
||||||
U.S. Treasury securities
|
$
|
180
|
|
|
$
|
—
|
|
|
$
|
180
|
|
U.S. Government agency securities
|
88
|
|
|
—
|
|
|
88
|
|
|||
Commercial paper
|
165
|
|
|
—
|
|
|
165
|
|
|||
Certificates of deposit
|
66
|
|
|
—
|
|
|
66
|
|
|||
Total
|
$
|
499
|
|
|
$
|
—
|
|
|
$
|
499
|
|
|
Cost Basis
|
|
Fair Value
|
||||
Due in less than one year (short-term investments)
|
$
|
262
|
|
|
$
|
262
|
|
Due in one to five years (included in other non-current assets)
|
328
|
|
|
328
|
|
||
Total
|
$
|
590
|
|
|
$
|
590
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
Derivatives Designated as
Hedging Instruments
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||||||
Foreign exchange contracts
|
|
Other current
assets
|
|
$
|
—
|
|
|
Other current
assets
|
|
$
|
7
|
|
|
Accrued
expenses
|
|
$
|
31
|
|
|
Accrued
expenses
|
|
$
|
2
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||||||||
Derivatives Designated as
Hedging Instruments
|
Gross Amounts of Recognized Assets (Liabilities)
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received or Pledged
|
|
Net Amount
|
||||||||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial liabilities
|
(31
|
)
|
|
—
|
|
|
$
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||
Total derivative instruments
|
$
|
(31
|
)
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||||||||
Derivatives Designated as
Hedging Instruments
|
Gross Amounts of Recognized Assets (Liabilities)
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts of Assets (Liabilities) Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received or Pledged
|
|
Net Amount
|
||||||||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial assets
|
$
|
9
|
|
|
$
|
(2
|
)
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Financial liabilities
|
(4
|
)
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Total derivative instruments
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
Amount of Gain
(Loss)
Recognized in
Accumulated
Other Comprehensive Income
on Derivatives
|
|
Location of Gain (Loss)
Reclassified from
Accumulated
Other Comprehensive Income into Income
|
|
Amount of Gain (Loss)
Reclassified
from
Accumulated
Other Comprehensive Income into
Income
|
||||||||||||
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|||||||||
Foreign exchange contracts
|
|
$
|
(74
|
)
|
|
$
|
13
|
|
|
Cost of revenue
|
|
$
|
(44
|
)
|
|
$
|
(38
|
)
|
|
|
Carrying Amount
|
||
Balance as of June 28, 2013
|
|
$
|
1,954
|
|
Goodwill recorded in connection with acquisitions
|
|
605
|
|
|
Balance as of June 27, 2014
|
|
$
|
2,559
|
|
Goodwill recorded in connection with acquisitions
|
|
207
|
|
|
Balance as of July 3, 2015
|
|
$
|
2,766
|
|
|
|
Weighted Average
Amortization
Period
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|||||||
|
|
(in years)
|
|
(in millions)
|
|
(in millions)
|
|
(in millions)
|
|||||||
Existing technology
|
|
5
|
|
|
$
|
638
|
|
|
$
|
471
|
|
|
$
|
167
|
|
Customer relationships
|
|
4
|
|
|
152
|
|
|
126
|
|
|
26
|
|
|||
Other
|
|
3
|
|
|
74
|
|
|
68
|
|
|
6
|
|
|||
Leasehold interests
|
|
31
|
|
|
39
|
|
|
11
|
|
|
28
|
|
|||
In-process research and development
|
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
|||
Total
|
|
|
|
$
|
1,008
|
|
|
$
|
676
|
|
|
$
|
332
|
|
|
|
Weighted Average
Amortization Period
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|||||||
|
|
(in years)
|
|
(in millions)
|
|
(in millions)
|
|
(in millions)
|
|||||||
Existing technology
|
|
5
|
|
|
$
|
566
|
|
|
$
|
368
|
|
|
$
|
198
|
|
Customer relationships
|
|
4
|
|
|
148
|
|
|
97
|
|
|
51
|
|
|||
Other
|
|
3
|
|
|
73
|
|
|
55
|
|
|
18
|
|
|||
Leasehold interests
|
|
32
|
|
|
43
|
|
|
10
|
|
|
33
|
|
|||
In-process research and development
|
|
—
|
|
|
154
|
|
|
—
|
|
|
154
|
|
|||
Total
|
|
|
|
$
|
984
|
|
|
$
|
530
|
|
|
$
|
454
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Change in benefit obligation:
|
|
|
|
|
|
||||||
Benefit obligation at beginning of period
|
$
|
255
|
|
|
$
|
234
|
|
|
$
|
286
|
|
Service cost
|
9
|
|
|
10
|
|
|
11
|
|
|||
Interest cost
|
4
|
|
|
4
|
|
|
5
|
|
|||
Actuarial gain
|
16
|
|
|
13
|
|
|
(4
|
)
|
|||
Benefits paid
|
(8
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|||
Other
(1)
|
—
|
|
|
8
|
|
|
—
|
|
|||
Non-U.S. currency movement
|
(45
|
)
|
|
(7
|
)
|
|
(58
|
)
|
|||
Benefit obligation at end of period
|
231
|
|
|
255
|
|
|
234
|
|
|||
Change in plan assets:
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
191
|
|
|
167
|
|
|
167
|
|
|||
Actual return on plan assets
|
22
|
|
|
15
|
|
|
29
|
|
|||
Employer contributions
|
14
|
|
|
14
|
|
|
15
|
|
|||
Benefits paid
|
(8
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|||
Other
(1)
|
—
|
|
|
7
|
|
|
—
|
|
|||
Non-U.S. currency movement
|
(34
|
)
|
|
(5
|
)
|
|
(38
|
)
|
|||
Fair value of plan assets at end of period
|
185
|
|
|
191
|
|
|
167
|
|
|||
Unfunded status at end of year
|
$
|
46
|
|
|
$
|
64
|
|
|
$
|
67
|
|
(1)
|
During fiscal 2014 the Japan entity assumed benefit obligations and plan assets from Hitachi. These pension obligations related to former Hitachi employees who were hired into the HGST Japan entity during or soon after the 2012 acquisition of HGST by the Company.
|
|
2015
|
|
2014
|
||||
Current liabilities
|
$
|
1
|
|
|
$
|
1
|
|
Non-current liabilities
|
45
|
|
|
63
|
|
||
Net amount recognized
|
$
|
46
|
|
|
$
|
64
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Discount rate
|
1.3
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
Rate of compensation increase
|
0.9
|
%
|
|
1.0
|
%
|
|
0.9
|
%
|
|
2015
|
|
2014
|
|
2013
|
|||
Discount rate
|
1.6
|
%
|
|
1.6
|
%
|
|
1.8
|
%
|
Expected long-term rate of return on plan assets
|
3.5
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
Rate of compensation increase
|
1.0
|
%
|
|
0.9
|
%
|
|
1.2
|
%
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity:
|
|
|
|
|
|
||||||||||
Equity commingled/mutual funds
(1)(2)
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
65
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|||||||
Fixed income commingled/mutual funds
(1)(3)
|
—
|
|
|
112
|
|
|
—
|
|
|
112
|
|
||||
Cash and short-term investments
|
6
|
|
|
2
|
|
|
—
|
|
|
8
|
|
||||
Fair value of plan assets
|
$
|
6
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
185
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity:
|
|
|
|
|
|
|
|
||||||||
Equity commingled/mutual funds
(1)(2)
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
69
|
|
Fixed income:
|
|
|
|
|
|
|
|
|
|||||||
Fixed income commingled/mutual funds
(1)(3)
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
||||
Cash and short-term investments
|
8
|
|
|
3
|
|
|
—
|
|
|
11
|
|
||||
Fair value of plan assets
|
$
|
8
|
|
|
$
|
183
|
|
|
$
|
—
|
|
|
$
|
191
|
|
(1)
|
Commingled funds represent pooled institutional investments.
|
(2)
|
Equity mutual funds invest primarily in equity securities.
|
(3)
|
Fixed income mutual funds invest primarily in fixed income securities.
|
|
March 9,
2015
|
||
Tangible assets acquired and liabilities assumed
|
$
|
(24
|
)
|
Intangible assets
|
76
|
|
|
Goodwill
|
215
|
|
|
Total
|
$
|
267
|
|
|
|
Years Ended
|
||||||||||
|
|
July 3,
2015 |
|
June 27,
2014 |
|
June 28,
2013 |
||||||
Employee termination benefits
|
|
$
|
82
|
|
|
$
|
27
|
|
|
$
|
109
|
|
Impairment of assets
|
|
82
|
|
|
62
|
|
|
14
|
|
|||
Contract termination and other
|
|
12
|
|
|
6
|
|
|
15
|
|
|||
Total
|
|
$
|
176
|
|
|
$
|
95
|
|
|
$
|
138
|
|
|
June 28,
2013 |
|
Accruals
|
|
Payments
|
|
June 27,
2014 |
|
Accruals
|
|
Payments
|
|
July 3,
2015 |
||||||||||||||
Employee termination benefits
|
$
|
37
|
|
|
$
|
27
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
82
|
|
|
$
|
(72
|
)
|
|
$
|
10
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2015 (1)
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
3,943
|
|
|
$
|
3,888
|
|
|
$
|
3,550
|
|
|
$
|
3,191
|
|
Gross profit
|
1,149
|
|
|
1,110
|
|
|
1,032
|
|
|
930
|
|
||||
Operating income
|
469
|
|
|
466
|
|
|
421
|
|
|
255
|
|
||||
Net income
|
423
|
|
|
438
|
|
|
384
|
|
|
220
|
|
||||
Basic income per common share
|
$
|
1.81
|
|
|
$
|
1.88
|
|
|
$
|
1.66
|
|
|
$
|
0.95
|
|
Diluted income per common share
|
$
|
1.76
|
|
|
$
|
1.84
|
|
|
$
|
1.63
|
|
|
$
|
0.94
|
|
2014 (2)
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
3,804
|
|
|
$
|
3,972
|
|
|
$
|
3,703
|
|
|
$
|
3,651
|
|
Gross profit
|
1,099
|
|
|
1,156
|
|
|
1,076
|
|
|
1,029
|
|
||||
Operating income
|
542
|
|
|
478
|
|
|
419
|
|
|
352
|
|
||||
Net income
|
495
|
|
|
430
|
|
|
375
|
|
|
317
|
|
||||
Basic income per common share
|
$
|
2.10
|
|
|
$
|
1.82
|
|
|
$
|
1.60
|
|
|
$
|
1.35
|
|
Diluted income per common share
|
$
|
2.05
|
|
|
$
|
1.77
|
|
|
$
|
1.55
|
|
|
$
|
1.32
|
|
(1)
|
The first, second, third, and fourth quarters of 2015 included $9 million, $53 million, $10 million, and $104 million, respectively, of employee termination, asset impairment, and other charges. The first and second quarters of 2015 included $14 million and $1 million, respectively, of charges related to interest on an arbitration award. The second quarter of 2015 included a $37 million gain on flood-related insurance recovery.
|
(2)
|
The first, second, third and fourth quarters of 2014 included $11 million, $23 million, $25 million and $36 million, respectively, of employee termination, asset impairment and other charges. Each of the four quarters of 2014 included $13 million of charges related to interest on an arbitration award. The first quarter of 2014 included a $65 million gain on flood-related insurance recovery.
|
|
Allowance for
Doubtful
Accounts
|
||
Balance at June 29, 2012
|
$
|
9
|
|
Additions charges to operations
|
8
|
|
|
Deductions
|
(10
|
)
|
|
Recovery
|
2
|
|
|
Balance at June 28, 2013
|
$
|
9
|
|
Additions charged to operations
|
3
|
|
|
Deductions
|
(1
|
)
|
|
Balance at June 27, 2014
|
$
|
11
|
|
Deductions
|
(4
|
)
|
|
Balance at July 3, 2015
|
$
|
7
|
|
|
WESTERN DIGITAL CORPORATION
|
|
|
|
|
|
By:
|
/s/ OLIVIER C. LEONETTI
|
|
|
Olivier C. Leonetti
|
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ STEPHEN D. MILLIGAN
|
|
President and Chief Executive Officer
(Principal Executive Officer), Director
|
|
August 21, 2015
|
Stephen D. Milligan
|
|
|
||
|
|
|
||
/s/ OLIVIER C. LEONETTI
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
August 21, 2015
|
Olivier C. Leonetti
|
|
|
||
|
|
|
|
|
/s/ THOMAS E. PARDUN
|
|
Chairman of the Board
|
|
August 21, 2015
|
Thomas E. Pardun
|
|
|
||
|
|
|
||
/s/ MARTIN I. COLE
|
|
Director
|
|
August 21, 2015
|
Martin I. Cole
|
|
|
||
|
|
|
||
/s/ KATHLEEN A. COTE
|
|
Director
|
|
August 21, 2015
|
Kathleen A. Cote
|
|
|
||
|
|
|
||
/s/ HENRY T. DENERO
|
|
Director
|
|
August 21, 2015
|
Henry T. DeNero
|
|
|
||
|
|
|
||
/s/ MICHAEL D. LAMBERT
|
|
Director
|
|
August 21, 2015
|
Michael D. Lambert
|
|
|
||
|
|
|
||
/s/ LEN J. LAUER
|
|
Director
|
|
August 21, 2015
|
Len J. Lauer
|
|
|
||
|
|
|
||
/s/ MATTHEW E. MASSENGILL
|
|
Director
|
|
August 21, 2015
|
Matthew E. Massengill
|
|
|
||
|
|
|
||
/s/ PAULA A. PRICE
|
|
Director
|
|
August 21, 2015
|
Paula A. Price
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Western Digital Corporation, as amended to date (Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 8, 2006)
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of Western Digital Corporation, as amended effective as of November 14, 2013 (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 14, 2013)
|
|
|
|
10.1
|
|
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan, amended and restated as of August 7, 2012 (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 13, 2012)*
|
|
|
|
10.1.1
|
|
Form of Notice of Grant of Stock Option and Option Agreement - Executives, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on October 28, 2011)*
|
|
|
|
10.1.2
|
|
Form of Notice of Stock Option Grant and Stock Option Agreement - Non-Executives, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (Filed as Exhibit 10.1.5 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 16, 2006) *
|
|
|
|
10.1.3
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement - Executives, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on October 28, 2011)*
|
|
|
|
10.1.4
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (Filed as Exhibit 10.1.6 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on October 31, 2008)*
|
|
|
|
10.1.5
|
|
Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (Filed as Exhibit 10.1.7 to the Company’s Annual Report on Form 10-K (File No. 1-08703) with the Securities and Exchange Commission on August 20, 2012)*
|
|
|
|
10.1.6
|
|
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan Non-Employee Director Option Grant Program, as amended September 6, 2012, and Form of Notice of Grant of Stock Option and Option Agreement - Non-Employee Directors (Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)*
|
|
|
|
10.1.7
|
|
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, as amended September 6, 2012 (Filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)*
|
|
|
|
10.1.8
|
|
Western Digital Corporation Incentive Compensation Plan, as Amended and Restated August 5, 2015†*
|
|
|
|
10.2
|
|
Western Digital Corporation 2005 Employee Stock Purchase Plan, as amended August 6, 2012 (Filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 333-185194) with the Securities and Exchange Commission on November 29, 2012)*
|
|
|
|
10.3
|
|
Western Digital Corporation Summary of Compensation Arrangements for Named Executive Officers and Directors†*
|
|
|
|
10.4
|
|
Amended and Restated Deferred Compensation Plan, amended and restated effective January 1, 2013 (Filed as Exhibit 10.4 to the Company’s Annual Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)*
|
|
|
|
10.5
|
|
Amended and Restated Employment Agreement, dated as of September 6, 2012, between Western Digital Corporation and Stephen D. Milligan (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 2, 2012)*
|
|
|
|
10.6
|
|
Separation and General Release Agreement, dated August 25, 2014, between Western Digital Corporation and Timothy M. Leyden (Filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 4, 2014)*
|
|
|
|
10.7
|
|
Western Digital Corporation Amended and Restated Change of Control Severance Plan, amended and restated as of September 11, 2014 (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 4, 2014)*
|
|
|
|
10.8
|
|
Western Digital Corporation Executive Severance Plan, amended and restated as of February 4, 2015 (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2015)*
|
|
|
|
10.9
|
|
Form of Indemnity Agreement for Directors of Western Digital Corporation (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 8, 2002)*
|
|
|
|
10.10
|
|
Form of Indemnity Agreement for Officers of Western Digital Corporation (Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 8, 2002)*
|
|
|
|
10.11
|
|
Offer Letter, dated August 14, 2014, to Olivier C. Leonetti (Filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on November 4, 2014)*
|
|
|
|
10.12
|
|
Credit Agreement, dated as of January 9, 2014, among Western Digital Technologies, Inc. and Western Digital Ireland, Ltd., as Borrowers; Western Digital Corporation, as Holdings; JPMorgan Chase Bank, N.A., as Administrative Agent; the other lenders party thereto; J.P. Morgan Securities LLC, as Sole Lead Arranger and Joint Bookrunner; HSBC Bank USA, N.A., Royal Bank of Canada, Bank of America, N.A. and Citibank, N.A., as Co-Syndication Agents (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on January 9, 2014)
|
|
|
|
10.12.1
|
|
First Amendment to Credit Agreement, dated as of February 25, 2015, to the Credit Agreement dated as of January 9, 2014, among Western Digital Technologies, Inc. and Western Digital Ireland, Ltd., as borrowers, Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto from time to time (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 12, 2015)
|
|
|
|
10.13
|
|
Transition Services Agreement, dated March 7, 2011, among Hitachi, Ltd., Viviti Technologies Ltd. and Western Digital Corporation (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on May 2, 2011)
|
|
|
|
21
|
|
Subsidiaries of Western Digital Corporation†
|
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm†
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
101.INS
|
|
XBRL Instance Document†
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document†
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document†
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document†
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document†
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document†
|
†
|
Filed with this report.
|
**
|
Furnished with this report.
|
*
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.
|
Named Executive Officer
|
Title
|
Current
Base Salary
|
||
Stephen D. Milligan
|
President and Chief Executive Officer
|
$
|
1,050,000
|
|
Michael D. Cordano
|
President, HGST Subsidiary
|
$
|
700,000
|
|
James J. Murphy
|
President, WD Subsidiary
|
$
|
625,000
|
|
Mark P. Long
|
Executive Vice President, Chief Strategy Officer
|
$
|
500,000
|
|
Type of Fee
|
Current Annual
Retainer Fees
|
||
Annual Retainer
|
$
|
75,000
|
|
Lead Independent Director Retainer
|
$
|
20,000
|
|
Non-Executive Chairman of Board Retainer
|
$
|
100,000
|
|
Additional Committee Retainers
|
|
||
• Audit Committee
|
$
|
15,000
|
|
• Compensation Committee
|
$
|
12,500
|
|
• Governance Committee
|
$
|
7,500
|
|
Additional Committee Chairman Retainers
|
|
||
• Audit Committee
|
$
|
25,000
|
|
• Compensation Committee
|
$
|
22,500
|
|
• Governance Committee
|
$
|
12,500
|
|
1.
|
Purpose.
|
2.
|
Definitions.
|
3.
|
Administration of the Plan.
|
3.1
|
The Administrator.
This Plan shall be administered by the Administrator; provided, however, that, with respect to Participants who are not Executive Officers, the Chief Executive Officer may delegate to one or more officers of the Company or any Subsidiary some or all of the Administrator’s authority under this Plan with respect to one or more Awards.
|
3.2
|
Powers of the Administrator
.
Subject to the express provisions of this Plan and, as applicable, the 2004 Plan, the Administrator shall have responsibility for the administration of this Plan in accordance with its terms, including without limitation the authority to (i) determine eligibility to participate in this Plan and, from those individuals determined to be eligible, the particular individuals who will receive an Award under this Plan, and (ii) establish the terms and conditions applicable to each Award. The Administrator shall have the authority to construe and interpret this Plan and any agreements or other document relating to Awards under this Plan, may adopt rules and regulations relating to the administration of this Plan, and shall exercise all other duties and powers conferred on it by this Plan. Any determination by the Administrator shall be final and binding on all Participants.
|
4.
|
Bonus Provisions.
|
4.1
|
Determination of Company Bonus.
The Company Bonus payable with respect to an Award (if any) will be determined under clauses (a), (b), (c) and (d) of this Section 4.1.
|
(a).
|
Company Performance Percentage.
The Administrator shall establish one or more Company Performance Criteria for the applicable Performance Period and shall provide a formula for measuring the Company’s performance during such Performance Period relative to such Company
|
(b).
|
Funding Percentage.
In the event that the Company Performance Percentage for a Performance Period equals or exceeds such percentage as the Administrator determines in its discretion, the Administrator may allocate a portion of the Company Performance Percentage as it determines to be used for determining a Discretionary Bonus to be paid to Participants at the end of the applicable Performance Period pursuant to Section 4.2 below (such percentage is hereinafter referred to as the
“Discretionary Funding Percentage”
). The remainder of the Company Performance Percentage not allocated by the Administrator pursuant to the foregoing sentence shall equal the
“Company Funding Percentage”
and shall be used for determining the Company Bonus to be paid to Participants at the end of the applicable Performance Period pursuant to Section 4.1(d) below. By way of example and assuming the Administrator allocates ten percent (10%) of the Company Performance Percentage to the Discretionary Funding Percentage, if the Company Performance Percentage for a Performance Period equals one hundred and fifty percent (150%), a Discretionary Funding Percentage may be allocated by the Administrator for such Performance Period in an amount not to exceed fifteen percent (15%) and, in such case, the Company Funding Percentage for such Performance Period shall not be less than one hundred and thirty-five percent (135%).
|
(c).
|
Individual Performance.
At the end of each Performance Period, the Administrator shall evaluate, or cause to be evaluated, the performance of each Participant during the applicable Performance Period and shall designate a measurement for such Participant’s performance during the applicable Performance Period ranging from a minimum of zero (0.0) up to a maximum of three (3.0), or such other amount as determined by the Administrator (the
“Individual Performance Factor”
). The Individual Performance Factor applicable to a Participant shall be determined in accordance with instructions and/or procedures established from time to time by the Administrator.
|
(d).
|
Bonus Determination.
The amount of the Company Bonus payable to a Participant for the applicable Performance Period shall be determined by multiplying (i) the Participant’s Target Bonus, by (ii) the Company Funding Percentage, by (iii) the Individual Performance Factor applicable to such
|
4.2
|
Determination of Discretionary Bonuses.
In addition to any Company Bonus payable to a Participant pursuant to Section 4.1 above and subject to the limitations in this Section 4.2, the Administrator may award Discretionary Bonuses to one or more Participants in any amount as it determines appropriate in its sole discretion. The aggregate of all Discretionary Bonuses payable by the Administrator during a Performance Period shall not exceed the Discretionary Bonus Pool (defined below) for that Performance Period. For purposes hereof,
“Discretionary Bonus Pool”
means the amount obtained by multiplying the aggregate of all Target Bonuses for Awards granted during the Performance Period (excluding Awards that terminate pursuant to Section 4.4) by the Discretionary Funding Percentage.
|
4.3
|
Newly Hired Employees.
Unless otherwise provided by the Administrator, in the event that an individual commences employment with the Company during a Performance Period at a level that has been determined by the Company to be eligible for participation in this Plan for that Performance Period, such individual shall be eligible to receive a Bonus under this Plan for that Performance Period in accordance with this Section 4, provided that such individual’s Target Bonus shall be based on the Eligible Wages the individual actually received during that Performance Period. In addition, an individual must be employed by the Company for at least one month of a Performance Period to be eligible to receive a Bonus during such Performance Period.
|
4.4
|
Termination of Employment.
|
(a).
|
Unless otherwise expressly provided under a separate Company plan or written contract with the Company, in the event that a Participant’s employment with the Company and its Subsidiaries terminates (regardless of the reason for such termination of employment, whether voluntarily or involuntarily, with or without cause, or due to the Participant’s death or disability) at any time during the Performance Period applicable to an Award granted to that Participant, such Award shall immediately terminate upon such termination of employment, and the Participant shall not be entitled to any Bonus payment in respect of such Award.
|
(b).
|
Unless otherwise expressly provided under a separate Company plan or written contract with the Company, in the event that a Participant’s employment with the Company and its Subsidiaries terminates (regardless of the reason for such termination of employment, whether voluntarily or involuntarily, with or without cause, or due to the Participant’s death or disability) after the close of the Performance Period but prior to the Company paying out Bonuses to Participants with respect to such Performance Period, such Participant’s eligibility for a Bonus shall immediately terminate upon such termination of employment, and the Participant shall not be entitled to any Bonus payment.
|
4.5
|
Adjustments; Early Termination.
The Administrator shall have discretion to adjust the performance measures, performance goals, relative weights of the measures, and other provisions of then-outstanding Awards under this Plan to reflect (1) any material change in corporate capitalization, any corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Company, (2) any change in accounting policies or practices or applicable law, (3) the effects of any special charges to the Company’s earnings, or (4) any other special, material or nonrecurring circumstances or extraordinary events. Notwithstanding any other provision herein, the Administrator shall have discretion to terminate any Award granted hereunder in connection with any merger, reorganization or other corporation transaction, as the Administrator may determine in its sole discretion.
|
4.6
|
Administrator Discretion to Determine Bonuses.
The Administrator has the sole discretion to determine the performance goals and criteria for each Award (in accordance with this Section 4) and whether all or any portion of the amount so calculated will be paid, subject in all cases to the terms, conditions and limits of this Plan and of any other written commitment authorized by the Company. To this same extent, the Administrator may at any time establish additional conditions and terms of an Award or for the payment of Bonuses (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or subjective) as the Administrator may deem desirable in carrying out the purposes of this Plan and may take into account such other factors as the Administrator deems appropriate in administering any aspect of this Plan.
|
4.7
|
Form and Time of Payment.
Any Bonuses shall be paid in cash (subject to tax withholding pursuant to Section 5.5) as soon as reasonably practicable following the determination of the Bonus amount pursuant to Sections 4.1 and 4.2 of this Plan, but in no event later than (a) March 15 of the year following the year in which such Bonus is earned, or (b) if later, the last day of the period ending on the 15
th
day of the third month following the end of the Company’s fiscal year in which such Bonus is earned, in each case, in accordance with Treasury Regulation Section 1.409A-1(b)(4)(i).
|
5.
|
General Provisions.
|
5.1
|
Rights of Participants.
|
(c).
|
No Right to Awards or Continued Employment.
Neither the establishment of this Plan, nor the provision for or payment of any amounts hereunder, nor any action of the Company or any of its officers, employees or directors in respect of this Plan shall be held or construed to confer upon any person any legal right to receive, an Award or any other benefit under the Plan. Nothing contained in this Plan (or in any other documents evidencing any Award under this Plan) shall confer upon any employee or Participant any right to continue in the employ of the Company or any Subsidiary, constitute any contract or agreement of employment, nor shall interfere in any way with the right of the Company or any Subsidiary to change any person’s compensation or other benefits, or to terminate his employment, with or without cause. Nothing in this Section 5.1(a), however, is intended to adversely affect any express independent right of such person under a separate written employment contract.
|
(d).
|
Plan Not Funded.
Awards payable under this Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund or deposit shall be made to assure payment of such Awards. No Participant or other person shall have any right, title or interest in any fund or in any specific asset of the Company by reason of any Award hereunder. Neither the provisions of this Plan (nor of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant or other person. To the extent that a Participant or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
|
5.2
|
Non-Transferability of Benefits and Interests.
Except as expressly provided by the Administrator, all Awards are non-transferable, and no benefit payable under this Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge.
|
5.3
|
Discretion of Company and Administrator.
Any decision made or action taken by, or inaction of, the Company or the Administrator arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of the Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such person or entity and shall be conclusive and binding upon all persons. Neither the Administrator, nor any person acting at the direction thereof, nor any member of the Company’s Board of Directors shall be liable for any act,
|
5.4
|
Governing Law.
All questions pertaining to the construction, regulation, validity and effect of the provisions of this Plan shall be determined in accordance with the laws of the State of Delaware, without regard to the choice of law principles thereof.
|
5.5
|
Tax Withholding.
Upon the payment of any Bonus, the Company shall have the right to deduct the amount of any federal, state or local taxes that the Company or any Subsidiary may be required to withhold with respect to such payment.
|
5.6
|
No Vested Rights; Amendments, Suspension or Termination of Plan.
No Participant shall have, at any time, a vested right to any benefit under this Plan. The Company or the Administrator may at any time terminate, amend, modify or suspend this Plan, in whole or in part and/or with respect to any or all Participants.
|
5.7
|
Captions; Construction.
Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof. The masculine pronoun shall include the feminine pronoun and the feminine pronoun shall include the masculine pronoun and the singular pronoun shall include the plural pronoun and the plural pronoun shall include the singular pronoun, unless the context clearly indicates otherwise.
|
5.8
|
Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit the authority of the Company to grant awards or authorize any other compensation under any other plan or authority.
|
5.9
|
Code Section 409A.
Company’s intent is that any payments and benefits paid under this Plan be exempt from, or comply with, Section 409A of the Code, and accordingly, to the maximum extent permitted, this Plan shall be interpreted and administered to be in accordance therewith. Each payment under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments described in this Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise.
|
5.10
|
Effective Date.
This Plan is effective as of August 5, 2015.
|
Name of Entity
|
State or Other Jurisdiction of
Incorporation or Organization
|
Arkeia Software SARL
|
France
|
Arkeia Software, Inc..
|
Delaware
|
Fabrik, LLC
|
Delaware
|
G-Tech, LLC
|
California
|
HGSP (Shenzhen) Co., Ltd.
|
China
|
HGST (Shenzhen) Co., Ltd.
|
China
|
HGST (Thailand) Ltd.
|
Thailand
|
HGST Asia Pte. Ltd.
|
Singapore
|
HGST Consulting (Shanghai) Co., Ltd.
|
China
|
HGST Europe, Ltd.
|
United Kingdom
|
HGST Japan, Ltd.
|
Japan
|
HGST Malaysia Sdn. Bhd.
|
Malaysia
|
HGST Netherlands B.V.
|
Netherlands
|
HGST Philippines Corp.
|
Philippines
|
HGST Singapore Pte. Ltd.
|
Singapore
|
HGST Technologies Malaysia Sdn. Bhd. (formerly known as sTec Technology Sdn. Bhd.)
|
Malaysia
|
HGST Technologies Santa Ana, Inc.
|
California
|
HGST, Inc.
|
Delaware
|
HICAP Properties Corp.
|
Philippines
|
Keen Personal Media, Inc.
|
Delaware
|
Pacifica Insurance Corporation
|
Hawaii
|
Read-Rite International
|
Cayman Islands
|
Read-Rite Philippines, Inc.
|
Philippines
|
RS Patent Holding Corporation
|
Delaware
|
Shenzhen Hailiang Storage Products Co., Ltd.
|
China
|
SiliconSystems, Inc.
|
California
|
SimpleTech, LLC
|
Delaware
|
Skyera, LLC
|
Delaware
|
STEC Bermuda, LP
|
Bermuda
|
STEC Electronics UK Ltd.
|
United Kingdom
|
STEC Europe B.V. (Netherlands)
|
Netherlands
|
STEC Germany GmbH
|
Germany
|
STEC Hong Kong Ltd.
|
Hong Kong
|
STEC India Private Limited
|
India
|
STEC International Holding, Inc.
|
California
|
STEC Italy SRL
|
Italy
|
STEC Japan GK
|
Japan
|
STEC Memory Technology Service (Shanghai) Co. Ltd.
|
China
|
STEC R&D Ltd.
|
Cayman Islands
|
STEC Taiwan Holding Ltd.
|
Cayman Islands
|
Suntech Realty, Inc.
|
Philippines
|
Velobit, Inc.
|
Delaware
|
Virident Systems Australia PTY Limited
|
Australia
|
Virident Systems Private Limited
|
India
|
Virident Systems, Inc.
|
Delaware
|
Virident UK Limited
|
United Kingdom
|
Viviti Technologies Pte. Ltd.
|
Singapore
|
Viviti Technologies US, Inc.
|
Delaware
|
WD Media (Malaysia) Sdn.
|
Malaysia
|
WD Media (Singapore) Pte. Ltd.
|
Singapore
|
WD Media, LLC
|
Delaware
|
Western Digital (Argentina) S.A.
|
Argentina
|
Western Digital (Deutschland) GmbH Ltd.
|
Germany
|
Western Digital (France) SARL
|
France
|
Western Digital (Fremont), LLC
|
Delaware
|
Western Digital (I.S.) Limited
|
Ireland
|
Western Digital (Malaysia) Sdn. Bhd.
|
Malaysia
|
Western Digital (S.E. Asia) Pte Ltd
|
Singapore
|
Western Digital (Thailand) Company Limited
|
Thailand
|
Western Digital (UK) Limited
|
United Kingdom
|
Western Digital Canada Corporation
|
Ontario, Canada
|
Western Digital Capital, LLC
|
Delaware
|
Western Digital Capital Global, Inc.
|
Cayman Islands
|
Western Digital Do Brasil Comercio E Distribuicao De Produtos De Informatica Ltda.
|
Brazil
|
Western Digital Hong Kong Limited
|
Hong Kong
|
Western Digital Information Technology (Shanghai) Company Ltd.
|
China
|
Western Digital International Ltd.
|
Cayman Islands
|
Western Digital Ireland, Ltd.
|
Cayman Islands
|
Western Digital Japan Ltd.
|
Japan
|
Western Digital Korea, Ltd.
|
Republic of Korea
|
Western Digital Latin America, Inc.
|
Delaware
|
Western Digital Netherlands B.V.
|
The Netherlands
|
Western Digital Taiwan Co., Ltd.
|
Taiwan
|
Western Digital Technologies, Inc.
|
Delaware
|
|
/s/
STEPHEN D. MILLIGAN
|
|
Stephen D. Milligan
|
|
President and Chief Executive Officer
|
|
/s/ OLIVIER C. LEONETTI
|
|
Olivier C. Leonetti
|
|
Chief Financial Officer
|
|
/s/
STEPHEN D. MILLIGAN
|
|
Stephen D. Milligan
|
|
President and Chief Executive Officer
|
|
/s/ OLIVIER C. LEONETTI
|
|
Olivier C. Leonetti
|
|
Chief Financial Officer
|