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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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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5601 Great Oaks Parkway
San Jose, California |
95119
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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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Accelerated filer
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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(Do not check if a smaller reporting company)
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PAGE NO.
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Conditions and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Director, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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Item 16.
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Form 10‑K Summary
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•
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expectations regarding our Flash Ventures joint venture with Toshiba Memory Corporation;
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•
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our quarterly cash dividend policy and share repurchase program;
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expectations regarding our product development and technology plans;
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•
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expectations regarding our future results of operations;
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•
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expectations regarding the outcome of legal proceedings in which we are involved;
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•
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expectations regarding the impact of the Tax Cuts and Jobs Act enacted on December 22, 2017 on the Company;
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•
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expectations regarding the repatriation of funds from our foreign operations;
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•
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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;
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expectations regarding capital investments and sources of funding for those investments; and
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our beliefs regarding the sufficiency of our available liquidity to meet our working capital, debt, dividend and capital expenditure needs.
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Item 1.
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Business
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•
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Technology Leadership:
We continue to innovate and develop advanced technologies in both HDD and Flash to deliver timely new products and solutions to meet growing demands for scale, performance and cost efficiency in the market.
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•
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Broad Product Portfolio:
We leverage our capabilities in firmware, software and systems to deliver compelling and differentiated storage solutions to our customers that offer the best combinations of performance, cost, power consumption, form factor, quality and reliability, while creating new use cases for our solutions in emerging markets.
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•
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Operational Excellence:
We are focused on delivering the best value for our customers in data center, client and consumer markets through a relentless focus on appropriately scaling our operations to efficiently support business growth, achieving best in class cost, quality and cycle-time, maintaining industry leading manufacturing capabilities, and having a competitive advantage in supply-chain management.
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•
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enables scaling for efficiency and flexibility, allowing us to leverage our R&D and capital expenditures to deliver storage solutions to multiple markets;
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results in continued diversification of our storage solutions portfolio and entry into additional growing adjacent markets; and
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allows us to achieve strong financial performance, including healthy cash generation, thereby enabling organic and inorganic business investments and allocation of capital to shareholders.
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•
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We treat all employees with dignity and respect and foster diversity and inclusion globally.
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•
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We establish processes and policies for our employees to uphold ethical standards and comply with applicable laws and our internal guidelines, including a Code of Business Ethics adopted by our Board of Directors and applicable to members of our Board of Directors and all employees, a Global Code of Conduct applicable to all employees and an actively-managed ethics hotline.
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•
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We establish policies and procedures intended to promote the idea that the quality of our products and services, consistency of production and employee well-being are predicated on a safe and healthy work environment.
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We establish policies and processes intended to promote environmental responsibility as an integral part of our culture, and we publish an environmental report detailing emissions output and set goals to reduce our greenhouse gas emissions and electronic waste profile.
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We engage with local communities across the globe, focusing on science, technology, engineering and math (targeting underrepresented and underprivileged youth), hunger relief, and environmental quality.
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Item 1A.
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Risk Factors
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•
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Our direct and indirect customers may delay or reduce their purchases of our products and systems containing our products.
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•
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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.
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•
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We extend credit and payment terms to some of our customers and we could suffer significant losses if a customer whose accounts receivable we have not insured, or have underinsured, fails to pay us on their accounts receivable balances.
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If negative or uncertain global economic conditions result in circumstances, such as a sustained decline in our stock price and market capitalization or a decrease in our forecasted cash flows, indicating that the carrying value of our long-lived assets or goodwill may be impaired, we could be required to record a significant charge to earnings in our
Consolidated Financial Statements
.
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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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our ability to successfully transition future core, processor and controller development to the RISC-V architecture;
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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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our ability to respond to customer requests for new products and software associated with our products;
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our ability to incorporate open source software elements into our products and operate in an open source environment;
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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;
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our ability to increase our software development capability; and
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the effectiveness of our go-to-market capability in selling new products.
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our interests could diverge from our partners’ interests or we may not agree with co-venturers on ongoing activities, technology transitions or on the amount, timing or nature of further investments in the relationship;
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we may experience difficulties and delays in product and technology development at, ramping production at, and transferring technology to, our business ventures;
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our control over the operations of our business 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, financial constraints or long-term business goals, our partners may decide not to join us in funding capital investment by our business ventures, which may result in higher levels of cash expenditures by us or prevent us from proceeding in the investment;
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we may lose the rights to technology or products being developed by the strategic relationship, including if any of our co-venturers is acquired by another company or otherwise transfers its interest in the business venture, files for bankruptcy or experiences financial or other losses;
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a bankruptcy event involving a co-venturer could result in the early termination or adverse modification of the business venture or agreements governing the business venture;
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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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obtaining requisite governmental permits and approvals, compliance with foreign laws and regulations, changes in foreign laws and regulations;
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the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals;
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currency exchange rate fluctuations or restrictions;
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political and economic instability, civil unrest and natural disasters;
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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, such as export bans, embargos, sanctions and license and certification requirements (including on encryption technology), new or increased tariffs and fees and complex customs regulations;
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•
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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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•
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increasing labor and overhead costs;
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weaker protection of IP rights;
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difficulties in managing international operations, including appropriate internal controls; 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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inconsistent demand from customers whose sales are correlated to large projects and expansions which can be sporadic;
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internal customer development of storage solutions;
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developments in the regulation and enforcement of digital rights management;
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emergence of new technologies;
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•
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volatility in demand due to differing patterns of technology adoption and innovation; or
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•
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concerns about data protection by end users.
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•
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limiting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes;
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•
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requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions, R&D and other general corporate purposes;
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•
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imposing financial and other restrictive covenants on our operations, including limiting our ability to (i) declare or pay dividends or repurchase shares of our common stock; (ii) purchase assets, make investments, complete acquisitions, consolidate or merge with or into, or sell all or substantially all of our assets to, another person; (iii) dispose of assets; (iv) incur liens; and (v) enter into transactions with affiliates;
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•
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placing us at a competitive disadvantage to competitors carrying less debt; and
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making us more vulnerable to economic downturns and limiting our ability to withstand competitive pressures or take advantage of new opportunities to grow our business.
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•
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weakness in demand for one or more product categories;
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•
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the timing of orders from and shipment of products to major customers, loss of major customers;
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•
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our product mix;
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•
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reductions in the ASPs of our products and lower margins;
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excess output, capacity or inventory, resulting in lower ASPs, financial charges or impairments, or insufficient output, capacity or inventory, resulting in lost revenue opportunities;
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•
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inability to successfully transition to 3D NAND or other technology developments, or other failure to reduce product costs to keep pace with reduction in ASPs;
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manufacturing delays or interruptions;
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delays in design wins or customer qualifications, acceptance by customers of competing products in lieu of our products;
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success of our partnerships and joint ventures, in particular the volume, timing and cost of wafer production at Flash Ventures, and our success in managing the relationships with our strategic partners;
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inability to realize the potential benefits of our acquisitions and the success of our integration efforts;
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•
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ability to penetrate new markets for our storage solutions;
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•
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variations in the cost of and lead times for components for our products, disruptions of our supply chain;
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•
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limited availability of components that we obtain from a single or a limited number of suppliers;
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•
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seasonal and other fluctuations in demand often due to technological advances;
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•
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increase in costs due to warranty claims;
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•
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higher costs as a result of currency exchange rate fluctuations; and
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•
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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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•
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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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accruals for product returns;
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•
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accruals for litigation and other contingencies
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•
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liabilities for unrecognized tax benefits; and
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•
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provisional estimates related to tax reform.
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•
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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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•
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perceptions about our strategic relationships and joint ventures, access to supply of flash-based memory, new technologies and technology transitions;
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•
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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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•
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new products introduced by us or our competitors;
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•
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strategic actions by us or competitors, such as acquisitions and restructurings;
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•
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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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•
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developments with respect to patents or proprietary rights, and any litigation;
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•
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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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•
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conditions and trends in the hard drive, solid-state storage, flash memory, computer, mobile, data and content management, storage and communication industries;
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•
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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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•
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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;
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•
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announcements relating to dividends and share repurchases; and
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•
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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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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Location
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Buildings 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 R&D
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Irvine
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Leased
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490,000
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R&D, administrative, marketing and sales
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Milpitas
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Owned
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589,000
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R&D, marketing and sales, and administrative
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San Jose
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Owned and Leased
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2,750,000
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Manufacturing of head wafers, head, media and product development, R&D, administrative, marketing and sales
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Colorado
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Longmont
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Leased
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62,000
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R&D
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Minnesota
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Rochester
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Leased
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121,000
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Product development
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Asia
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China
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Shanghai
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Owned
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715,000
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Assembly and test of SSDs
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Shenzhen
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Owned and Leased
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535,000
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Manufacturing of media
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Japan
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Fujisawa
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Owned
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661,000
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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
(1)
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Owned
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1,074,000
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Manufacturing of HDDs and R&D
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Kuching
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Owned
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285,000
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Manufacturing and development of substrates
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Penang
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Owned
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1,552,000
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Assembly and test of SSDs, manufacturing of media, and R&D
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Philippines
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Laguna
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Owned
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621,000
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Manufacturing of HGAs and slider fabrication
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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 R&D
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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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Manufacturing of HDDs
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India
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Bangalore
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Owned and Leased
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460,000
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R&D and marketing
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Middle East
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Israel
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Kfar Saba
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Owned
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167,000
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R&D and marketing
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Tefen
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Owned
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64,000
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R&D and marketing
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(1)
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In July 2018, we announced the closing of our manufacturing facility in Kuala Lumpur, Malaysia. We expect the closure to be substantially completed by the end of the calendar year 2019. For additional information, see Part II, Item 8, Note
15
,
Employee Termination, Asset Impairment and Other Charges
, of the Notes to Consolidated Financial Statements included in this
Annual
Report on Form
10‑K
.
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Quarter Ended
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High
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Low
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September 29, 2017
|
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$95.77
|
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$78.31
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December 29, 2017
|
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$93.31
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$76.59
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March 30, 2018
|
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$106.96
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$77.90
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June 29, 2018
|
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$93.41
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$75.96
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Quarter Ended
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High
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Low
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September 30, 2016
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$59.86
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$43.09
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December 30, 2016
|
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$72.01
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$52.10
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March 31, 2017
|
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$84.28
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|
$68.58
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June 30, 2017
|
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$95.00
|
|
$80.51
|
(in millions, except average price paid per share)
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
(1)
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Total Number of Shares Purchased As Part of Publicly Announced Program
(2)
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Maximum Value of Shares that May Yet be Purchased Under the Program
(2)
|
||||||
Mar. 31, 2018 - Apr. 27, 2018
|
—
|
|
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$
|
—
|
|
|
—
|
|
|
$
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1,969
|
|
Apr. 28, 2018 - May 25, 2018
|
1.9
|
|
|
84.61
|
|
|
1.9
|
|
|
$
|
1,812
|
|
|
May 26, 2018 - Jun. 29, 2018
|
3.4
|
|
|
81.16
|
|
|
3.4
|
|
|
$
|
1,533
|
|
|
Total for the quarter ended Jun. 29, 2018
|
5.3
|
|
|
$
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82.37
|
|
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5.3
|
|
|
|
|
|
(1)
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Includes commissions.
|
(2)
|
Our Board of Directors previously authorized
$5.00 billion
for the repurchase of our common stock. In
2018
, we repurchased
7.1 million
shares for a total cost of
$591 million
. Subsequent to
June 29, 2018
and through July 25, 2018, we repurchased an additional
0.8 million
shares for a total cost of
$61 million
. On July 25, 2018, our Board of Directors authorized a new
$5.00 billion
share repurchase program that is effective through July 25, 2023, replacing all prior programs. Repurchases under the 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. We expect stock repurchases to be funded principally by operating cash flows. Subsequent to July 25, 2018 and through August 22, 2018, we repurchased an additional
5.9 million
shares for a total cost of
$404 million
under this new program.
|
Record Date
|
|
Payment Date
|
|
Dividend Per Share
|
September 30, 2016
|
|
October 17, 2016
|
|
$0.50
|
December 30, 2016
|
|
January 17, 2017
|
|
$0.50
|
March 31, 2017
|
|
April 17, 2017
|
|
$0.50
|
June 30, 2017
|
|
July 17, 2017
|
|
$0.50
|
September 29, 2017
|
|
October 16, 2017
|
|
$0.50
|
December 29, 2017
|
|
January 16, 2018
|
|
$0.50
|
March 30, 2018
|
|
April 16, 2018
|
|
$0.50
|
June 29, 2018
|
|
July 16, 2018
|
|
$0.50
|
|
June 28,
2013 |
|
June 27,
2014 |
|
July 3,
2015 |
|
July 1,
2016 |
|
June 30,
2017 |
|
June 29,
2018 |
||||||||||||
Western Digital Corporation
|
$
|
100.00
|
|
|
$
|
151.92
|
|
|
$
|
134.87
|
|
|
$
|
80.35
|
|
|
$
|
157.42
|
|
|
$
|
140.87
|
|
S&P 500 Index
|
$
|
100.00
|
|
|
$
|
124.61
|
|
|
$
|
133.86
|
|
|
$
|
139.20
|
|
|
$
|
164.11
|
|
|
$
|
187.70
|
|
Dow Jones U.S. Technology Hardware & Equipment Index
|
$
|
100.00
|
|
|
$
|
142.33
|
|
|
$
|
161.24
|
|
|
$
|
148.84
|
|
|
$
|
210.22
|
|
|
$
|
273.85
|
|
Item 6.
|
Selected Financial Data
|
|
June 29,
2018 |
|
June 30,
2017 |
|
July 1,
2016 |
|
July 3,
2015 |
|
June 27,
2014 |
||||||||||
|
(in millions, except per share and employee data)
|
||||||||||||||||||
Revenue, net
|
$
|
20,647
|
|
|
$
|
19,093
|
|
|
$
|
12,994
|
|
|
$
|
14,572
|
|
|
$
|
15,130
|
|
Gross profit
|
7,705
|
|
|
6,072
|
|
|
3,435
|
|
|
4,221
|
|
|
4,360
|
|
|||||
Net income
|
675
|
|
|
397
|
|
|
242
|
|
|
1,465
|
|
|
1,617
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.27
|
|
|
$
|
1.38
|
|
|
$
|
1.01
|
|
|
$
|
6.31
|
|
|
$
|
6.88
|
|
Diluted
|
$
|
2.20
|
|
|
$
|
1.34
|
|
|
$
|
1.00
|
|
|
$
|
6.18
|
|
|
$
|
6.68
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
1.80
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
6,182
|
|
|
$
|
6,712
|
|
|
$
|
5,635
|
|
|
$
|
5,275
|
|
|
$
|
4,875
|
|
Total assets
|
$
|
29,235
|
|
|
$
|
29,860
|
|
|
$
|
32,862
|
|
|
$
|
15,170
|
|
|
$
|
15,499
|
|
Long-term debt
|
$
|
10,993
|
|
|
$
|
12,918
|
|
|
$
|
13,660
|
|
|
$
|
2,149
|
|
|
$
|
2,313
|
|
Shareholders’ equity
|
$
|
11,531
|
|
|
$
|
11,418
|
|
|
$
|
11,145
|
|
|
$
|
9,219
|
|
|
$
|
8,842
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of employees
(1)
|
71,600
|
|
|
67,600
|
|
|
72,900
|
|
|
76,400
|
|
|
84,100
|
|
|
|
(1)
|
Excludes temporary employees and contractors.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Conditions and Results of Operations
|
•
|
In November 2017, we settled our then-existing U.S. dollar-denominated term B-2 loans (“U.S. Term Loan B-2”) with the proceeds of a new issuance of a
$2.96 billion
U.S. dollar-denominated term loan (“U.S. Term Loan B-3”) at an interest rate lower than our U.S. Term Loan B-2 tranche. In February 2018, we made a voluntary partial prepayment of
$500 million
of the U.S. Term Loan B-3 using drawings from the Revolving Facility (as defined below), and in May 2018, we settled our then-existing U.S. dollar-denominated term B-3 loans with the proceeds of a new issuance of a
$2.46 billion
U.S. dollar-denominated term loan (“U.S. Term Loan B-4”) at an interest rate lower than our U.S. Term Loan B-3 tranche.
|
•
|
In November 2017, we made a voluntary prepayment of the full principal amounts of our Euro-denominated term B-2 loans (“
Euro Term Loan B-2
”) using cash on hand.
|
•
|
In February 2018, we issued
$2.3 billion
aggregate principal amount of
4.750%
senior unsecured notes due 2026 (the “
2026 Senior Unsecured Notes
”).
|
•
|
In February 2018, we issued a
$1.1 billion
aggregate principal amount of
1.50%
convertible senior notes due 2024 (the “
2024 Convertible Notes
”).
|
•
|
In February 2018, we entered into an amendment to the credit agreement entered into on April 29, 2016 to provide for, among other things, (i) the issuance of a new
$5.02 billion
of term loan A-1 due 2023 (the “Term Loan A-1”), (ii) a new
$2.25 billion
revolving credit facility maturing in 2023 (the “Revolving Facility”), which replaced our prior
$1.50 billion
revolving credit facility maturing in 2021, (iii) modifications to the restrictive and financial maintenance covenants, to provide more flexibility and increased incremental debt capacity, (iv) amendments of the applicable varying interest rate margins to be based on our corporate credit ratings, and (v) upon the occurrence of certain circumstances, a release of the security and guarantees as well as further covenant flexibility and increased incremental debt capacity. We used a portion of the proceeds of the Term Loan A-1 to repay in full our previous variable interest rate Term Loan A maturing 2021 in the principal amount of
$4.02 billion
.
|
•
|
In February and March 2018, we completed the redemption of all of our outstanding
7.375%
senior secured notes due 2023 in the aggregate principal amount of
$1.875 billion
(the “2023 Notes”) and the tender offer and redemption and settlement of all of our outstanding
10.500%
senior unsecured notes due 2024 in the aggregate principal amount of
$3.350 billion
(the “2024 Notes” and collectively with the 2023 Notes, the “Redeemed Notes”).
|
•
|
In connection with the settlements of the various debt instruments described above during
2018
, we incurred aggregate losses on extinguishment of debt of
$899 million
for the year ended
June 29, 2018
, consisting of
$720 million
of “make-whole” premiums and
$179 million
of unamortized issuance costs.
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||
Revenue, net
|
$
|
20,647
|
|
|
100.0
|
%
|
|
$
|
19,093
|
|
|
100.0
|
%
|
|
$
|
12,994
|
|
|
100.0
|
%
|
Cost of revenue
|
12,942
|
|
|
62.7
|
|
|
13,021
|
|
|
68.2
|
|
|
9,559
|
|
|
73.6
|
|
|||
Gross profit
|
7,705
|
|
|
37.3
|
|
|
6,072
|
|
|
31.8
|
|
|
3,435
|
|
|
26.4
|
|
|||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
2,400
|
|
|
11.6
|
|
|
2,441
|
|
|
12.8
|
|
|
1,627
|
|
|
12.5
|
|
|||
Selling, general and administrative
|
1,473
|
|
|
7.1
|
|
|
1,445
|
|
|
7.6
|
|
|
997
|
|
|
7.7
|
|
|||
Employee termination, asset impairment, and other charges
|
215
|
|
|
1.0
|
|
|
232
|
|
|
1.2
|
|
|
345
|
|
|
2.7
|
|
|||
Total operating expenses
|
4,088
|
|
|
19.8
|
|
|
4,118
|
|
|
21.6
|
|
|
2,969
|
|
|
22.8
|
|
|||
Operating income
|
3,617
|
|
|
17.5
|
|
|
1,954
|
|
|
10.2
|
|
|
466
|
|
|
3.6
|
|
|||
Interest and other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
60
|
|
|
0.3
|
|
|
26
|
|
|
0.1
|
|
|
26
|
|
|
0.2
|
|
|||
Interest expense
|
(676
|
)
|
|
(3.3
|
)
|
|
(847
|
)
|
|
(4.4
|
)
|
|
(266
|
)
|
|
(2.0
|
)
|
|||
Other expense, net
|
(916
|
)
|
|
(4.4
|
)
|
|
(364
|
)
|
|
(1.9
|
)
|
|
(73
|
)
|
|
(0.6
|
)
|
|||
Total interest and other expense, net
|
(1,532
|
)
|
|
(7.4
|
)
|
|
(1,185
|
)
|
|
(6.2
|
)
|
|
(313
|
)
|
|
(2.4
|
)
|
|||
Income before taxes
|
2,085
|
|
|
10.1
|
|
|
769
|
|
|
4.0
|
|
|
153
|
|
|
1.2
|
|
|||
Income tax expense (benefit)
|
1,410
|
|
|
6.8
|
|
|
372
|
|
|
1.9
|
|
|
(89
|
)
|
|
(0.7
|
)
|
|||
Net income
|
$
|
675
|
|
|
3.3
|
|
|
$
|
397
|
|
|
2.1
|
|
|
$
|
242
|
|
|
1.9
|
|
|
|
(1)
|
Percentages may not total due to rounding.
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except exabytes and percentages)
|
||||||||||
Revenue, net
|
$
|
20,647
|
|
|
$
|
19,093
|
|
|
$
|
12,994
|
|
|
|
|
|
|
|
||||||
Revenues by Geography (%)
|
|
|
|
|
|
||||||
Americas
|
27
|
%
|
|
27
|
%
|
|
32
|
%
|
|||
Europe, Middle East and Africa
|
19
|
|
|
17
|
|
|
21
|
|
|||
Asia
|
54
|
|
|
56
|
|
|
47
|
|
|||
|
|
|
|
|
|
||||||
Revenues by End Market (%)
|
|
|
|
|
|
||||||
Client Devices
|
49
|
%
|
|
50
|
%
|
|
48
|
%
|
|||
Data Center Devices & Solutions
|
29
|
|
|
29
|
|
|
38
|
|
|||
Client Solutions
|
22
|
|
|
21
|
|
|
14
|
|
|||
|
|
|
|
|
|
||||||
Exabytes Shipped
|
389
|
|
|
313
|
|
|
262
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except percentages)
|
||||||||||
Income before taxes
|
$
|
2,085
|
|
|
$
|
769
|
|
|
$
|
153
|
|
Income tax expense (benefit)
|
1,410
|
|
|
372
|
|
|
(89
|
)
|
|||
Effective tax rate
|
68
|
%
|
|
48
|
%
|
|
(58
|
)%
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
4,205
|
|
|
$
|
3,437
|
|
|
$
|
1,983
|
|
Investing activities
|
(1,655
|
)
|
|
(636
|
)
|
|
(9,608
|
)
|
|||
Financing activities
|
(3,900
|
)
|
|
(4,595
|
)
|
|
10,751
|
|
|||
Effect of exchange rate changes on cash
|
1
|
|
|
(3
|
)
|
|
1
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(1,349
|
)
|
|
$
|
(1,797
|
)
|
|
$
|
3,127
|
|
|
Total
|
|
1 Year (2019)
|
|
2-3 Years (2020-2021)
|
|
4-5 Years (2022-2023)
|
|
More than 5 Years (Beyond 2023)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Long-term debt, including current portion
(1)
|
$
|
11,375
|
|
|
$
|
179
|
|
|
$
|
589
|
|
|
$
|
7,207
|
|
|
$
|
3,400
|
|
Interest on debt
|
2,323
|
|
|
425
|
|
|
835
|
|
|
719
|
|
|
344
|
|
|||||
Flash Ventures and other related commitments
(2)
|
8,298
|
|
|
3,637
|
|
|
2,749
|
|
|
1,603
|
|
|
309
|
|
|||||
Operating leases
|
190
|
|
|
53
|
|
|
80
|
|
|
37
|
|
|
20
|
|
|||||
Purchase obligations
|
3,179
|
|
|
2,540
|
|
|
319
|
|
|
320
|
|
|
—
|
|
|||||
Mandatory Repatriation Tax
|
1,566
|
|
|
131
|
|
|
255
|
|
|
248
|
|
|
932
|
|
|||||
Total
|
$
|
26,931
|
|
|
$
|
6,965
|
|
|
$
|
4,827
|
|
|
$
|
10,134
|
|
|
$
|
5,005
|
|
|
|
(1)
|
Principal portion of debt, excluding discounts and issuance costs.
|
(2)
|
Includes reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and reimbursement for other committed expenses, including R&D. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.
|
June 28, 2019
|
|
$
|
131
|
|
July 3, 2020
|
|
131
|
|
|
July 2, 2021
|
|
124
|
|
|
July 1, 2022
|
|
124
|
|
|
June 30, 2023
|
|
124
|
|
|
June 28, 2024
|
|
233
|
|
|
June 27, 2025
|
|
311
|
|
|
July 3, 2026
|
|
388
|
|
|
Total
|
|
$
|
1,566
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Designated Hedges (cash flow hedges)
|
Contract Amount
|
|
Weighted-Average Contract Rate
(1)
|
|
Mark to Market Unrealized Gain (Loss)
|
|||||
|
(in millions, except weighted-average contract rate)
|
|||||||||
Japanese yen
|
$
|
634
|
|
|
109.39
|
|
|
$
|
(3
|
)
|
Malaysian ringgit
|
101
|
|
|
3.97
|
|
|
(2
|
)
|
||
Philippine peso
|
48
|
|
|
52.69
|
|
|
(1
|
)
|
||
Thai baht
|
162
|
|
|
31.48
|
|
|
(8
|
)
|
||
Total designated forward contracts
|
$
|
945
|
|
|
|
|
$
|
(14
|
)
|
Non-Designated Hedges
|
Contract Amount
|
|
Weighted-Average Contract Rate
(1)
|
|
Unrealized Gain (Loss)
|
|||||
|
(in millions, except weighted-average contract rate)
|
|||||||||
British pound sterling
|
$
|
28
|
|
|
0.76
|
|
|
$
|
—
|
|
Euro
|
76
|
|
|
0.86
|
|
|
—
|
|
||
Japanese yen
|
2,921
|
|
|
108.20
|
|
|
42
|
|
||
Malaysian ringgit
|
104
|
|
|
4.00
|
|
|
(1
|
)
|
||
Philippine peso
|
80
|
|
|
53.11
|
|
|
—
|
|
||
Thai baht
|
211
|
|
|
32.42
|
|
|
(4
|
)
|
||
Total non-designated forward contracts
|
$
|
3,420
|
|
|
|
|
$
|
37
|
|
|
|
(1)
|
Expressed in units of foreign currency per U.S. dollar.
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
PAGE NO.
|
Consolidated Financial Statements:
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets — As of June 29, 2018 and June 30, 2017
|
|
Consolidated Statements of Operations — Three Years Ended June 29, 2018
|
|
Consolidated Statements of Comprehensive Income — Three Years Ended June 29, 2018
|
|
Consolidated Statements of Cash Flows — Three Years Ended June 29, 2018
|
|
Consolidated Statements of Shareholders' Equity — Three Years Ended June 29, 2018
|
|
Notes to Consolidated Financial Statements
|
|
/s/ KPMG LLP
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,005
|
|
|
$
|
6,354
|
|
Accounts receivable, net
|
2,197
|
|
|
1,948
|
|
||
Inventories
|
2,944
|
|
|
2,341
|
|
||
Other current assets
|
492
|
|
|
413
|
|
||
Total current assets
|
10,638
|
|
|
11,056
|
|
||
Property, plant and equipment, net
|
3,095
|
|
|
3,033
|
|
||
Notes receivable and investments in Flash Ventures
|
2,105
|
|
|
1,340
|
|
||
Goodwill
|
10,075
|
|
|
10,014
|
|
||
Other intangible assets, net
|
2,680
|
|
|
3,823
|
|
||
Other non-current assets
|
642
|
|
|
594
|
|
||
Total assets
|
$
|
29,235
|
|
|
$
|
29,860
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,265
|
|
|
$
|
2,144
|
|
Accounts payable to related parties
|
259
|
|
|
206
|
|
||
Accrued expenses
|
1,274
|
|
|
1,255
|
|
||
Accrued compensation
|
479
|
|
|
506
|
|
||
Current portion of long-term debt
|
179
|
|
|
233
|
|
||
Total current liabilities
|
4,456
|
|
|
4,344
|
|
||
Long-term debt
|
10,993
|
|
|
12,918
|
|
||
Other liabilities
|
2,255
|
|
|
1,180
|
|
||
Total liabilities
|
17,704
|
|
|
18,442
|
|
||
Commitments and contingencies (Notes 6, 9, 13 and 16)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — none
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; authorized — 450 shares; issued — 312 shares in 2018 and 2017; outstanding — 296 shares in 2018 and 294 shares in 2017
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
4,254
|
|
|
4,506
|
|
||
Accumulated other comprehensive loss
|
(39
|
)
|
|
(58
|
)
|
||
Retained earnings
|
8,757
|
|
|
8,633
|
|
||
Treasury stock — common shares at cost; 16 shares in 2018 and 18 shares in 2017
|
(1,444
|
)
|
|
(1,666
|
)
|
||
Total shareholders’ equity
|
11,531
|
|
|
11,418
|
|
||
Total liabilities and shareholders’ equity
|
$
|
29,235
|
|
|
$
|
29,860
|
|
|
Year Ended
|
||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
July 1,
2016 |
||||||
Revenue, net
|
$
|
20,647
|
|
|
$
|
19,093
|
|
|
$
|
12,994
|
|
Cost of revenue
|
12,942
|
|
|
13,021
|
|
|
9,559
|
|
|||
Gross profit
|
7,705
|
|
|
6,072
|
|
|
3,435
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
2,400
|
|
|
2,441
|
|
|
1,627
|
|
|||
Selling, general and administrative
|
1,473
|
|
|
1,445
|
|
|
997
|
|
|||
Employee termination, asset impairment, and other charges
|
215
|
|
|
232
|
|
|
345
|
|
|||
Total operating expenses
|
4,088
|
|
|
4,118
|
|
|
2,969
|
|
|||
Operating income
|
3,617
|
|
|
1,954
|
|
|
466
|
|
|||
Interest and other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
60
|
|
|
26
|
|
|
26
|
|
|||
Interest expense
|
(676
|
)
|
|
(847
|
)
|
|
(266
|
)
|
|||
Other expense, net
|
(916
|
)
|
|
(364
|
)
|
|
(73
|
)
|
|||
Total interest and other expense, net
|
(1,532
|
)
|
|
(1,185
|
)
|
|
(313
|
)
|
|||
Income before taxes
|
2,085
|
|
|
769
|
|
|
153
|
|
|||
Income tax expense (benefit)
|
1,410
|
|
|
372
|
|
|
(89
|
)
|
|||
Net income
|
$
|
675
|
|
|
$
|
397
|
|
|
$
|
242
|
|
|
|
|
|
|
|
||||||
Income per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
2.27
|
|
|
$
|
1.38
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
2.20
|
|
|
$
|
1.34
|
|
|
$
|
1.00
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
297
|
|
|
288
|
|
|
239
|
|
|||
Diluted
|
307
|
|
|
296
|
|
|
242
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends declared per share
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
Year Ended
|
||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
July 1,
2016 |
||||||
Net income
|
$
|
675
|
|
|
$
|
397
|
|
|
$
|
242
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Actuarial pension gain (loss)
|
(2
|
)
|
|
39
|
|
|
(73
|
)
|
|||
Foreign currency translation adjustment
|
18
|
|
|
(115
|
)
|
|
74
|
|
|||
Net unrealized gain (loss) on derivative contracts and available-for-sale securities
|
7
|
|
|
(75
|
)
|
|
99
|
|
|||
Total other comprehensive income (loss), before tax
|
23
|
|
|
(151
|
)
|
|
100
|
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss), before tax
|
(4
|
)
|
|
(10
|
)
|
|
23
|
|
|||
Other comprehensive income (loss), net of tax
|
19
|
|
|
(161
|
)
|
|
123
|
|
|||
Total comprehensive income
|
$
|
694
|
|
|
$
|
236
|
|
|
$
|
365
|
|
|
Year Ended
|
||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
July 1,
2016 |
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
675
|
|
|
$
|
397
|
|
|
$
|
242
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
2,056
|
|
|
2,128
|
|
|
1,154
|
|
|||
Stock-based compensation
|
377
|
|
|
394
|
|
|
191
|
|
|||
Deferred income taxes
|
(348
|
)
|
|
12
|
|
|
(149
|
)
|
|||
Loss on disposal of assets
|
21
|
|
|
18
|
|
|
22
|
|
|||
Write-off of issuance costs and amortization of debt discounts
|
221
|
|
|
285
|
|
|
39
|
|
|||
Cash premium on extinguishment of debt
|
720
|
|
|
—
|
|
|
—
|
|
|||
Loss on convertible debt and related instruments
|
—
|
|
|
5
|
|
|
58
|
|
|||
Non-cash portion of employee termination, asset impairment and other charges
|
16
|
|
|
13
|
|
|
41
|
|
|||
Other non-cash operating activities, net
|
(19
|
)
|
|
94
|
|
|
11
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(244
|
)
|
|
(487
|
)
|
|
466
|
|
|||
Inventories
|
(598
|
)
|
|
(204
|
)
|
|
306
|
|
|||
Accounts payable
|
(15
|
)
|
|
223
|
|
|
(299
|
)
|
|||
Accounts payable to related parties
|
53
|
|
|
38
|
|
|
(115
|
)
|
|||
Accrued expenses
|
(17
|
)
|
|
231
|
|
|
102
|
|
|||
Accrued compensation
|
(26
|
)
|
|
115
|
|
|
(94
|
)
|
|||
Other assets and liabilities, net
|
1,333
|
|
|
175
|
|
|
8
|
|
|||
Net cash provided by operating activities
|
4,205
|
|
|
3,437
|
|
|
1,983
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(835
|
)
|
|
(578
|
)
|
|
(584
|
)
|
|||
Proceeds from the sale of property, plant and equipment
|
26
|
|
|
21
|
|
|
—
|
|
|||
Acquisitions, net of cash acquired
|
(100
|
)
|
|
—
|
|
|
(9,835
|
)
|
|||
Purchases of investments
|
(89
|
)
|
|
(281
|
)
|
|
(632
|
)
|
|||
Proceeds from sale of investments
|
48
|
|
|
94
|
|
|
1,204
|
|
|||
Proceeds from maturities of investments
|
19
|
|
|
417
|
|
|
405
|
|
|||
Investments in Flash Ventures
|
—
|
|
|
(20
|
)
|
|
—
|
|
|||
Notes receivable issuances to Flash Ventures
|
(1,313
|
)
|
|
(549
|
)
|
|
(106
|
)
|
|||
Notes receivable proceeds from Flash Ventures
|
571
|
|
|
292
|
|
|
16
|
|
|||
Strategic investments and other, net
|
18
|
|
|
(32
|
)
|
|
(76
|
)
|
|||
Net cash used in investing activities
|
(1,655
|
)
|
|
(636
|
)
|
|
(9,608
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Issuance of stock under employee stock plans
|
220
|
|
|
235
|
|
|
117
|
|
|||
Taxes paid on vested stock awards under employee stock plans
|
(171
|
)
|
|
(124
|
)
|
|
(50
|
)
|
|||
Excess tax benefits from employee stock plans
|
—
|
|
|
119
|
|
|
7
|
|
|||
Proceeds from acquired call option
|
—
|
|
|
61
|
|
|
409
|
|
|||
Settlement of convertible debt
|
—
|
|
|
(492
|
)
|
|
(2,611
|
)
|
|||
Repurchases of common stock
|
(591
|
)
|
|
—
|
|
|
(60
|
)
|
|||
Dividends paid to shareholders
|
(593
|
)
|
|
(574
|
)
|
|
(464
|
)
|
|||
Settlement of debt hedge contracts
|
28
|
|
|
(21
|
)
|
|
—
|
|
|||
Proceeds from (repayment of) revolving credit facility
|
500
|
|
|
—
|
|
|
(255
|
)
|
|||
Repayment of debt and premiums
|
(17,074
|
)
|
|
(11,697
|
)
|
|
(2,313
|
)
|
|||
Proceeds from debt
|
13,840
|
|
|
7,908
|
|
|
17,108
|
|
|||
Debt issuance costs
|
(59
|
)
|
|
(10
|
)
|
|
(524
|
)
|
|||
Payment upon settlement of acquired warrants
|
—
|
|
|
—
|
|
|
(613
|
)
|
|||
Net cash provided by (used in) financing activities
|
(3,900
|
)
|
|
(4,595
|
)
|
|
10,751
|
|
|||
Effect of exchange rate changes on cash
|
1
|
|
|
(3
|
)
|
|
1
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(1,349
|
)
|
|
(1,797
|
)
|
|
3,127
|
|
|||
Cash and cash equivalents, beginning of year
|
6,354
|
|
|
8,151
|
|
|
5,024
|
|
|||
Cash and cash equivalents, end of year
|
$
|
5,005
|
|
|
$
|
6,354
|
|
|
$
|
8,151
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
220
|
|
|
$
|
184
|
|
|
$
|
26
|
|
Cash paid for interest
|
$
|
708
|
|
|
$
|
777
|
|
|
$
|
113
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Common stock issued and equity awards assumed in connection with acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,822
|
|
Shares issued in conjunction with settlement of convertible notes
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
94
|
|
Shares received in conjunction with assumed call options
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
(70
|
)
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Total Shareholders’ Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at July 3, 2015
|
261
|
|
|
$
|
3
|
|
|
(31
|
)
|
|
$
|
(2,299
|
)
|
|
$
|
2,428
|
|
|
$
|
(20
|
)
|
|
$
|
9,107
|
|
|
$
|
9,219
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
242
|
|
|
242
|
|
||||||
Employee stock plans
|
—
|
|
|
—
|
|
|
5
|
|
|
191
|
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
67
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
—
|
|
|
—
|
|
|
191
|
|
||||||
Common stock issued in connection with acquisition
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,764
|
|
|
—
|
|
|
—
|
|
|
1,764
|
|
||||||
Stock awards assumed in acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||
Increase in excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Shares issued in conjunction with settlement of convertible notes
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
94
|
|
||||||
Shares received in conjunction with assumed call options
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
||||||
Dividends to shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
(501
|
)
|
|
(490
|
)
|
||||||
Actuarial pension loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||
Net unrealized gain on derivative contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|
—
|
|
|
99
|
|
||||||
Balance at July 1, 2016
|
312
|
|
|
3
|
|
|
(28
|
)
|
|
(2,238
|
)
|
|
4,429
|
|
|
103
|
|
|
8,848
|
|
|
11,145
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
397
|
|
||||||
Employee stock plans
|
—
|
|
|
—
|
|
|
10
|
|
|
583
|
|
|
(472
|
)
|
|
—
|
|
|
—
|
|
|
111
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
|
—
|
|
|
394
|
|
||||||
Increase in excess tax benefits from employee stock plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
104
|
|
||||||
Shares issued in conjunction with settlement of convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Shares received in conjunction with assumed call options
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||
Dividends to shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
(612
|
)
|
|
(577
|
)
|
||||||
Actuarial pension gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
(113
|
)
|
||||||
Net unrealized loss on derivative contracts and available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
|
(75
|
)
|
||||||
Balance at June 30, 2017
|
312
|
|
|
3
|
|
|
(18
|
)
|
|
(1,666
|
)
|
|
4,506
|
|
|
(58
|
)
|
|
8,633
|
|
|
11,418
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
675
|
|
|
675
|
|
||||||
Adoption of New Accounting Standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
70
|
|
|
51
|
|
||||||
Employee stock plans
|
—
|
|
|
—
|
|
|
9
|
|
|
813
|
|
|
(764
|
)
|
|
—
|
|
|
—
|
|
|
49
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
377
|
|
|
—
|
|
|
—
|
|
|
377
|
|
||||||
Equity value of convertible debt issuance, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
125
|
|
||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(591
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(591
|
)
|
||||||
Dividends to shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
(621
|
)
|
|
(592
|
)
|
||||||
Actuarial pension loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||||
Net unrealized gain on derivative contracts and available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Balance at June 29, 2018
|
312
|
|
|
$
|
3
|
|
|
(16
|
)
|
|
$
|
(1,444
|
)
|
|
$
|
4,254
|
|
|
$
|
(39
|
)
|
|
$
|
8,757
|
|
|
$
|
11,531
|
|
Note
1
.
|
Organization and Basis of Presentation
|
Note
2
.
|
Recent Accounting Pronouncements
|
•
|
Substantially all of the Company’s current revenue is from the sale of hardware products. The Company does not believe that there are any material changes to the timing or amount of revenue for these types of sales under the new standard as the majority of the Company’s revenue is recognized at a point in time.
|
•
|
For sales-based royalties, the Company will estimate and recognize revenue in the period the royalty-bearing sales occur as opposed to the existing treatment of recognizing revenue in the period the royalty report is received. This change will result in the acceleration of revenue recognition by one fiscal quarter as well as fluctuations between the estimated and actual reported sales-based royalties, which the Company does not expect to be material.
|
•
|
For other revenue streams such as multi-element transactions, software and IP licenses, these transactions are immaterial and the related changes to revenue recognition will not be material.
|
•
|
For assets recognized from costs incurred to obtain or fulfill a contract, the Company does not expect to have material capitalized fees for contracts where the amortization period is greater than one year. The Company will continue to expense these costs as incurred.
|
•
|
The Company’s revenue disclosures will expand and may require judgment in certain areas.
|
Note
3
.
|
Supplemental Financial Statement Data
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Inventories:
|
|
|
|
||||
Raw materials and component parts
|
$
|
1,048
|
|
|
$
|
646
|
|
Work-in-process
|
878
|
|
|
632
|
|
||
Finished goods
|
1,018
|
|
|
1,063
|
|
||
Total inventories
|
$
|
2,944
|
|
|
$
|
2,341
|
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Property, plant, and equipment:
|
|
|
|
||||
Land and buildings
|
$
|
1,998
|
|
|
$
|
1,855
|
|
Machinery and equipment
|
7,209
|
|
|
6,815
|
|
||
Computer equipment and software
|
440
|
|
|
404
|
|
||
Furniture and fixtures
|
48
|
|
|
49
|
|
||
Leasehold improvements
|
257
|
|
|
259
|
|
||
Construction-in-process
|
234
|
|
|
144
|
|
||
Property, plant and equipment, gross
|
10,186
|
|
|
9,526
|
|
||
Accumulated depreciation
|
(7,091
|
)
|
|
(6,493
|
)
|
||
Property, plant, and equipment, net
|
$
|
3,095
|
|
|
$
|
3,033
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Warranty accrual, beginning of period
|
$
|
311
|
|
|
$
|
279
|
|
|
$
|
221
|
|
Warranty liabilities assumed as a result of acquisitions
|
—
|
|
|
—
|
|
|
45
|
|
|||
Charges to operations
|
176
|
|
|
177
|
|
|
162
|
|
|||
Utilization
|
(151
|
)
|
|
(151
|
)
|
|
(178
|
)
|
|||
Changes in estimate related to pre-existing warranties
|
(18
|
)
|
|
6
|
|
|
29
|
|
|||
Warranty accrual, end of period
|
$
|
318
|
|
|
$
|
311
|
|
|
$
|
279
|
|
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Other non-current liabilities:
|
|
|
|
||||
Non-current net tax payable
|
$
|
1,315
|
|
|
$
|
—
|
|
Other non-current liabilities
|
940
|
|
|
1,180
|
|
||
Total other non-current liabilities
|
$
|
2,255
|
|
|
$
|
1,180
|
|
|
Actuarial Pension Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Unrealized Gains (Losses) on Derivative Contracts and Available for Sale Securities
|
|
Total Accumulated Comprehensive Income (Loss)
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at July 1, 2016
|
$
|
(45
|
)
|
|
$
|
74
|
|
|
$
|
74
|
|
|
$
|
103
|
|
Other comprehensive income (loss) before reclassifications
|
39
|
|
|
(115
|
)
|
|
(45
|
)
|
|
(121
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
||||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
(12
|
)
|
|
2
|
|
|
—
|
|
|
(10
|
)
|
||||
Net current-period other comprehensive income (loss)
|
27
|
|
|
(113
|
)
|
|
(75
|
)
|
|
(161
|
)
|
||||
Balance at June 30, 2017
|
$
|
(18
|
)
|
|
$
|
(39
|
)
|
|
$
|
(1
|
)
|
|
$
|
(58
|
)
|
Other comprehensive income (loss) before reclassifications
|
(2
|
)
|
|
18
|
|
|
25
|
|
|
41
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
1
|
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(1
|
)
|
|
18
|
|
|
2
|
|
|
19
|
|
||||
Balance at June 29, 2018
|
$
|
(19
|
)
|
|
$
|
(21
|
)
|
|
$
|
1
|
|
|
$
|
(39
|
)
|
AOCI Component
|
|
2018
|
|
2017
|
|
2016
|
|
Statement of Operations Line Item
|
||||||
|
(in millions)
|
|
|
|||||||||||
Unrealized holding gain (loss) on designated hedging activities:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
$
|
16
|
|
|
$
|
33
|
|
|
$
|
(17
|
)
|
|
Cost of revenue
|
Foreign exchange contracts
|
|
2
|
|
|
(3
|
)
|
|
(34
|
)
|
|
Research and development
|
|||
Total reclassifications for the period
|
|
$
|
18
|
|
|
$
|
30
|
|
|
$
|
(51
|
)
|
|
|
Note
4
.
|
Fair Value Measurements and Investments
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
5,005
|
|
|
$
|
6,354
|
|
Short-term available-for-sale securities (included within Other current assets)
|
23
|
|
|
24
|
|
||
Long-term available-for-sale securities (included within Other non-current assets)
|
93
|
|
|
94
|
|
||
Total cash, cash equivalents and available-for-sale securities
|
$
|
5,121
|
|
|
$
|
6,472
|
|
Level 1.
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2.
|
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3.
|
Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.
|
|
June 29, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
2,554
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,554
|
|
Certificates of deposit
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Total cash equivalents
|
2,554
|
|
|
4
|
|
|
—
|
|
|
2,558
|
|
||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Corporate notes and bonds
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Asset-backed securities
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Municipal notes and bonds
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total short-term available-for-sale securities
|
5
|
|
|
18
|
|
|
—
|
|
|
23
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
U.S. Government agency securities
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
International government securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate notes and bonds
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
||||
Asset-backed securities
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Municipal notes and bonds
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Total long-term available-for-sale securities
|
3
|
|
|
90
|
|
|
—
|
|
|
93
|
|
||||
Foreign exchange contracts
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||
Interest rate swap contract
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
Total assets at fair value
|
$
|
2,562
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
2,741
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
June 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
2,836
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,836
|
|
Certificates of deposit
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Total cash equivalents
|
2,836
|
|
|
10
|
|
|
—
|
|
|
2,846
|
|
||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Corporate notes and bonds
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Asset-backed securities
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Municipal notes and bonds
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Total short-term available-for-sale securities
|
4
|
|
|
20
|
|
|
—
|
|
|
24
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
U.S. Government agency securities
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
International government securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate notes and bonds
|
—
|
|
|
67
|
|
|
—
|
|
|
67
|
|
||||
Asset-backed securities
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Municipal notes and bonds
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Total long-term available-for-sale securities
|
5
|
|
|
89
|
|
|
—
|
|
|
94
|
|
||||
Foreign exchange contracts
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
Total assets at fair value
|
$
|
2,845
|
|
|
$
|
135
|
|
|
$
|
—
|
|
|
$
|
2,980
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Interest rate swap contract
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Exchange options
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value |
|
Fair
Value |
||||||||
|
(in millions)
|
||||||||||||||
0.50% convertible senior notes due 2020
|
$
|
31
|
|
|
$
|
34
|
|
|
$
|
30
|
|
|
$
|
34
|
|
Variable interest rate Term Loan A maturing 2021
|
—
|
|
|
—
|
|
|
4,074
|
|
|
4,130
|
|
||||
Variable interest rate Term Loan A-1 maturing 2023
|
4,982
|
|
|
5,013
|
|
|
—
|
|
|
—
|
|
||||
Variable interest rate U.S. Term Loan B-2 maturing 2023
|
—
|
|
|
—
|
|
|
2,968
|
|
|
2,989
|
|
||||
Variable interest rate U.S. Term Loan B-4 maturing 2023
|
2,448
|
|
|
2,452
|
|
|
—
|
|
|
—
|
|
||||
Variable interest rate Euro Term Loan B-2 maturing 2023
(1)
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,010
|
|
||||
7.375% senior secured notes due 2023
|
—
|
|
|
—
|
|
|
1,835
|
|
|
2,062
|
|
||||
1.50% convertible notes due 2024
|
931
|
|
|
1,114
|
|
|
—
|
|
|
—
|
|
||||
10.50% senior unsecured notes due 2024
|
—
|
|
|
—
|
|
|
3,244
|
|
|
3,956
|
|
||||
4.750% senior unsecured notes due 2026
|
2,280
|
|
|
2,238
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
10,672
|
|
|
$
|
10,851
|
|
|
$
|
13,151
|
|
|
$
|
14,181
|
|
|
|
(1)
|
Euro Term Loan B-2 outstanding principal amount as of
June 30, 2017
was based upon the Euro to U.S. dollar exchange rate as of that date.
|
Note
5
.
|
Derivative Instruments and Hedging Activities
|
Note
6
.
|
Debt
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
0.50% convertible senior notes due 2020
|
$
|
35
|
|
|
$
|
35
|
|
Revolving credit facility maturing 2023
|
500
|
|
|
—
|
|
||
Variable interest rate Term Loan A maturing 2021
|
—
|
|
|
4,125
|
|
||
Variable interest rate Term Loan A-1 maturing 2023
|
4,991
|
|
|
—
|
|
||
Variable interest rate U.S. Term Loan B-2 maturing 2023
|
—
|
|
|
2,970
|
|
||
Variable interest rate U.S. Term Loan B-4 maturing 2023
|
2,449
|
|
|
—
|
|
||
Variable interest rate Euro Term Loan B-2 maturing 2023
(1)
|
—
|
|
|
1,001
|
|
||
7.375% senior secured notes due 2023
|
—
|
|
|
1,875
|
|
||
1.50% convertible notes due 2024
|
1,100
|
|
|
—
|
|
||
10.50% senior unsecured notes due 2024
|
—
|
|
|
3,350
|
|
||
4.750% senior unsecured notes due 2026
|
2,300
|
|
|
—
|
|
||
Total debt
|
11,375
|
|
|
13,356
|
|
||
Issuance costs and debt discounts
|
(203
|
)
|
|
(205
|
)
|
||
Subtotal
|
11,172
|
|
|
13,151
|
|
||
Less current portion of long-term debt
|
(179
|
)
|
|
(233
|
)
|
||
Long-term debt
|
$
|
10,993
|
|
|
$
|
12,918
|
|
|
|
(1)
|
Euro Term Loan B-2 outstanding principal amount as of
June 30, 2017
was based upon the Euro to U.S. dollar exchange rate as of that date.
|
|
|
Future Debt Payments
|
||
|
|
(in millions)
|
||
Fiscal year
|
|
|
||
2019
|
|
$
|
179
|
|
2020
|
|
278
|
|
|
2021
|
|
311
|
|
|
2022
|
|
276
|
|
|
2023
|
|
6,931
|
|
|
2024 and thereafter
|
|
3,400
|
|
|
Total debt maturities
|
|
11,375
|
|
|
Issuance costs and debt discounts
|
|
(203
|
)
|
|
Net carrying value
|
|
$
|
11,172
|
|
Note
7
.
|
Goodwill and Other Intangible Assets
|
|
Carrying Amount
|
||
|
(in millions)
|
||
Balance at July 1, 2016
|
$
|
9,951
|
|
Purchase price adjustments to goodwill
|
66
|
|
|
Foreign currency translation adjustment
|
(3
|
)
|
|
Balance at June 30, 2017
|
10,014
|
|
|
Goodwill recorded in connection with acquisitions
|
61
|
|
|
Balance at June 29, 2018
|
$
|
10,075
|
|
|
June 29, 2018
|
||||||||||||
|
Weighted Average Amortization Period
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
(in years)
|
|
(in millions)
|
||||||||||
Finite:
|
|
|
|
|
|
|
|
||||||
Existing technology
|
3
|
|
$
|
4,323
|
|
|
$
|
(2,528
|
)
|
|
$
|
1,795
|
|
Trade names and trademarks
|
7
|
|
648
|
|
|
(222
|
)
|
|
426
|
|
|||
Customer relationships
|
6
|
|
635
|
|
|
(299
|
)
|
|
336
|
|
|||
Other
|
2
|
|
180
|
|
|
(161
|
)
|
|
19
|
|
|||
Leasehold interests
|
31
|
|
32
|
|
|
(8
|
)
|
|
24
|
|
|||
Total finite intangible assets
|
|
|
5,818
|
|
|
(3,218
|
)
|
|
2,600
|
|
|||
In-process research and development
|
|
|
80
|
|
|
—
|
|
|
80
|
|
|||
Total intangible assets
|
|
|
$
|
5,898
|
|
|
$
|
(3,218
|
)
|
|
$
|
2,680
|
|
|
June 30, 2017
|
||||||||||||
|
Weighted Average Amortization Period
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
(in years)
|
|
(in millions)
|
||||||||||
Finite:
|
|
|
|
|
|
|
|
||||||
Existing technology
|
3
|
|
$
|
3,478
|
|
|
$
|
(1,373
|
)
|
|
$
|
2,105
|
|
Trade names and trademarks
|
7
|
|
645
|
|
|
(134
|
)
|
|
511
|
|
|||
Customer relationships
|
6
|
|
627
|
|
|
(227
|
)
|
|
400
|
|
|||
Other
|
2
|
|
375
|
|
|
(288
|
)
|
|
87
|
|
|||
Leasehold interests
|
31
|
|
35
|
|
|
(11
|
)
|
|
24
|
|
|||
Total finite intangible assets
|
|
|
5,160
|
|
|
(2,033
|
)
|
|
3,127
|
|
|||
In-process research and development
|
|
|
696
|
|
|
—
|
|
|
696
|
|
|||
Total intangible assets
|
|
|
$
|
5,856
|
|
|
$
|
(2,033
|
)
|
|
$
|
3,823
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Intangible asset amortization
|
$
|
1,185
|
|
|
$
|
1,169
|
|
|
$
|
266
|
|
|
Future Intangible Asset Amortization Expense
|
||
|
(in millions)
|
||
Fiscal year
|
|
||
2019
|
$
|
968
|
|
2020
|
755
|
|
|
2021
|
503
|
|
|
2022
|
230
|
|
|
2023 and thereafter
|
144
|
|
|
Total future amortization expense
|
$
|
2,600
|
|
Note
8
.
|
Pension and Other Post-Retirement Benefit Plans
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Change in benefit obligation:
|
|
|
|
|
|
||||||
Benefit obligation at beginning of period
|
$
|
249
|
|
|
$
|
326
|
|
|
$
|
231
|
|
Service cost
|
6
|
|
|
8
|
|
|
8
|
|
|||
Interest cost
|
2
|
|
|
1
|
|
|
3
|
|
|||
Actuarial loss (gain)
|
9
|
|
|
(22
|
)
|
|
52
|
|
|||
Benefits paid
|
(9
|
)
|
|
(30
|
)
|
|
(16
|
)
|
|||
Settlement/Curtailment
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
|||
Non-U.S. currency movement
|
3
|
|
|
(28
|
)
|
|
49
|
|
|||
Benefit obligation at end of period
|
$
|
260
|
|
|
$
|
249
|
|
|
$
|
326
|
|
Change in plan assets:
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
$
|
189
|
|
|
$
|
212
|
|
|
$
|
185
|
|
Actual return on plan assets
|
8
|
|
|
15
|
|
|
(14
|
)
|
|||
Employer contributions
|
10
|
|
|
10
|
|
|
20
|
|
|||
Benefits paid
|
(9
|
)
|
|
(30
|
)
|
|
(16
|
)
|
|||
Non-U.S. currency movement
|
2
|
|
|
(18
|
)
|
|
37
|
|
|||
Fair value of plan assets at end of period
|
$
|
200
|
|
|
$
|
189
|
|
|
$
|
212
|
|
Unfunded status
|
$
|
60
|
|
|
$
|
60
|
|
|
$
|
114
|
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Current liabilities
|
$
|
1
|
|
|
$
|
1
|
|
Non-current liabilities
|
59
|
|
|
59
|
|
||
Net amount recognized
|
$
|
60
|
|
|
$
|
60
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
0.7
|
%
|
|
0.8
|
%
|
|
0.4
|
%
|
Rate of compensation increase
|
0.7
|
%
|
|
0.8
|
%
|
|
0.8
|
%
|
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
0.8
|
%
|
|
0.4
|
%
|
|
1.3
|
%
|
Expected long-term rate of return on plan assets
|
2.5
|
%
|
|
2.5
|
%
|
|
2.5
|
%
|
Rate of compensation increase
|
0.8
|
%
|
|
0.8
|
%
|
|
0.9
|
%
|
|
June 29, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Equity:
|
|
|
|
|
|
||||||||||
Equity commingled/mutual funds
(1)(2)
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
68
|
|
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Fixed income commingled/mutual funds
(1)(3)
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
||||
Cash equivalents and short-term investments
|
3
|
|
|
4
|
|
|
—
|
|
|
7
|
|
||||
Fair value of plan assets
|
$
|
3
|
|
|
$
|
197
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
June 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Equity:
|
|
|
|
|
|
|
|
||||||||
Equity commingled/mutual funds
(1)(2)
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
67
|
|
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Fixed income commingled/mutual funds
(1)(3)
|
—
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||
Cash equivalents and short-term investments
|
2
|
|
|
4
|
|
|
—
|
|
|
6
|
|
||||
Fair value of plan assets
|
$
|
2
|
|
|
$
|
187
|
|
|
$
|
—
|
|
|
$
|
189
|
|
|
|
(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.
|
Note
9
.
|
Commitments, Contingencies and Related Parties
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Notes receivable, Flash Partners
|
$
|
767
|
|
|
$
|
264
|
|
Notes receivable, Flash Alliance
|
48
|
|
|
119
|
|
||
Notes receivable, Flash Forward
|
700
|
|
|
379
|
|
||
Investment in Flash Partners
|
191
|
|
|
187
|
|
||
Investment in Flash Alliance
|
283
|
|
|
279
|
|
||
Investment in Flash Forward
|
116
|
|
|
112
|
|
||
Total notes receivable and investments in Flash Ventures
|
$
|
2,105
|
|
|
$
|
1,340
|
|
|
June 29,
2018 |
||
|
|
||
Notes receivable
|
$
|
1,515
|
|
Equity investments
|
590
|
|
|
Operating lease guarantees
|
1,223
|
|
|
Inventory and prepayments
|
282
|
|
|
Maximum estimable loss exposure
|
$
|
3,610
|
|
|
Lease Amounts
|
||||||
|
(Japanese yen, in billions)
|
|
(U.S. dollar, in millions)
|
||||
Total guarantee obligations
|
¥
|
135
|
|
|
$
|
1,223
|
|
Annual Installments
|
|
Payment of Principal Amortization
|
|
Purchase Option Exercise Price at Final Lease Terms
|
|
Guarantee Amount
|
||||||
|
|
(in millions)
|
||||||||||
2019
|
|
$
|
341
|
|
|
$
|
24
|
|
|
$
|
365
|
|
2020
|
|
218
|
|
|
45
|
|
|
263
|
|
|||
2021
|
|
201
|
|
|
104
|
|
|
305
|
|
|||
2022
|
|
112
|
|
|
70
|
|
|
182
|
|
|||
2023
|
|
38
|
|
|
28
|
|
|
66
|
|
|||
Thereafter
|
|
5
|
|
|
37
|
|
|
42
|
|
|||
Total guarantee obligations
|
|
$
|
915
|
|
|
$
|
308
|
|
|
$
|
1,223
|
|
|
|
Lease Amounts
|
||
|
|
(in millions)
|
||
Fiscal year
|
|
|
||
2019
|
|
$
|
53
|
|
2020
|
|
45
|
|
|
2021
|
|
35
|
|
|
2022
|
|
23
|
|
|
2023
|
|
14
|
|
|
Thereafter
|
|
20
|
|
|
Total future minimum lease payments
|
|
$
|
190
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions)
|
||||||||||
Rent expense, net
|
$
|
49
|
|
|
$
|
56
|
|
|
$
|
59
|
|
Note
10
.
|
Business Segment, Geographic Information and Concentration of Risk
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Client Devices
|
$
|
10,108
|
|
|
$
|
9,520
|
|
|
$
|
6,205
|
|
Data Center Devices & Solutions
|
6,075
|
|
|
5,505
|
|
|
4,919
|
|
|||
Client Solutions
|
4,464
|
|
|
4,068
|
|
|
1,870
|
|
|||
Total revenues
|
$
|
20,647
|
|
|
$
|
19,093
|
|
|
$
|
12,994
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net revenue
(1)
|
|
|
|
|
|
||||||
United States
|
$
|
4,640
|
|
|
$
|
3,881
|
|
|
$
|
3,651
|
|
China
|
4,393
|
|
|
4,271
|
|
|
2,413
|
|
|||
Hong Kong
|
4,022
|
|
|
3,257
|
|
|
1,527
|
|
|||
Rest of Asia
|
2,752
|
|
|
3,181
|
|
|
2,462
|
|
|||
Europe, Middle East and Africa
|
3,858
|
|
|
3,276
|
|
|
2,664
|
|
|||
Other
|
982
|
|
|
1,227
|
|
|
277
|
|
|||
Total
|
$
|
20,647
|
|
|
$
|
19,093
|
|
|
$
|
12,994
|
|
|
|
(1)
|
Net revenue is attributed to geographic regions based on the ship-to location of the customer. License and royalty revenue is attributed to countries based upon the location of the headquarters of the licensee.
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Long-lived assets
(1)
|
|
|
|
||||
United States
|
$
|
1,187
|
|
|
$
|
1,249
|
|
Malaysia
|
737
|
|
|
556
|
|
||
China
|
427
|
|
|
443
|
|
||
Thailand
|
349
|
|
|
392
|
|
||
Rest of Asia
|
336
|
|
|
345
|
|
||
Europe, Middle East and Africa
|
59
|
|
|
48
|
|
||
Total
|
$
|
3,095
|
|
|
$
|
3,033
|
|
|
|
(1)
|
Long-lived assets include property, plant and equipment and are attributed to the geographic location in which they are located.
|
Note
11
.
|
Western Digital Corporation 401(k) Plan
|
Note
12
.
|
Shareholders’ Equity
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Options
|
$
|
25
|
|
|
$
|
41
|
|
|
$
|
55
|
|
Restricted and performance stock units
|
325
|
|
|
330
|
|
|
123
|
|
|||
Employee stock purchase plan
|
27
|
|
|
23
|
|
|
13
|
|
|||
Subtotal
|
377
|
|
|
394
|
|
|
191
|
|
|||
Tax benefit
|
(66
|
)
|
|
(105
|
)
|
|
(48
|
)
|
|||
Total
|
$
|
311
|
|
|
$
|
289
|
|
|
$
|
143
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cost of revenue
|
$
|
49
|
|
|
$
|
49
|
|
|
$
|
21
|
|
Research and development
|
170
|
|
|
173
|
|
|
76
|
|
|||
Selling, general and administrative
|
157
|
|
|
161
|
|
|
85
|
|
|||
Employee termination, asset impairment, and other charges
|
1
|
|
|
11
|
|
|
9
|
|
|||
Subtotal
|
377
|
|
|
394
|
|
|
191
|
|
|||
Tax benefit
|
(66
|
)
|
|
(105
|
)
|
|
(48
|
)
|
|||
Total
|
$
|
311
|
|
|
$
|
289
|
|
|
$
|
143
|
|
|
Unamortized Compensation Costs
|
|
Weighted Average Service Period
|
||
|
(in millions)
|
|
(years)
|
||
Options
|
$
|
25
|
|
|
1.8
|
RSUs and PSUs
(1)
|
464
|
|
|
2.1
|
|
ESPP
|
51
|
|
|
1.5
|
|
Total unamortized compensation cost
|
$
|
540
|
|
|
|
|
|
(1)
|
Weighted average service period assumes the performance metrics are met for the PSUs.
|
|
Number of Shares
|
|
Weighted Average Exercise Price Per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
|
(in millions)
|
|
|
|
(in years)
|
|
(in millions)
|
|||||
Options outstanding at July 3, 2015
|
6.8
|
|
|
$
|
50.00
|
|
|
|
|
|
||
Granted
|
1.7
|
|
|
82.68
|
|
|
|
|
|
|||
Assumed
|
2.9
|
|
|
38.37
|
|
|
|
|
|
|||
Exercised
|
(1.7
|
)
|
|
27.43
|
|
|
|
|
$
|
57
|
|
|
Canceled or expired
|
(0.7
|
)
|
|
66.03
|
|
|
|
|
|
|||
Options outstanding at July 1, 2016
|
9.0
|
|
|
55.74
|
|
|
|
|
|
|||
Granted
|
2.8
|
|
|
44.83
|
|
|
|
|
|
|||
Exercised
|
(3.5
|
)
|
|
37.72
|
|
|
|
|
120
|
|
||
Canceled or expired
|
(0.9
|
)
|
|
71.31
|
|
|
|
|
|
|||
Options outstanding at June 30, 2017
|
7.4
|
|
|
$
|
58.14
|
|
|
|
|
|
||
Exercised
|
(2.2
|
)
|
|
44.52
|
|
|
|
|
$
|
99
|
|
|
Canceled or expired
|
(0.4
|
)
|
|
60.85
|
|
|
|
|
|
|||
Options outstanding at June 29, 2018
|
4.8
|
|
|
$
|
64.23
|
|
|
3.7
|
|
$
|
94
|
|
Exercisable at June 29, 2018
|
3.0
|
|
|
$
|
70.70
|
|
|
3.1
|
|
$
|
47
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value at Vest Date
|
|||||
|
(in millions)
|
|
|
|
(in millions)
|
|||||
RSUs and PSUs outstanding at July 3, 2015
|
3.0
|
|
|
$
|
73.80
|
|
|
|
||
Granted
|
2.7
|
|
|
61.32
|
|
|
|
|||
Assumed
|
12.5
|
|
|
32.14
|
|
|
|
|||
Vested
|
(2.0
|
)
|
|
56.11
|
|
|
$
|
144
|
|
|
Forfeited
|
(0.5
|
)
|
|
62.09
|
|
|
|
|||
RSUs and PSUs outstanding at July 1, 2016
|
15.7
|
|
|
41.92
|
|
|
|
|||
Granted
|
6.0
|
|
|
44.13
|
|
|
|
|||
Vested
|
(5.9
|
)
|
|
46.98
|
|
|
399
|
|
||
Forfeited
|
(2.1
|
)
|
|
43.89
|
|
|
|
|||
RSUs and PSUs outstanding at June 30, 2017
|
13.7
|
|
|
$
|
45.01
|
|
|
|
||
Granted
|
6.3
|
|
|
74.68
|
|
|
|
|||
Vested
|
(6.3
|
)
|
|
45.20
|
|
|
$
|
552
|
|
|
Forfeited
|
(1.1
|
)
|
|
50.35
|
|
|
|
|||
RSUs and PSUs outstanding at June 29, 2018
|
12.6
|
|
|
$
|
58.31
|
|
|
|
|
2017
|
|
2016
|
Suboptimal exercise factor
|
2.69
|
|
2.71
|
Range of risk-free interest rates
|
0.59% to 1.42%
|
|
0.25% to 2.09%
|
Range of expected stock price volatility
|
0.35 to 0.49
|
|
0.28 to 0.49
|
Weighted-average expected volatility
|
0.40
|
|
0.35
|
Post-vesting termination rate
|
1.71%
|
|
0.47%
|
Dividend yield
|
3.42%
|
|
2.61%
|
Fair value
|
$13.72
|
|
$22.54
|
Weighted-average expected term (in years)
|
3.6
|
|
4.7
|
|
2018
|
|
2017
|
|
2016
|
Weighted-average expected term (in years)
|
1.24
|
|
1.26
|
|
1.27
|
Risk-free interest rate
|
2.25%
|
|
0.81%
|
|
0.82%
|
Stock price volatility
|
0.35
|
|
0.42
|
|
0.38
|
Dividend yield
|
2.42%
|
|
4.02%
|
|
3.92%
|
Fair value
|
$16.89
|
|
$10.06
|
|
$9.91
|
|
Number of Shares
|
|
|
(in millions)
|
|
Outstanding awards and shares available for award grants
|
36
|
|
ESPP
|
5
|
|
Total
|
41
|
|
Note
13
.
|
Income Tax Expense (Benefit)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Foreign
|
$
|
2,398
|
|
|
$
|
560
|
|
|
$
|
516
|
|
Domestic
|
(313
|
)
|
|
209
|
|
|
(363
|
)
|
|||
Income before taxes
|
$
|
2,085
|
|
|
$
|
769
|
|
|
$
|
153
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Foreign
|
$
|
166
|
|
|
$
|
127
|
|
|
$
|
59
|
|
Domestic - Federal
|
1,597
|
|
|
229
|
|
|
2
|
|
|||
Domestic - State
|
(5
|
)
|
|
4
|
|
|
(1
|
)
|
|||
|
1,758
|
|
|
360
|
|
|
60
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Foreign
|
(39
|
)
|
|
56
|
|
|
(39
|
)
|
|||
Domestic - Federal
|
(300
|
)
|
|
(44
|
)
|
|
(109
|
)
|
|||
Domestic - State
|
(9
|
)
|
|
—
|
|
|
(1
|
)
|
|||
|
(348
|
)
|
|
12
|
|
|
(149
|
)
|
|||
Income tax expense (benefit)
|
$
|
1,410
|
|
|
$
|
372
|
|
|
$
|
(89
|
)
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
(in millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Sales related reserves and accrued expenses not currently deductible
|
$
|
53
|
|
|
$
|
84
|
|
Accrued compensation and benefits not currently deductible
|
145
|
|
|
252
|
|
||
Net operating loss carryforward
|
443
|
|
|
292
|
|
||
Business credit carryforward
|
448
|
|
|
283
|
|
||
Long-lived assets
|
161
|
|
|
236
|
|
||
Other
|
118
|
|
|
141
|
|
||
Total deferred tax assets
|
1,368
|
|
|
1,288
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Long-lived assets
|
(491
|
)
|
|
(874
|
)
|
||
Unremitted earnings of certain non-U.S. entities
|
(5
|
)
|
|
(38
|
)
|
||
Other
|
(43
|
)
|
|
(11
|
)
|
||
Total deferred tax liabilities
|
(539
|
)
|
|
(923
|
)
|
||
Valuation allowances
|
(614
|
)
|
|
(518
|
)
|
||
Deferred tax assets (liabilities), net
|
$
|
215
|
|
|
$
|
(153
|
)
|
|
2018
|
|
2017
|
|
2016
|
|||
U.S. Federal statutory rate
|
28
|
%
|
|
35
|
%
|
|
35
|
%
|
Tax rate differential on international income
|
(34
|
)
|
|
(27
|
)
|
|
(103
|
)
|
Tax effect of U.S. non-deductible convertible debt costs
|
—
|
|
|
—
|
|
|
13
|
|
Tax effect of U.S. non-deductible acquisition costs
|
—
|
|
|
—
|
|
|
10
|
|
Tax effect of U.S. foreign income inclusion
|
1
|
|
|
4
|
|
|
9
|
|
Tax effect of U.S. non-deductible stock-based compensation
|
1
|
|
|
1
|
|
|
9
|
|
Tax effect of U.S. permanent differences
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
State income tax, net of federal tax
|
—
|
|
|
1
|
|
|
(1
|
)
|
Impact of 2017 Act:
|
|
|
|
|
|
|||
One-time mandatory deemed repatriation tax
|
75
|
|
|
—
|
|
|
—
|
|
Re-measurement of deferred taxes
|
(3
|
)
|
|
—
|
|
|
—
|
|
Change in valuation allowance
|
5
|
|
|
29
|
|
|
16
|
|
Unremitted earnings of certain non-U.S. entities
|
—
|
|
|
5
|
|
|
—
|
|
Tax related to SanDisk integration
|
—
|
|
|
12
|
|
|
—
|
|
Retroactive extension of Federal R&D credit
|
—
|
|
|
—
|
|
|
(9
|
)
|
Income tax credits
|
(4
|
)
|
|
(12
|
)
|
|
(43
|
)
|
Other
|
—
|
|
|
1
|
|
|
5
|
|
Effective tax rate
|
68
|
%
|
|
48
|
%
|
|
(58
|
)%
|
Jurisdiction
|
NOL/Tax Credit Carryforward Amount
|
|
Expiration
|
||
|
(in millions)
|
|
|
||
Federal NOL (Pre 2017 Act Generation)
|
$
|
766
|
|
|
2020 to 2037
|
Federal NOL (Post 2017 Act Generation)
|
704
|
|
|
No expiration
|
|
State NOL
|
850
|
|
|
2022 to 2038
|
|
Federal tax credits
|
155
|
|
|
2019 to 2038
|
|
State tax credits
|
550
|
|
|
No expiration
|
Jurisdiction
|
|
NOL Carryforward Amount
|
|
Expiration
|
||
|
|
(in millions)
|
|
|
||
Japan
|
|
$
|
141
|
|
|
2024 to 2026
|
Belgium
|
|
86
|
|
|
No expiration
|
|
China
|
|
129
|
|
|
2023 to 2024
|
|
Malaysia
|
|
117
|
|
|
No expiration
|
|
Spain
|
|
56
|
|
|
No expiration
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Unrecognized tax benefit, beginning balance
|
$
|
522
|
|
|
$
|
491
|
|
|
$
|
350
|
|
Gross increases related to current year tax positions
|
38
|
|
|
35
|
|
|
46
|
|
|||
Gross increases related to prior year tax positions
|
30
|
|
|
3
|
|
|
6
|
|
|||
Gross decreases related to prior year tax positions
|
(9
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|||
Settlements
|
(19
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Lapse of statute of limitations
|
(11
|
)
|
|
(19
|
)
|
|
(8
|
)
|
|||
Acquisitions
|
—
|
|
|
28
|
|
|
120
|
|
|||
Unrecognized tax benefit, ending balance
|
$
|
551
|
|
|
$
|
522
|
|
|
$
|
491
|
|
Note
14
.
|
Net Income Per Common Share
|
|
Year Ended
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share data)
|
||||||||||
Net income
|
$
|
675
|
|
|
$
|
397
|
|
|
$
|
242
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
297
|
|
|
288
|
|
|
239
|
|
|||
Employee stock options, RSUs, PSUs and ESPP
|
10
|
|
|
8
|
|
|
3
|
|
|||
Diluted
|
307
|
|
|
296
|
|
|
242
|
|
|||
Income per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
2.27
|
|
|
$
|
1.38
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
2.20
|
|
|
$
|
1.34
|
|
|
$
|
1.00
|
|
Anti-dilutive potential common shares excluded
(1)
|
2
|
|
|
3
|
|
|
5
|
|
|
|
(1)
|
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.
|
Note
15
.
|
Employee Termination, Asset Impairment and Other Charges
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Employee termination and other charges:
|
|
|
|
|
|
||||||
Restructuring Plan 2016
|
$
|
92
|
|
|
$
|
128
|
|
|
$
|
77
|
|
Closure of Foreign Manufacturing Facilities
|
56
|
|
|
10
|
|
|
128
|
|
|||
Business Realignment
|
50
|
|
|
72
|
|
|
94
|
|
|||
Total employee termination and other charges
|
198
|
|
|
210
|
|
|
299
|
|
|||
Stock-based compensation accelerations and adjustments
|
|
|
|
|
|
||||||
Business Realignment
|
1
|
|
|
11
|
|
|
9
|
|
|||
Total stock-based compensation accelerations and adjustments
|
1
|
|
|
11
|
|
|
9
|
|
|||
Asset impairment:
|
|
|
|
|
|
||||||
Restructuring Plan 2016
|
16
|
|
|
—
|
|
|
5
|
|
|||
Closure of Foreign Manufacturing Facility
|
—
|
|
|
11
|
|
|
24
|
|
|||
Business Realignment
|
—
|
|
|
—
|
|
|
8
|
|
|||
Total asset impairment
|
16
|
|
|
11
|
|
|
37
|
|
|||
Total employee termination and other charges, and stock-based compensation accelerations and adjustments
|
$
|
215
|
|
|
$
|
232
|
|
|
$
|
345
|
|
|
Employee Termination Benefits
|
|
Contract Termination and Other
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Accrual balance at June 30, 2017
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
13
|
|
Charges
|
68
|
|
|
24
|
|
|
92
|
|
|||
Cash payments
|
(74
|
)
|
|
(23
|
)
|
|
(97
|
)
|
|||
Non-cash items and other
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Accrual balance at June 29, 2018
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
Employee Termination Benefits
|
||
|
(in millions)
|
||
Accrual balance at June 30, 2017
|
$
|
—
|
|
Charges
|
56
|
|
|
Accrual balance at June 29, 2018
|
$
|
56
|
|
|
Employee Termination Benefits
|
|
Contract Termination and Other
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Accrual balance at June 30, 2017
|
$
|
18
|
|
|
$
|
5
|
|
|
$
|
23
|
|
Charges
|
43
|
|
|
7
|
|
|
50
|
|
|||
Cash payments
|
(29
|
)
|
|
(6
|
)
|
|
(35
|
)
|
|||
Non-cash items and other
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Accrual balance at June 29, 2018
|
$
|
31
|
|
|
$
|
5
|
|
|
$
|
36
|
|
Note
16
.
|
Legal Proceedings
|
Note
17
.
|
Separate Financial Information of Guarantor Subsidiaries
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
As of June 29, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
40
|
|
|
$
|
668
|
|
|
$
|
4,297
|
|
|
$
|
—
|
|
|
$
|
5,005
|
|
Accounts receivable, net
|
—
|
|
|
1,358
|
|
|
839
|
|
|
—
|
|
|
2,197
|
|
|||||
Intercompany receivables
|
1,903
|
|
|
4,256
|
|
|
2,674
|
|
|
(8,833
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
990
|
|
|
2,159
|
|
|
(205
|
)
|
|
2,944
|
|
|||||
Other current assets
|
20
|
|
|
195
|
|
|
277
|
|
|
—
|
|
|
492
|
|
|||||
Total current assets
|
1,963
|
|
|
7,467
|
|
|
10,246
|
|
|
(9,038
|
)
|
|
10,638
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,092
|
|
|
2,003
|
|
|
—
|
|
|
3,095
|
|
|||||
Notes receivable and investments in Flash Ventures
|
—
|
|
|
—
|
|
|
2,105
|
|
|
—
|
|
|
2,105
|
|
|||||
Goodwill
|
—
|
|
|
387
|
|
|
9,688
|
|
|
—
|
|
|
10,075
|
|
|||||
Other intangible assets, net
|
—
|
|
|
38
|
|
|
2,642
|
|
|
—
|
|
|
2,680
|
|
|||||
Investments in consolidated subsidiaries
|
20,847
|
|
|
19,893
|
|
|
—
|
|
|
(40,740
|
)
|
|
—
|
|
|||||
Loans due from consolidated affiliates
|
943
|
|
|
16
|
|
|
—
|
|
|
(959
|
)
|
|
—
|
|
|||||
Other non-current assets
|
182
|
|
|
29
|
|
|
431
|
|
|
—
|
|
|
642
|
|
|||||
Total assets
|
$
|
23,935
|
|
|
$
|
28,922
|
|
|
$
|
27,115
|
|
|
$
|
(50,737
|
)
|
|
$
|
29,235
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
1,986
|
|
|
$
|
—
|
|
|
$
|
2,265
|
|
Accounts payable to related parties
|
—
|
|
|
—
|
|
|
259
|
|
|
—
|
|
|
259
|
|
|||||
Intercompany payables
|
1,066
|
|
|
4,648
|
|
|
3,119
|
|
|
(8,833
|
)
|
|
—
|
|
|||||
Accrued expenses
|
198
|
|
|
505
|
|
|
571
|
|
|
—
|
|
|
1,274
|
|
|||||
Accrued compensation
|
—
|
|
|
297
|
|
|
182
|
|
|
—
|
|
|
479
|
|
|||||
Current portion of long-term debt
|
179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|||||
Total current liabilities
|
1,443
|
|
|
5,729
|
|
|
6,117
|
|
|
(8,833
|
)
|
|
4,456
|
|
|||||
Long-term debt
|
10,962
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
10,993
|
|
|||||
Loans due to consolidated affiliates
|
—
|
|
|
427
|
|
|
532
|
|
|
(959
|
)
|
|
—
|
|
|||||
Other liabilities
|
(1
|
)
|
|
1,768
|
|
|
488
|
|
|
—
|
|
|
2,255
|
|
|||||
Total liabilities
|
12,404
|
|
|
7,924
|
|
|
7,168
|
|
|
(9,792
|
)
|
|
17,704
|
|
|||||
Total shareholders’ equity
|
11,531
|
|
|
20,998
|
|
|
19,947
|
|
|
(40,945
|
)
|
|
11,531
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
23,935
|
|
|
$
|
28,922
|
|
|
$
|
27,115
|
|
|
$
|
(50,737
|
)
|
|
$
|
29,235
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
As of June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
18
|
|
|
$
|
1,212
|
|
|
$
|
5,124
|
|
|
$
|
—
|
|
|
$
|
6,354
|
|
Accounts receivable, net
|
—
|
|
|
1,247
|
|
|
701
|
|
|
—
|
|
|
1,948
|
|
|||||
Intercompany receivables
|
1,225
|
|
|
2,528
|
|
|
622
|
|
|
(4,375
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
1,133
|
|
|
1,494
|
|
|
(286
|
)
|
|
2,341
|
|
|||||
Other current assets
|
4
|
|
|
158
|
|
|
245
|
|
|
6
|
|
|
413
|
|
|||||
Total current assets
|
1,247
|
|
|
6,278
|
|
|
8,186
|
|
|
(4,655
|
)
|
|
11,056
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,124
|
|
|
1,909
|
|
|
—
|
|
|
3,033
|
|
|||||
Notes receivable and investments in Flash Ventures
|
—
|
|
|
—
|
|
|
1,340
|
|
|
—
|
|
|
1,340
|
|
|||||
Goodwill
|
—
|
|
|
331
|
|
|
9,683
|
|
|
—
|
|
|
10,014
|
|
|||||
Other intangible assets, net
|
—
|
|
|
11
|
|
|
3,812
|
|
|
—
|
|
|
3,823
|
|
|||||
Investments in consolidated subsidiaries
|
19,082
|
|
|
17,588
|
|
|
—
|
|
|
(36,670
|
)
|
|
—
|
|
|||||
Loans due from consolidated affiliates
|
4,700
|
|
|
16
|
|
|
—
|
|
|
(4,716
|
)
|
|
—
|
|
|||||
Other non-current assets
|
51
|
|
|
723
|
|
|
419
|
|
|
(599
|
)
|
|
594
|
|
|||||
Total assets
|
$
|
25,080
|
|
|
$
|
26,071
|
|
|
$
|
25,349
|
|
|
$
|
(46,640
|
)
|
|
$
|
29,860
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
1,887
|
|
|
$
|
—
|
|
|
$
|
2,144
|
|
Accounts payable to Flash Ventures
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|||||
Intercompany payables
|
270
|
|
|
4,039
|
|
|
66
|
|
|
(4,375
|
)
|
|
—
|
|
|||||
Accrued expenses
|
270
|
|
|
364
|
|
|
621
|
|
|
—
|
|
|
1,255
|
|
|||||
Accrued compensation
|
—
|
|
|
313
|
|
|
193
|
|
|
—
|
|
|
506
|
|
|||||
Current portion of long-term debt
|
233
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|||||
Total current liabilities
|
773
|
|
|
4,973
|
|
|
2,973
|
|
|
(4,375
|
)
|
|
4,344
|
|
|||||
Long-term debt
|
12,889
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
12,918
|
|
|||||
Loans due to consolidated affiliates
|
—
|
|
|
546
|
|
|
4,170
|
|
|
(4,716
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
1,243
|
|
|
530
|
|
|
(593
|
)
|
|
1,180
|
|
|||||
Total liabilities
|
13,662
|
|
|
6,762
|
|
|
7,702
|
|
|
(9,684
|
)
|
|
18,442
|
|
|||||
Total shareholders’ equity
|
11,418
|
|
|
19,309
|
|
|
17,647
|
|
|
(36,956
|
)
|
|
11,418
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
25,080
|
|
|
$
|
26,071
|
|
|
$
|
25,349
|
|
|
$
|
(46,640
|
)
|
|
$
|
29,860
|
|
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For the year ended June 29, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Revenue, net
|
$
|
—
|
|
|
$
|
14,913
|
|
|
$
|
20,155
|
|
|
$
|
(14,421
|
)
|
|
$
|
20,647
|
|
Cost of revenue
|
—
|
|
|
12,913
|
|
|
14,573
|
|
|
(14,544
|
)
|
|
12,942
|
|
|||||
Gross profit
|
—
|
|
|
2,000
|
|
|
5,582
|
|
|
123
|
|
|
7,705
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
—
|
|
|
1,551
|
|
|
849
|
|
|
—
|
|
|
2,400
|
|
|||||
Selling, general and administrative
|
8
|
|
|
1,044
|
|
|
421
|
|
|
—
|
|
|
1,473
|
|
|||||
Intercompany operating expense (income)
|
—
|
|
|
(1,626
|
)
|
|
1,626
|
|
|
—
|
|
|
—
|
|
|||||
Employee termination, asset impairment, and other charges
|
1
|
|
|
47
|
|
|
167
|
|
|
—
|
|
|
215
|
|
|||||
Total operating expenses
|
9
|
|
|
1,016
|
|
|
3,063
|
|
|
—
|
|
|
4,088
|
|
|||||
Operating income (loss)
|
(9
|
)
|
|
984
|
|
|
2,519
|
|
|
123
|
|
|
3,617
|
|
|||||
Interest and other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
211
|
|
|
8
|
|
|
51
|
|
|
(210
|
)
|
|
60
|
|
|||||
Interest expense
|
(674
|
)
|
|
(21
|
)
|
|
(191
|
)
|
|
210
|
|
|
(676
|
)
|
|||||
Other expense, net
|
(905
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
—
|
|
|
(916
|
)
|
|||||
Total interest and other expense, net
|
(1,368
|
)
|
|
(22
|
)
|
|
(142
|
)
|
|
—
|
|
|
(1,532
|
)
|
|||||
Income (loss) before taxes
|
(1,377
|
)
|
|
962
|
|
|
2,377
|
|
|
123
|
|
|
2,085
|
|
|||||
Income tax expense (benefit)
|
(354
|
)
|
|
1,633
|
|
|
131
|
|
|
—
|
|
|
1,410
|
|
|||||
Equity in earnings from subsidiaries
|
1,698
|
|
|
2,223
|
|
|
—
|
|
|
(3,921
|
)
|
|
—
|
|
|||||
Net income
|
$
|
675
|
|
|
$
|
1,552
|
|
|
$
|
2,246
|
|
|
$
|
(3,798
|
)
|
|
$
|
675
|
|
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For the year ended June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Revenue, net
|
$
|
—
|
|
|
$
|
14,732
|
|
|
$
|
16,381
|
|
|
$
|
(12,020
|
)
|
|
$
|
19,093
|
|
Cost of revenue
|
—
|
|
|
12,786
|
|
|
12,203
|
|
|
(11,968
|
)
|
|
13,021
|
|
|||||
Gross profit
|
—
|
|
|
1,946
|
|
|
4,178
|
|
|
(52
|
)
|
|
6,072
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
—
|
|
|
1,619
|
|
|
822
|
|
|
—
|
|
|
2,441
|
|
|||||
Selling, general and administrative
|
6
|
|
|
1,006
|
|
|
433
|
|
|
—
|
|
|
1,445
|
|
|||||
Intercompany operating expense (income)
|
—
|
|
|
(1,736
|
)
|
|
1,736
|
|
|
—
|
|
|
—
|
|
|||||
Employee termination, asset impairment, and other charges
|
—
|
|
|
88
|
|
|
144
|
|
|
—
|
|
|
232
|
|
|||||
Total operating expenses
|
6
|
|
|
977
|
|
|
3,135
|
|
|
—
|
|
|
4,118
|
|
|||||
Operating income (loss)
|
(6
|
)
|
|
969
|
|
|
1,043
|
|
|
(52
|
)
|
|
1,954
|
|
|||||
Interest and other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
347
|
|
|
11
|
|
|
22
|
|
|
(354
|
)
|
|
26
|
|
|||||
Interest expense
|
(843
|
)
|
|
(10
|
)
|
|
(348
|
)
|
|
354
|
|
|
(847
|
)
|
|||||
Other income (expense), net
|
(290
|
)
|
|
49
|
|
|
(61
|
)
|
|
(62
|
)
|
|
(364
|
)
|
|||||
Total interest and other income (expense), net
|
(786
|
)
|
|
50
|
|
|
(387
|
)
|
|
(62
|
)
|
|
(1,185
|
)
|
|||||
Income (loss) before taxes
|
(792
|
)
|
|
1,019
|
|
|
656
|
|
|
(114
|
)
|
|
769
|
|
|||||
Income tax expense (benefit)
|
(282
|
)
|
|
259
|
|
|
395
|
|
|
—
|
|
|
372
|
|
|||||
Equity in earnings from subsidiaries
|
907
|
|
|
287
|
|
|
—
|
|
|
(1,194
|
)
|
|
—
|
|
|||||
Net income
|
$
|
397
|
|
|
$
|
1,047
|
|
|
$
|
261
|
|
|
$
|
(1,308
|
)
|
|
$
|
397
|
|
Condensed Consolidating Statement of Operations
|
|||||||||||||||||||
For the year ended July 1, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Revenue, net
|
$
|
—
|
|
|
$
|
12,600
|
|
|
$
|
13,285
|
|
|
$
|
(12,891
|
)
|
|
$
|
12,994
|
|
Cost of revenue
|
—
|
|
|
11,796
|
|
|
10,662
|
|
|
(12,899
|
)
|
|
9,559
|
|
|||||
Gross profit
|
—
|
|
|
804
|
|
|
2,623
|
|
|
8
|
|
|
3,435
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
—
|
|
|
1,095
|
|
|
532
|
|
|
—
|
|
|
1,627
|
|
|||||
Selling, general and administrative
|
4
|
|
|
645
|
|
|
348
|
|
|
—
|
|
|
997
|
|
|||||
Intercompany operating expense (income)
|
—
|
|
|
(1,087
|
)
|
|
1,087
|
|
|
—
|
|
|
—
|
|
|||||
Employee termination, asset impairment, and other charges
|
—
|
|
|
105
|
|
|
240
|
|
|
—
|
|
|
345
|
|
|||||
Total operating expenses
|
4
|
|
|
758
|
|
|
2,207
|
|
|
—
|
|
|
2,969
|
|
|||||
Operating income (loss)
|
(4
|
)
|
|
46
|
|
|
416
|
|
|
8
|
|
|
466
|
|
|||||
Interest and other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
54
|
|
|
2
|
|
|
24
|
|
|
(54
|
)
|
|
26
|
|
|||||
Interest expense
|
(184
|
)
|
|
(128
|
)
|
|
(8
|
)
|
|
54
|
|
|
(266
|
)
|
|||||
Other income (expense), net
|
11
|
|
|
(30
|
)
|
|
(54
|
)
|
|
—
|
|
|
(73
|
)
|
|||||
Total interest and other expense, net
|
(119
|
)
|
|
(156
|
)
|
|
(38
|
)
|
|
—
|
|
|
(313
|
)
|
|||||
Income (loss) before taxes
|
(123
|
)
|
|
(110
|
)
|
|
378
|
|
|
8
|
|
|
153
|
|
|||||
Income tax benefit
|
(44
|
)
|
|
(27
|
)
|
|
(18
|
)
|
|
—
|
|
|
(89
|
)
|
|||||
Equity in earnings from subsidiaries
|
321
|
|
|
400
|
|
|
—
|
|
|
(721
|
)
|
|
—
|
|
|||||
Net income
|
$
|
242
|
|
|
$
|
317
|
|
|
$
|
396
|
|
|
$
|
(713
|
)
|
|
$
|
242
|
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
|
|||||||||||||||||||
For the year ended June 29, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Net income
|
$
|
675
|
|
|
$
|
1,552
|
|
|
$
|
2,246
|
|
|
$
|
(3,798
|
)
|
|
$
|
675
|
|
Other comprehensive income, before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Actuarial pension loss
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
4
|
|
|
(2
|
)
|
|||||
Foreign currency translation adjustment
|
18
|
|
|
15
|
|
|
15
|
|
|
(30
|
)
|
|
18
|
|
|||||
Net unrealized gain (loss) on derivative contracts and available-for-sale securities
|
7
|
|
|
(10
|
)
|
|
(6
|
)
|
|
16
|
|
|
7
|
|
|||||
Total other comprehensive income, before tax
|
23
|
|
|
3
|
|
|
7
|
|
|
(10
|
)
|
|
23
|
|
|||||
Income tax benefit (expense) related to items of other comprehensive income
|
(4
|
)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Other comprehensive income, net of tax
|
19
|
|
|
4
|
|
|
6
|
|
|
(10
|
)
|
|
19
|
|
|||||
Total comprehensive income
|
$
|
694
|
|
|
$
|
1,556
|
|
|
$
|
2,252
|
|
|
$
|
(3,808
|
)
|
|
$
|
694
|
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
|
|||||||||||||||||||
For the year ended June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Net income
|
$
|
397
|
|
|
$
|
1,047
|
|
|
$
|
261
|
|
|
$
|
(1,308
|
)
|
|
$
|
397
|
|
Other comprehensive loss, before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Actuarial pension gain
|
39
|
|
|
39
|
|
|
39
|
|
|
(78
|
)
|
|
39
|
|
|||||
Foreign currency translation adjustment
|
(115
|
)
|
|
(113
|
)
|
|
(136
|
)
|
|
249
|
|
|
(115
|
)
|
|||||
Net unrealized gain (loss) on derivative contracts and available-for-sale securities
|
(75
|
)
|
|
(75
|
)
|
|
(73
|
)
|
|
148
|
|
|
(75
|
)
|
|||||
Total other comprehensive loss, before tax
|
(151
|
)
|
|
(149
|
)
|
|
(170
|
)
|
|
319
|
|
|
(151
|
)
|
|||||
Income tax expense related to items of other comprehensive loss
|
(10
|
)
|
|
(10
|
)
|
|
(8
|
)
|
|
18
|
|
|
(10
|
)
|
|||||
Other comprehensive loss, net of tax
|
(161
|
)
|
|
(159
|
)
|
|
(178
|
)
|
|
337
|
|
|
(161
|
)
|
|||||
Total comprehensive income
|
$
|
236
|
|
|
$
|
888
|
|
|
$
|
83
|
|
|
$
|
(971
|
)
|
|
$
|
236
|
|
Condensed Consolidating Statement of Comprehensive Income (Loss)
|
|||||||||||||||||||
For the year ended July 1, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Net income
|
$
|
242
|
|
|
$
|
317
|
|
|
$
|
396
|
|
|
$
|
(713
|
)
|
|
$
|
242
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Actuarial pension loss
|
(73
|
)
|
|
(73
|
)
|
|
(73
|
)
|
|
146
|
|
|
(73
|
)
|
|||||
Foreign currency translation adjustment
|
74
|
|
|
74
|
|
|
74
|
|
|
(148
|
)
|
|
74
|
|
|||||
Net unrealized gain (loss) on derivative contracts
|
99
|
|
|
99
|
|
|
93
|
|
|
(192
|
)
|
|
99
|
|
|||||
Total other comprehensive loss, before tax
|
100
|
|
|
100
|
|
|
94
|
|
|
(194
|
)
|
|
100
|
|
|||||
Income tax benefit related to items of other comprehensive income (loss)
|
23
|
|
|
23
|
|
|
23
|
|
|
(46
|
)
|
|
23
|
|
|||||
Other comprehensive loss, net of tax
|
123
|
|
|
123
|
|
|
117
|
|
|
(240
|
)
|
|
123
|
|
|||||
Total comprehensive income
|
$
|
365
|
|
|
$
|
440
|
|
|
$
|
513
|
|
|
$
|
(953
|
)
|
|
$
|
365
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the year ended June 29, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(144
|
)
|
|
$
|
211
|
|
|
$
|
4,158
|
|
|
$
|
(20
|
)
|
|
$
|
4,205
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
—
|
|
|
(220
|
)
|
|
(615
|
)
|
|
—
|
|
|
(835
|
)
|
|||||
Proceeds from the sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
|
(94
|
)
|
|
(6
|
)
|
|
—
|
|
|
(100
|
)
|
|||||
Purchases of investments
|
—
|
|
|
(21
|
)
|
|
(68
|
)
|
|
—
|
|
|
(89
|
)
|
|||||
Proceeds from sale of investments
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|||||
Proceeds from maturities of investments
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|||||
Notes receivable issuances to Flash Ventures
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|
—
|
|
|
(1,313
|
)
|
|||||
Notes receivable proceeds from Flash Ventures
|
—
|
|
|
—
|
|
|
571
|
|
|
—
|
|
|
571
|
|
|||||
Strategic investments and other, net
|
—
|
|
|
(2
|
)
|
|
20
|
|
|
—
|
|
|
18
|
|
|||||
Intercompany loan from consolidated affiliates
|
3,757
|
|
|
—
|
|
|
—
|
|
|
(3,757
|
)
|
|
—
|
|
|||||
Advances from (to) parent and consolidated affiliates
|
(86
|
)
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
3,671
|
|
|
(251
|
)
|
|
(1,318
|
)
|
|
(3,757
|
)
|
|
(1,655
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Issuance of stock under employee stock plans
|
220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|||||
Taxes paid on vested stock awards under employee stock plans
|
(171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(171
|
)
|
|||||
Repurchases of common stock
|
(591
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(591
|
)
|
|||||
Dividends paid to shareholders
|
(593
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(593
|
)
|
|||||
Settlement of debt hedge contracts
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Repayment of debt and premiums
|
(17,074
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,074
|
)
|
|||||
Proceeds from debt
|
13,840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,840
|
|
|||||
Proceeds from (repayment of) revolving credit facility
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|||||
Debt issuance costs
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|||||
Intercompany loan to consolidated affiliates
|
—
|
|
|
(119
|
)
|
|
(3,638
|
)
|
|
3,757
|
|
|
—
|
|
|||||
Change in investment in consolidated subsidiaries
|
395
|
|
|
(385
|
)
|
|
(30
|
)
|
|
20
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(3,505
|
)
|
|
(504
|
)
|
|
(3,668
|
)
|
|
3,777
|
|
|
(3,900
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
22
|
|
|
(544
|
)
|
|
(827
|
)
|
|
—
|
|
|
(1,349
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
18
|
|
|
1,212
|
|
|
5,124
|
|
|
—
|
|
|
6,354
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
40
|
|
|
$
|
668
|
|
|
$
|
4,297
|
|
|
$
|
—
|
|
|
$
|
5,005
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the year ended June 30, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(360
|
)
|
|
$
|
(836
|
)
|
|
$
|
4,593
|
|
|
$
|
40
|
|
|
$
|
3,437
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
—
|
|
|
(240
|
)
|
|
(338
|
)
|
|
—
|
|
|
(578
|
)
|
|||||
Proceeds from the sale of property, plant and equipment
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
—
|
|
|
(281
|
)
|
|||||
Proceeds from sale of investments
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
94
|
|
|||||
Proceeds from maturities of investments
|
—
|
|
|
—
|
|
|
417
|
|
|
—
|
|
|
417
|
|
|||||
Investments in Flash Ventures
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||||
Notes receivable issuances to Flash Ventures
|
—
|
|
|
—
|
|
|
(549
|
)
|
|
—
|
|
|
(549
|
)
|
|||||
Notes receivable proceeds from Flash Ventures
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
|||||
Strategic investments and other, net
|
—
|
|
|
(1
|
)
|
|
(31
|
)
|
|
—
|
|
|
(32
|
)
|
|||||
Intercompany loans from consolidated affiliates
|
1,300
|
|
|
39
|
|
|
—
|
|
|
(1,339
|
)
|
|
—
|
|
|||||
Advances from (to) consolidated affiliates
|
(158
|
)
|
|
166
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
1,142
|
|
|
(36
|
)
|
|
(395
|
)
|
|
(1,347
|
)
|
|
(636
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Issuance of stock under employee stock plans
|
235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|||||
Taxes paid on vested stock awards under employee stock plans
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|||||
Excess tax benefits from employee stock plans
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|||||
Proceeds from acquired call option
|
—
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
|||||
Settlement of convertible debt
|
—
|
|
|
—
|
|
|
(492
|
)
|
|
—
|
|
|
(492
|
)
|
|||||
Dividends paid to shareholders
|
(574
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(574
|
)
|
|||||
Settlement of debt hedge contracts
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|||||
Repayment of debt and premiums
|
(8,702
|
)
|
|
(2,995
|
)
|
|
—
|
|
|
—
|
|
|
(11,697
|
)
|
|||||
Proceeds from debt
|
7,908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,908
|
|
|||||
Debt issuance costs
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Intercompany loan to consolidated affiliates
|
—
|
|
|
(5,454
|
)
|
|
4,115
|
|
|
1,339
|
|
|
—
|
|
|||||
Change in investment in consolidated subsidiaries
|
384
|
|
|
9,348
|
|
|
(9,700
|
)
|
|
(32
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(764
|
)
|
|
878
|
|
|
(6,016
|
)
|
|
1,307
|
|
|
(4,595
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
18
|
|
|
6
|
|
|
(1,821
|
)
|
|
—
|
|
|
(1,797
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
—
|
|
|
1,206
|
|
|
6,945
|
|
|
—
|
|
|
8,151
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
18
|
|
|
$
|
1,212
|
|
|
$
|
5,124
|
|
|
$
|
—
|
|
|
$
|
6,354
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For the year ended July 1, 2016
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Total
Company |
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
(210
|
)
|
|
$
|
1,018
|
|
|
$
|
1,299
|
|
|
$
|
(124
|
)
|
|
$
|
1,983
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
—
|
|
|
(233
|
)
|
|
(351
|
)
|
|
—
|
|
|
(584
|
)
|
|||||
Acquisitions, net of cash acquired
|
—
|
|
|
(13,767
|
)
|
|
3,932
|
|
|
—
|
|
|
(9,835
|
)
|
|||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(632
|
)
|
|
—
|
|
|
(632
|
)
|
|||||
Proceeds from sale of investments
|
—
|
|
|
—
|
|
|
1,204
|
|
|
—
|
|
|
1,204
|
|
|||||
Proceeds from maturities of investments
|
—
|
|
|
—
|
|
|
405
|
|
|
—
|
|
|
405
|
|
|||||
Notes receivable issuances to Flash Ventures
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
(106
|
)
|
|||||
Notes receivable proceeds from Flash Ventures
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Strategic investments and other, net
|
(34
|
)
|
|
(10
|
)
|
|
(32
|
)
|
|
—
|
|
|
(76
|
)
|
|||||
Intercompany loans from (to) consolidated affiliates
|
(6,000
|
)
|
|
40
|
|
|
—
|
|
|
5,960
|
|
|
—
|
|
|||||
Advances to consolidated affiliates
|
(8,845
|
)
|
|
(96
|
)
|
|
(229
|
)
|
|
9,170
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
(14,879
|
)
|
|
(14,066
|
)
|
|
4,207
|
|
|
15,130
|
|
|
(9,608
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Issuance of stock under employee stock plans
|
117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|||||
Taxes paid on vested stock awards under employee stock plans
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||
Excess tax benefits from employee stock plans
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Proceeds from acquired call option
|
—
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
409
|
|
|||||
Settlement of convertible debt
|
—
|
|
|
—
|
|
|
(2,611
|
)
|
|
—
|
|
|
(2,611
|
)
|
|||||
Repurchases of common stock
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60
|
)
|
|||||
Dividends paid to shareholders
|
(464
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(464
|
)
|
|||||
Repayment of debt
|
—
|
|
|
(2,313
|
)
|
|
—
|
|
|
—
|
|
|
(2,313
|
)
|
|||||
Proceeds from debt
|
14,108
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
17,108
|
|
|||||
Proceeds from (repayment of) revolving credit facility
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
(255
|
)
|
|||||
Debt issuance costs
|
(497
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(524
|
)
|
|||||
Payment upon settlement of acquired warrants
|
—
|
|
|
—
|
|
|
(613
|
)
|
|
—
|
|
|
(613
|
)
|
|||||
Intercompany loan from (to) consolidated affiliates
|
—
|
|
|
6,000
|
|
|
(40
|
)
|
|
(5,960
|
)
|
|
—
|
|
|||||
Change in investment in consolidated subsidiaries
|
1,928
|
|
|
6,933
|
|
|
185
|
|
|
(9,046
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
15,089
|
|
|
13,593
|
|
|
(2,925
|
)
|
|
(15,006
|
)
|
|
10,751
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
545
|
|
|
2,582
|
|
|
—
|
|
|
3,127
|
|
|||||
Cash and cash equivalents, beginning of year
|
—
|
|
|
661
|
|
|
4,363
|
|
|
—
|
|
|
5,024
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
—
|
|
|
$
|
1,206
|
|
|
$
|
6,945
|
|
|
$
|
—
|
|
|
$
|
8,151
|
|
Note
18
.
|
Quarterly Results of Operations (unaudited)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
5,181
|
|
|
$
|
5,336
|
|
|
$
|
5,013
|
|
|
$
|
5,117
|
|
Gross profit
|
1,913
|
|
|
2,013
|
|
|
1,927
|
|
|
1,852
|
|
||||
Operating income
|
905
|
|
|
955
|
|
|
914
|
|
|
843
|
|
||||
Net income (loss)
|
681
|
|
|
(823
|
)
|
|
61
|
|
|
756
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per common share
|
$
|
2.31
|
|
|
$
|
(2.78
|
)
|
|
$
|
0.20
|
|
|
$
|
2.53
|
|
Diluted income (loss) per common share
|
$
|
2.23
|
|
|
$
|
(2.78
|
)
|
|
$
|
0.20
|
|
|
$
|
2.46
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenue, net
|
$
|
4,714
|
|
|
$
|
4,888
|
|
|
$
|
4,649
|
|
|
$
|
4,842
|
|
Gross profit
|
1,335
|
|
|
1,533
|
|
|
1,523
|
|
|
1,681
|
|
||||
Operating income (loss)
|
232
|
|
|
545
|
|
|
525
|
|
|
652
|
|
||||
Net income (loss)
|
(366
|
)
|
|
235
|
|
|
248
|
|
|
280
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per common share
|
$
|
(1.28
|
)
|
|
$
|
0.82
|
|
|
$
|
0.86
|
|
|
$
|
0.96
|
|
Diluted income (loss) per common share
|
$
|
(1.28
|
)
|
|
$
|
0.80
|
|
|
$
|
0.83
|
|
|
$
|
0.93
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Director, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
(1)
|
Financial Statements.
The financial statements included in Part II, Item 8 of this document are filed as part of this Annual Report on Form 10‑K.
|
(2)
|
Financial Statement Schedules.
|
(3)
|
Exhibits.
The exhibits listed in the Exhibit Index below are filed with, or incorporated by reference in, this Annual Report on Form 10‑K, as specified in the Exhibit List, from exhibits previously filed with the SEC. Certain agreements listed in the Exhibit List that we have filed or incorporated by reference may contain representations and warranties by us or our subsidiaries. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosures, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the actual state of affairs at the date hereof and should not be relied upon.
|
Exhibit
Number
|
|
Description
|
|
Agreement and Plan of Merger, dated as of October 21, 2015, among Western Digital Corporation, Schrader Acquisition Corporation and SanDisk Corporation (Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on October 26, 2015)±
|
|
|
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)
|
|
|
Amended and Restated By-Laws of Western Digital Corporation, as amended effective as of May 2, 2018 (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 May 7, 2018)
|
|
|
Indenture (including Form of 0.5% Convertible Senior Notes due 2020), dated as of October 29, 2013, by and between SanDisk Corporation and The Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit 4.1 to SanDisk Corporation’s Current Report on Form 8-K (File No. 000-26734) with the Securities and Exchange Commission on October 29, 2013)
|
|
|
First Supplemental Indenture to the Indenture filed as Exhibit 4.1 hereto, dated as of May 12, 2016, among SanDisk Corporation, The Bank of New York Mellon Trust Company, N.A., as trustee, and Western Digital Corporation (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 12, 2016)
|
|
|
Indenture (including Form of 4.750% Senior Notes due 2026), dated as of February 13, 2018, among Western Digital Corporation; HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 333-222762) with the Securities and Exchange Commission on February 13, 2018)
|
|
|
Indenture (including Form of 1.50% Convertible Senior Notes due 2024), dated as of February 13, 2018, among Western Digital Corporation; HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee (Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 333-222762) with the Securities and Exchange Commission on February 13, 2018)
|
|
|
Western Digital Corporation 2017 Performance Incentive Plan (formerly named the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan), amended and restated as of August 3, 2017 (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 2, 2017)*
|
|
|
Form of Notice of Grant of Stock Option and Option Agreement - Executives, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)*
|
Exhibit
Number
|
|
Description
|
|
Form of Notice of Grant of Stock Option and Option Agreement - Non-Executives, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)*
|
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement - Executives, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)*
|
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)*
|
|
|
Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement - Executives, under the Western Digital Corporation 2017 Performance Incentive Plan (Filed as Exhibit 10.1.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)*
|
|
|
Form of Notice of Grant of Stock Option and Option Agreement - Executives, as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.1.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)*
|
|
|
Form of Notice of Grant of Stock Option and Option Agreement - Non-Executives, as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.1.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)*
|
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement - Executives, as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.1.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)*
|
|
|
Form of Notice of Grant of Stock Units and Stock Unit Award Agreement, as amended on November 3, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (Filed as Exhibit 10.1.4 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 10, 2016)*
|
|
|
Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement for Mark Long, dated September 17, 2015, under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 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 November 10, 2015)*
|
|
|
Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement (revised March 2016) under the Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 Performance Incentive Plan) (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 9, 2016)*
|
|
|
Western Digital Corporation Amended and Restated 2004 Performance Incentive Plan (now named the Western Digital Corporation 2017 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)*
|
|
|
Western Digital Corporation 2017 Performance Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, as amended November 1, 2017 (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 February 6, 2018)*
|
|
|
Western Digital Corporation Incentive Compensation Plan, as Amended and Restated August 5, 2015 (Filed as Exhibit 10.1.8 to the Company’s Annual Report on Form 10‑K (File No. 1-08703) with the Securities and Exchange Commission on August 21, 2015)*
|
|
|
Western Digital Corporation 2005 Employee Stock Purchase Plan, as amended August 5, 2015 (Filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 333-207842) with the Securities and Exchange Commission on November 5, 2015)*
|
|
|
SanDisk Corporation 2013 Incentive Plan (Filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 333-211420) with the Securities and Exchange Commission on May 17, 2016)*
|
|
|
Western Digital Corporation Summary of Compensation Arrangements for Named Executive Officers and Directors†*
|
|
|
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)*
|
|
|
Western Digital Corporation Amended and Restated Change of Control Severance Plan, amended and restated as of November 3, 2015 (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on November 5, 2015)*
|
|
|
Western Digital Corporation Executive Severance Plan, amended and restated as of February 2, 2017 (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 February 7, 2017)*
|
|
|
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)*
|
Exhibit
Number
|
|
Description
|
|
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)*
|
|
|
Form of Indemnification Agreement entered into between SanDisk Corporation and its directors and officers
†
*
|
|
|
Loan Agreement, dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders and financial institutions from time to time party thereto (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 9, 2016)
|
|
|
Amendment No. 1, dated as of August 17, 2016, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 August 18, 2016)
|
|
|
Amendment No. 2, dated as of September 22, 2016, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 September 22, 2016)
|
|
|
Amendment No. 3, dated as of March 14, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 March 14, 2017)
|
|
|
Amendment No. 4, dated as of March 23, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 March 23, 2017)
|
|
|
Amendment No. 5, dated as of November 8, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 8, 2017)
|
|
|
Amendment No. 6, dated as of November 29, 2017, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 29, 2017)
|
|
|
Amendment No. 7, dated as of February 27, 2018, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 February 27, 2018)
|
|
|
Amendment No. 8, dated as of May 15, 2018, to the Loan Agreement dated as of April 29, 2016, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders party thereto and the other loan parties thereto (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 May 15, 2018)
|
|
|
Guaranty Agreement, dated as of April 29, 2016, by and among Western Digital Corporation, the subsidiary guarantors party thereto and JPMorgan Chase Bank, N.A., as administrative agent for the guaranteed creditors (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No.1-08703) with the Securities and Exchange Commission on April 29, 2016)
|
|
|
Security Agreement, dated as of May 12, 2016, by and among the debtors (as defined therein) party thereto and JPMorgan Chase Bank, N.A., as collateral agent (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 1-08703) with the Securities and Exchange Commission on May 12, 2016)
|
|
|
Flash Alliance Master Agreement, dated as of July 7, 2006, by and among SanDisk Corporation, Toshiba Corporation and SanDisk (Ireland) Limited (Filed as Exhibit 10.1 to SanDisk Corporation’s Quarterly Report on Form 10-Q (File No. 000-26734) with the Securities and Exchange Commission on November 8, 2006)#
|
|
|
Operating Agreement of Flash Alliance, Ltd., dated as of July 7, 2006, by and between Toshiba Corporation and SanDisk (Ireland) Limited (Filed as Exhibit 10.2 to SanDisk Corporation’s Quarterly Report on Form 10-Q (File No. 000-26734) with the Securities and Exchange Commission on November 8, 2006)#
|
|
|
Joint Venture Restructure Agreement, dated as of January 29, 2009, by and among SanDisk Corporation, SanDisk (Ireland) Limited, SanDisk (Cayman) Limited, Toshiba Corporation, Flash Partners Limited and Flash Alliance Limited (Filed as Exhibit 10.1 to SanDisk Corporation’s Quarterly Report on Form 10-Q (File No. 000-26734) with the Securities and Exchange Commission on May 7, 2009)#
|
|
|
New Y2 Facility Agreement, dated October 20, 2015, by and among SanDisk Corporation, SanDisk (Ireland) Limited, SanDisk (Cayman) Limited, SanDisk Flash B.V., Toshiba Corporation, Flash Partners Limited, Flash Alliance Limited and Flash Forward Limited (Filed as Exhibit 10.37 to SanDisk Corporation’s Annual Report on Form 10‑K (File No. 000-26734) with the Securities and Exchange Commission on February 12, 2016)#
|
|
|
FAL Commitment and Extension Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Ireland) Limited and Toshiba Memory Corporation (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 February 6, 2018)#
|
Exhibit
Number
|
|
Description
|
|
Y6 Facility Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Flash Partners, Ltd., Flash Alliance, Ltd., Flash Forward, Ltd. and Toshiba Memory Corporation (Filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)#
|
|
|
Confidential Settlement and Mutual Release Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Toshiba Corporation and Toshiba Memory Corporation (Filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)#
|
|
|
Confidential Settlement and Mutual Release Agreement, dated as of December 12, 2017, by and among Western Digital Corporation, SanDisk LLC, SanDisk (Cayman) Limited, SanDisk (Ireland) Limited, SanDisk Flash B.V., Bain Capital Private Equity, L.P., BCPE Pangea Cayman, L.P., BCPE Pangea Cayman2, Ltd., Bain Capital Fund XII, L.P., Bain Capital Asia Fund III, L.P. and K.K. Pangea (Filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q (File No. 1-08703) with the Securities and Exchange Commission on February 6, 2018)#
|
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges†
|
|
|
Subsidiaries of Western Digital Corporation†
|
|
|
Consent of Independent Registered Public Accounting Firm†
|
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
|
|
|
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**
|
|
|
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.
|
±
|
Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally copies of any of the omitted schedules upon request by the Securities and Exchange Commission.
|
#
|
Pursuant to a request for confidential treatment, certain portions of this exhibit have been redacted from the publicly filed document and have been furnished separately to the Securities and Exchange Commission as required by Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
Item 16.
|
Form 10‑K Summary
|
|
WESTERN DIGITAL CORPORATION
|
|
|
|
|
|
By:
|
/s/ MARK P. LONG
|
|
|
Mark P. Long
|
|
|
President WD Capital, Chief Strategy Officer and Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STEPHEN D. MILLIGAN
|
|
Chief Executive Officer, Director
(Principal Executive Officer) |
|
August 24, 2018
|
Stephen D. Milligan
|
|
|
|
|
|
|
|
|
|
/s/ MARK P. LONG
|
|
President WD Capital, Chief Strategy Officer and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
|
August 24, 2018
|
Mark P. Long
|
|
|
|
|
|
|
|
|
|
/s/ MATTHEW E. MASSENGILL
|
|
Chairman of the Board
|
|
August 24, 2018
|
Matthew E. Massengill
|
|
|
|
|
|
|
|
|
|
/s/ MARTIN I. COLE
|
|
Director
|
|
August 24, 2018
|
Martin I. Cole
|
|
|
|
|
|
|
|
|
|
/s/ KATHLEEN A. COTE
|
|
Director
|
|
August 24, 2018
|
Kathleen A. Cote
|
|
|
|
|
|
|
|
|
|
/s/ HENRY T. DENERO
|
|
Director
|
|
August 24, 2018
|
Henry T. DeNero
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL D. LAMBERT
|
|
Director
|
|
August 24, 2018
|
Michael D. Lambert
|
|
|
|
|
|
|
|
|
|
/s/ LEN J. LAUER
|
|
Director
|
|
August 24, 2018
|
Len J. Lauer
|
|
|
|
|
|
|
|
|
|
/s/ PAULA A. PRICE
|
|
Director
|
|
August 24, 2018
|
Paula A. Price
|
|
|
|
|
Named Executive Officer
|
|
Title
|
|
Current
Base Salary
|
||
Stephen D. Milligan
|
|
Chief Executive Officer
|
|
$
|
1,250,000
|
|
Michael D. Cordano
|
|
President and Chief Operating Officer
|
|
$
|
800,000
|
|
Mark P. Long
|
|
President WD Capital, Chief Strategy Officer and Chief Financial Officer
|
|
$
|
675,000
|
|
Martin R. Fink
|
|
Executive Vice President and Chief Technology Officer
|
|
$
|
600,000
|
|
Michael C. Ray
|
|
Executive Vice President, Chief Legal Officer and Secretary
|
|
$
|
575,000
|
|
Type of Fee
|
|
Current Annual
Retainer Fees |
||
Annual Retainer
|
|
$
|
75,000
|
|
Additional Non-Executive Chairman of Board Retainer
|
|
$
|
100,000
|
|
Additional Committee Retainers
|
|
|
||
Audit Committee
|
|
$
|
15,000
|
|
Compensation Committee
|
|
$
|
12,500
|
|
Governance Committee
|
|
$
|
10,000
|
|
Additional Committee Chairman Retainers
|
|
|
||
Audit Committee
|
|
$
|
25,000
|
|
Compensation Committee
|
|
$
|
22,500
|
|
Governance Committee
|
|
$
|
12,500
|
|
|
Fiscal Year
|
||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Computation of earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes
|
$
|
1,752
|
|
|
$
|
1,577
|
|
|
$
|
153
|
|
|
$
|
769
|
|
|
$
|
2,085
|
|
Fixed charges
|
75
|
|
|
69
|
|
|
285
|
|
|
871
|
|
|
692
|
|
|||||
Undistributed equity in income from 50%-or-less-owned affiliates
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|||||
Adjusted earnings
|
$
|
1,827
|
|
|
$
|
1,646
|
|
|
$
|
437
|
|
|
$
|
1,634
|
|
|
$
|
2,774
|
|
Computation of fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
56
|
|
|
$
|
49
|
|
|
$
|
266
|
|
|
$
|
847
|
|
|
$
|
676
|
|
Interest relating to lease guarantee of 50%-or-less-owned affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||
Estimated interest portion of operating lease expense
(1)
|
19
|
|
|
20
|
|
|
19
|
|
|
18
|
|
|
16
|
|
|||||
Fixed charges
|
$
|
75
|
|
|
$
|
69
|
|
|
$
|
285
|
|
|
$
|
871
|
|
|
$
|
692
|
|
Ratio of earnings to fixed charges
|
24.4
|
x
|
|
23.9
|
x
|
|
1.5
|
x
|
|
1.9
|
x
|
|
4.0
|
x
|
|
|
(1)
|
Interest is estimated at 33% of rental charges, which considers industry benchmarks and assumption of average debt service cost over the assumed life of the related property.
|
Name of Entity
|
|
State or Other Jurisdiction of Incorporation or Organization
|
Amplidata N.V.
|
|
Belgium
|
Amplidata, Inc.
|
|
Delaware
|
EasyStore Memory Limited
|
|
Ireland
|
Fabrik, LLC
|
|
Delaware
|
Fusion Multisystems Ltd.
|
|
Canada
|
Fusion-io (Beijing) Info Tech Co., Ltd
|
|
China
|
Fusion-io GmbH
|
|
Germany
|
Fusion-io Holdings S.A.R.L.
|
|
Luxembourg
|
Fusion-io Poland SP.Z.O.O.
|
|
Poland
|
Fusion-io Singapore Private Ltd
|
|
Singapore
|
Fusion-io LLC
|
|
Delaware
|
G-Tech LLC
|
|
California
|
HGSP Holdco Hong Kong Limited
|
|
Hong Kong
|
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 India Private Limited
|
|
India
|
HGST Technologies Malaysia Sdn. Bhd.
|
|
Malaysia
|
HGST, Inc.
|
|
Delaware
|
HICAP Properties Corp.
|
|
Philippines
|
Keen Personal Media, Inc.
|
|
Delaware
|
Pacifica Insurance Corporation
|
|
Hawaii
|
Prestadora SD, S. de R.L. de C.V.
|
|
Mexico
|
Read-Rite Philippines, Inc.
|
|
Philippines
|
Rising Silicon Inc.
|
|
Texas
|
Sandbox Expansion LLC
|
|
Delaware
|
SanDisk (Cayman) Limited
|
|
Cayman Islands
|
SanDisk (Ireland) Limited
|
|
Ireland
|
SanDisk 3D IP Holdings Ltd
|
|
Cayman Islands
|
SanDisk 3D LLC
|
|
Delaware
|
SanDisk B.V.
|
|
Netherlands
|
SanDisk Bermuda Limited
|
|
Bermuda
|
SanDisk Bermuda Unlimited
|
|
Bermuda
|
SanDisk BiCS IP Holdings Ltd
|
|
Cayman Islands
|
SanDisk Brasil Participações Ltda.
|
|
Brazil
|
Name of Entity
|
|
State or Other Jurisdiction of Incorporation or Organization
|
SanDisk C.V.
|
|
Netherlands
|
SanDisk China Limited
|
|
Ireland
|
SanDisk China LLC
|
|
Delaware
|
SanDisk Enterprise IP LLC
|
|
Texas
|
SanDisk Equipment Y.K.
|
|
Japan
|
SanDisk Flash B.V.
|
|
Netherlands
|
SanDisk France SAS
|
|
France
|
SanDisk G.K.
|
|
Japan
|
SanDisk GmbH
|
|
Germany
|
SanDisk Holding B.V.
|
|
Netherlands
|
SanDisk Holdings LLC
|
|
Delaware
|
SanDisk Hong Kong Limited
|
|
Hong Kong
|
SanDisk IL Ltd.
|
|
Israel
|
SanDisk India Device Design Centre Private Limited
|
|
India
|
SanDisk Information Technology (Shanghai) Co. Ltd.
|
|
China
|
SanDisk International Holdco B.V.
|
|
Netherlands
|
SanDisk International Limited
|
|
Ireland
|
SanDisk International Middle East FZE
|
|
United Arab Emirates
|
SanDisk Israel (Tefen) Ltd.
|
|
Israel
|
SanDisk Italy S.R.L.
|
|
Italy
|
SanDisk Korea Limited
|
|
Korea
|
SanDisk Latin America Holdings LLC
|
|
Delaware
|
SanDisk LLC
|
|
Delaware
|
SanDisk Malaysia Sdn. Bhd.
|
|
Malaysia
|
SanDisk Manufacturing Americas, LLC
|
|
Delaware
|
SanDisk Manufacturing Unlimited Company
|
|
Ireland
|
SanDisk Operations Holdings Limited
|
|
Ireland
|
SanDisk Pazarlama Ve Ticaret Limited Sirketi
|
|
Turkey
|
SanDisk Scotland, Limited
|
|
United Kingdom
|
SanDisk Semiconductor (Shanghai) Co. Ltd.
|
|
China
|
SanDisk Spain, S.L.U.
|
|
Spain
|
SanDisk Storage Malaysia Sdn. Bhd.
|
|
Malaysia
|
SanDisk Sweden AB
|
|
Sweden
|
SanDisk Switzerland Sarl
|
|
Switzerland
|
SanDisk Taiwan Limited
|
|
Taiwan
|
SanDisk Technologies LLC
|
|
Texas
|
SanDisk Trading (Shanghai) Co. Ltd.
|
|
China
|
SanDisk Trading Holdings Limited
|
|
Ireland
|
SanDisk UK, Limited
|
|
United Kingdom
|
SanDisk, Limited
|
|
Japan
|
SD International Holdings Ltd.
|
|
Cayman Islands
|
Shenzhen Hailiang Storage Products Co., Ltd.
|
|
China
|
Skyera, LLC
|
|
Delaware
|
Name of Entity
|
|
State or Other Jurisdiction of Incorporation or Organization
|
SMART Storage Systems GmbH
|
|
Austria
|
STEC Bermuda, LP
|
|
Bermuda
|
STEC Europe B.V.
|
|
Netherlands
|
STEC Germany GmbH
|
|
Germany
|
STEC Hong Kong Ltd.
|
|
Hong Kong
|
STEC International Holding, Inc.
|
|
California
|
STEC Italy SRL
|
|
Italy
|
STEC R&D Ltd.
|
|
Cayman Islands
|
Suntech Realty, Inc.
|
|
Philippines
|
Tegile Systems Private Limited
|
|
India
|
Virident Systems, LLC
|
|
Delaware
|
Virident Systems International Holdings Ltd.
|
|
Cayman Islands
|
Viviti Technologies Pte. Ltd.
|
|
Singapore
|
WD Media (Malaysia) Sdn.
|
|
Malaysia
|
WD Media (Singapore) Pte. Ltd.
|
|
Singapore
|
WD Media, LLC
|
|
Delaware
|
Western Digital (Argentina) S.A.
|
|
Argentina
|
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 Global, Ltd.
|
|
Cayman Islands
|
Western Digital Capital, LLC
|
|
Delaware
|
Western Digital Deutschland GmbH
|
|
Germany
|
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.
|
|
Korea
|
Western Digital Latin America, Inc.
|
|
Delaware
|
Western Digital Netherlands B.V.
|
|
Netherlands
|
Western Digital Taiwan Co., Ltd.
|
|
Taiwan
|
Western Digital Technologies, Inc.
|
|
Delaware
|
|
/s/ STEPHEN D. MILLIGAN
|
|
Stephen D. Milligan
|
|
Chief Executive Officer
|
|
/s/ MARK P. LONG
|
|
Mark P. Long
|
|
President WD Capital, Chief Strategy Officer and Chief Financial Officer
|
|
/s/ STEPHEN D. MILLIGAN
|
|
Stephen D. Milligan
|
|
Chief Executive Officer
|
|
/s/ MARK P. LONG
|
|
Mark P. Long
|
|
President WD Capital, Chief Strategy Officer and Chief Financial Officer
|