(Dollars in millions) | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | |||||||||
Available-for-sale securities: | ||||||||||||
Money market funds | $ | 1,203 | $ | — | $ | 1,203 | ||||||
Corporate bonds | 6 | — | 6 | |||||||||
Certificates of deposit | 867 | — | 867 | |||||||||
Total | $ | 2,076 | $ | — | $ | 2,076 | ||||||
Included in Cash and cash equivalents | $ | 2,063 | ||||||||||
Included in Short-term investments | 6 | |||||||||||
Included in Other current assets | 7 | |||||||||||
Total | $ | 2,076 |
(Dollars in millions) | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | |||||||||
Available-for-sale securities: | ||||||||||||
Money market funds | $ | 318 | $ | — | $ | 318 | ||||||
Corporate bonds | 6 | — | 6 | |||||||||
Certificates of deposit | 444 | — | 444 | |||||||||
Total | $ | 768 | $ | — | $ | 768 | ||||||
Included in Cash and cash equivalents | $ | 755 | ||||||||||
Included in Short-term investments | 6 | |||||||||||
Included in Other current assets | 7 | |||||||||||
Total | $ | 768 |
Fiscal Years | |||||||||||
2016 | 2015 | 2014 | |||||||||
Nonvested awards: | |||||||||||
Weighted-average fair value | $ | 41.47 | $ | 58.93 | $ | 41.18 | |||||
Performance awards: | |||||||||||
Weighted-average fair value | $ | 42.09 | $ | 59.51 | $ | 48.69 |
Fiscal Years | |||||||||||
2016 | 2015 | 2014 | |||||||||
Options | |||||||||||
Expected term (in years) | 2.1 - 4.2 | 4.2 | 4.2 | ||||||||
Volatility | 33 - 48% | 33 - 35% | 35 - 41% | ||||||||
Weighted-average volatility | 36 | % | 34 | % | 40 | % | |||||
Expected dividend rate | 4.6 - 11.0% | 2.9 - 4.0% | 3.1-3.8% | ||||||||
Weighted-average expected dividend rate | 5.6 | % | 3.0 | % | 3.7 | % | |||||
Risk-free interest rate | 0.6 - 1.5% | 1.1 - 1.5% | 1.2 - 1.4% | ||||||||
Weighted-average fair value | $ | 12.28 | $ | 12.98 | $ | 10.41 | |||||
ESPP | |||||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | ||||||||
Volatility | 28 - 46% | 28 - 29% | 34-36% | ||||||||
Weighted-average volatility | 39 | % | 28 | % | 35 | % | |||||
Expected dividend rate | 4.6 - 8.3% | 3.0 - 3.8% | 3.3-3.5% | ||||||||
Weighted-average expected dividend rate | 6.9 | % | 3.4 | % | 3.4 | % | |||||
Risk-free interest rate | 0.5 | % | 0.1 | % | 0.1 | % | |||||
Weighted-average fair value | $ | 9.08 | $ | 12.21 | $ | 10.46 | |||||
Performance restricted share awards subject to market condition | |||||||||||
Expected term (in years) | 3.00 | 3.00 | 3.00 | ||||||||
Weighted-average volatility | 30 | % | 40 | % | 46 | % | |||||
Expected dividend rate | 4.3 | % | 2.8 | % | 3.8 | % | |||||
Risk-free interest rate | 1.1 | % | 1.1 | % | 0.9 | % | |||||
Weighted-average fair value | $ | 47.34 | $ | 58.31 | $ | 37.51 |
(In millions) | Number of Shares Repurchased | Dollar Value of Shares Repurchased | ||||
Cumulative repurchased through June 28, 2013 | 244 | $ | 5,486 | |||
Repurchased in fiscal year 2014 | 41 | 1,912 | ||||
Cumulative repurchased through June 27, 2014 | 285 | 7,398 | ||||
Repurchased in fiscal year 2015 | 19 | 1,087 | ||||
Cumulative repurchased through July 3, 2015 | 304 | 8,485 | ||||
Repurchased in fiscal year 2016(a) | 24 | 1,146 | ||||
Cumulative repurchased through July 1, 2016 | 328 | $ | 9,631 |
(Dollars in millions) | Amount | |||
Cash and cash equivalents | $ | 40 | ||
Accounts receivable, net | 48 | |||
Inventories | 21 | |||
Other current and non-current assets | 7 | |||
Property, plant and equipment | 10 | |||
Intangible assets | 252 | |||
Goodwill | 364 | |||
Total assets | 742 | |||
Accounts payable, accrued expenses and other | (68 | ) | ||
Total liabilities | (68 | ) | ||
Total | $ | 674 |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 164 | 5.0 years | |||
Customer relationships | 71 | 7.0 years | ||||
Trade names | 3 | 5.0 years | ||||
Total amortizable intangible assets acquired | 238 | 5.5 years | ||||
In-process research and development | 14 | |||||
Total acquired identifiable intangible assets | $ | 252 |
(Dollars in millions) | Amount | |||
Inventories | $ | 37 | ||
Property, plant and equipment | 22 | |||
Intangible assets | 141 | |||
Other assets | 6 | |||
Goodwill | 337 | |||
Total assets | 543 | |||
Liabilities | (93 | ) | ||
Total liabilities | (93 | ) | ||
Total | $ | 450 |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 84 | 3.5 years | |||
Customer relationships | 40 | 3.8 years | ||||
Trade names | 17 | 4.5 years | ||||
Total acquired identifiable intangible assets | $ | 141 |
(Dollars in millions) | Amount | |||
Cash and cash equivalents | $ | 91 | ||
Accounts receivable, net | 67 | |||
Inventories | 111 | |||
Other current and non-current assets | 28 | |||
Property, plant and equipment | 55 | |||
Intangible assets | 80 | |||
Goodwill | 60 | |||
Total assets | 492 | |||
Accounts payable and accrued expenses | (116 | ) | ||
Total liabilities | (116 | ) | ||
Total | $ | 376 |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 23 | 5.5 years | |||
Customer relationships | 18 | 3.9 years | ||||
Total amortizable intangible assets acquired | 41 | 4.8 years | ||||
In-process research and development | 39 | |||||
Total acquired identifiable intangible assets | $ | 80 |
Fiscal Years Ending | Operating Leases | |||
(Dollars in millions) | ||||
2017 | $ | 27 | ||
2018 | 22 | |||
2019 | 16 | |||
2020 | 12 | |||
2021 | 9 | |||
Thereafter | 82 | |||
$ | 168 |
Fiscal Year | Amount | |||
2017 | $ | — | ||
2018 | — | |||
2019 | 800 | |||
2020 | — | |||
2021 | — | |||
Thereafter | 3,333 | |||
$ | 4,133 |
As of July 1, 2016 | ||||||||
(Dollars in millions) | Contracts Designated as Hedges | Contracts Not Designated as Hedges | ||||||
British Pound Sterling | $ | 47 | $ | 10 |
As of July 3, 2015 | ||||||||
(Dollars in millions) | Contracts Designated as Hedges | Contracts Not Designated as Hedges | ||||||
Thai Baht | $ | 18 | $ | 48 | ||||
Singapore Dollars | 23 | 42 | ||||||
Chinese Renminbi | 5 | 16 | ||||||
Euro | — | 13 | ||||||
British Pound Sterling | 35 | — | ||||||
Malaysian Ringgit | 12 | 15 | ||||||
$ | 93 | $ | 134 |
As of July 1, 2016 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
(Dollars in millions) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | — | Accrued expenses | $ | (2 | ) | |||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | — | Accrued expenses | (1 | ) | |||||||
Total return swap | Other current assets | 3 | Accrued expenses | — | ||||||||
Total derivatives | $ | 3 | $ | (3 | ) |
As of July 3, 2015 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
(Dollars in millions) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 2 | Accrued expenses | $ | (1 | ) | |||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | — | Accrued expenses | (3 | ) | |||||||
Total return swap | Other current assets | 1 | Accrued expenses | — | ||||||||
Total derivatives | $ | 3 | $ | (4 | ) |
(Dollars in millions) Derivatives Designated as Cash Flow Hedges | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) (a) | |||||||||||
Foreign currency forward exchange contracts | $ | (4 | ) | Cost of revenue | $ | (2 | ) | Cost of revenue | $ | — |
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||
Foreign currency forward exchange contracts | Other, net | $ | (5 | ) | ||
Total return swap | Operating expenses | $ | (1 | ) |
(a) | The amounts of gains or losses recognized in income related to the ineffective portion of the hedging relationships and to the amount excluded from the assessment of hedge effectiveness were immaterial for the fiscal year ended July 1, 2016. |
(Dollars in millions) Derivatives Designated as Cash Flow Hedges | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) (a) | |||||||||||
Foreign currency forward exchange contracts | $ | (11 | ) | Cost of revenue | $ | (13 | ) | Cost of revenue | $ | 1 |
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||
Foreign currency forward exchange contracts | Other, net | $ | (4 | ) | ||
Total return swap | Operating expenses | $ | — |
(a) | The amounts of gains or losses recognized in income related to the ineffective portion of the hedging relationships were immaterial for the fiscal year ended July 3, 2015. The amount of gains recognized in income related to the amount excluded from the assessment of hedge effectiveness was $1 million for the fiscal year ended July 3, 2015. |
Fiscal Years | |||||||||||
2016 | 2015 | 2014 | |||||||||
Nonvested awards: | |||||||||||
Weighted-average fair value | $ | 41.47 | $ | 58.93 | $ | 41.18 | |||||
Performance awards: | |||||||||||
Weighted-average fair value | $ | 42.09 | $ | 59.51 | $ | 48.69 |
Fiscal Years | |||||||||||
2016 | 2015 | 2014 | |||||||||
Options | |||||||||||
Expected term (in years) | 2.1 - 4.2 | 4.2 | 4.2 | ||||||||
Volatility | 33 - 48% | 33 - 35% | 35 - 41% | ||||||||
Weighted-average volatility | 36 | % | 34 | % | 40 | % | |||||
Expected dividend rate | 4.6 - 11.0% | 2.9 - 4.0% | 3.1-3.8% | ||||||||
Weighted-average expected dividend rate | 5.6 | % | 3.0 | % | 3.7 | % | |||||
Risk-free interest rate | 0.6 - 1.5% | 1.1 - 1.5% | 1.2 - 1.4% | ||||||||
Weighted-average fair value | $ | 12.28 | $ | 12.98 | $ | 10.41 | |||||
ESPP | |||||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | ||||||||
Volatility | 28 - 46% | 28 - 29% | 34-36% | ||||||||
Weighted-average volatility | 39 | % | 28 | % | 35 | % | |||||
Expected dividend rate | 4.6 - 8.3% | 3.0 - 3.8% | 3.3-3.5% | ||||||||
Weighted-average expected dividend rate | 6.9 | % | 3.4 | % | 3.4 | % | |||||
Risk-free interest rate | 0.5 | % | 0.1 | % | 0.1 | % | |||||
Weighted-average fair value | $ | 9.08 | $ | 12.21 | $ | 10.46 | |||||
Performance restricted share awards subject to market condition | |||||||||||
Expected term (in years) | 3.00 | 3.00 | 3.00 | ||||||||
Weighted-average volatility | 30 | % | 40 | % | 46 | % | |||||
Expected dividend rate | 4.3 | % | 2.8 | % | 3.8 | % | |||||
Risk-free interest rate | 1.1 | % | 1.1 | % | 0.9 | % | |||||
Weighted-average fair value | $ | 47.34 | $ | 58.31 | $ | 37.51 |
Options | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
(In millions) | (In years) | (Dollars In millions) | |||||||||||
Outstanding at July 3, 2015 | 4.9 | $ | 27.94 | 3.6 | $ | 110 | |||||||
Granted | 2.6 | $ | 35.86 | ||||||||||
Exercised | (1.5 | ) | $ | 8.32 | |||||||||
Forfeitures | (0.4 | ) | $ | 47.03 | |||||||||
Expirations | (0.2 | ) | 46.43 | ||||||||||
Outstanding at July 1, 2016 | 5.4 | $ | 34.91 | 4.6 | $ | 14 | |||||||
Vested and expected to vest at July 1, 2016 | 5.3 | $ | 34.93 | 4.6 | $ | 14 | |||||||
Exercisable at July 1, 2016 | 2.5 | $ | 27.46 | 3.2 | $ | 12 |
Nonvested Awards | Number of Shares | Weighted- Average Grant- Date Fair Value | |||||
(In millions) | |||||||
Nonvested at July 3, 2015 | 5.2 | $ | 39.73 | ||||
Granted | 2.4 | $ | 41.47 | ||||
Forfeitures | (0.7 | ) | $ | 45.04 | |||
Vested | (2.1 | ) | $ | 30.95 | |||
Nonvested at July 1, 2016 | 4.8 | $ | 39.95 |
Performance Awards | Number of Shares | Weighted- Average Grant- Date Fair Value | |||||
(In millions) | |||||||
Performance units at July 3, 2015 | 2.1 | $ | 61.12 | ||||
Granted | 0.6 | $ | 45.68 | ||||
Forfeitures | (0.2 | ) | $ | 53.99 | |||
Vested | (1.1 | ) | $ | 27.05 | |||
Performance units at July 1, 2016 | 1.4 | $ | 47.41 |
Fiscal Years Ended | |||||||||||
(In millions, except per share data) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Numerator: | |||||||||||
Net income attributable to Seagate Technology plc | $ | 248 | $ | 1,742 | $ | 1,570 | |||||
Number of shares used in per share calculations: | |||||||||||
Total shares for purposes of calculating basic net income per share attributable to Seagate Technology plc | 299 | 324 | 337 | ||||||||
Weighted-average effect of dilutive securities: | |||||||||||
Employee equity award plans | 3 | 7 | 10 | ||||||||
Total shares for purpose of calculating diluted net income per share attributable to Seagate Technology plc | 302 | 331 | 347 | ||||||||
Net income per share attributable to Seagate Technology plc shareholders: | |||||||||||
Basic | $ | 0.83 | $ | 5.38 | $ | 4.66 | |||||
Diluted | $ | 0.82 | $ | 5.26 | $ | 4.52 |
Fiscal Years Ended | ||||||||
(In millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||
Employee equity award plans | 3 | — | — |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 316 | $ | 439 | $ | — | $ | 755 | ||||||||
Short-term investments | — | 6 | — | 6 | ||||||||||||
Other current assets | 2 | 8 | — | 10 | ||||||||||||
Total assets | $ | 318 | $ | 453 | $ | — | $ | 771 | ||||||||
Liabilities: | ||||||||||||||||
Accrued expenses | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | ||||||
Total liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 1,201 | $ | 862 | $ | — | $ | 2,063 | ||||||||
Short-term investments | — | 6 | — | 6 | ||||||||||||
Other current assets | 2 | 8 | — | 10 | ||||||||||||
Total assets | $ | 1,203 | $ | 876 | $ | — | $ | 2,079 | ||||||||
Liabilities: | ||||||||||||||||
Accrued expenses | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) | ||||||
Total liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Money market funds | $ | 316 | $ | — | $ | — | $ | 316 | ||||||||
Certificates of deposit | — | 439 | — | 439 | ||||||||||||
Corporate bonds | — | 6 | — | 6 | ||||||||||||
Total cash equivalents and short-term investments | 316 | 445 | — | 761 | ||||||||||||
Restricted cash and investments: | ||||||||||||||||
Money market funds | 2 | — | — | 2 | ||||||||||||
Certificates of deposit | — | 5 | — | 5 | ||||||||||||
Derivative assets | — | 3 | — | 3 | ||||||||||||
Total assets | $ | 318 | $ | 453 | $ | — | $ | 771 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | ||||||
Total liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 316 | $ | 439 | $ | — | $ | 755 | ||||||||
Short-term investments | — | 6 | — | 6 | ||||||||||||
Other current assets | 2 | 8 | — | 10 | ||||||||||||
Total assets | $ | 318 | $ | 453 | $ | — | $ | 771 | ||||||||
Liabilities: | ||||||||||||||||
Accrued expenses | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | ||||||
Total liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Money market funds | $ | 1,201 | $ | — | $ | — | $ | 1,201 | ||||||||
Certificates of deposit | — | 862 | — | 862 | ||||||||||||
Corporate bonds | — | 6 | — | 6 | ||||||||||||
Total cash equivalents and short-term investments | 1,201 | 868 | — | 2,069 | ||||||||||||
Restricted Cash and Investments: | ||||||||||||||||
Money market funds | 2 | — | — | 2 | ||||||||||||
Other debt securities | — | 5 | — | 5 | ||||||||||||
Derivative assets | — | 3 | — | 3 | ||||||||||||
Total assets | $ | 1,203 | $ | 876 | $ | — | $ | 2,079 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) | ||||||
Total liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 1,201 | $ | 862 | $ | — | $ | 2,063 | ||||||||
Short-term investments | — | 6 | — | 6 | ||||||||||||
Other current assets | 2 | 8 | — | 10 | ||||||||||||
Total assets | $ | 1,203 | $ | 876 | $ | — | $ | 2,079 | ||||||||
Liabilities: | ||||||||||||||||
Accrued expenses | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) | ||||||
Total liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) |
July 1, 2016 | July 3, 2015 | |||||||||||||||
(Dollars in millions) | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
3.75% Senior Notes due November 2018 | $ | 800 | $ | 804 | $ | 800 | $ | 828 | ||||||||
7.00% Senior Notes due November 2021 | 158 | 164 | 158 | 170 | ||||||||||||
4.75% Senior Notes due June 2023 | 990 | 857 | 1,000 | 1,016 | ||||||||||||
4.75% Senior Notes due January 2025 | 995 | 795 | 1,000 | 995 | ||||||||||||
4.875% Senior Notes due June 2027 | 698 | 514 | 698 | 675 | ||||||||||||
5.75% Senior Notes due December 2034 | 489 | 357 | 499 | 491 | ||||||||||||
4,130 | 3,491 | 4,155 | 4,175 | |||||||||||||
Less short-term borrowings and current portion of long-term debt | — | — | — | — | ||||||||||||
Long-term debt, less current portion | $ | 4,130 | $ | 3,491 | $ | 4,155 | $ | 4,175 |
(Dollars in millions) | Amount | ||
As of June 27, 2014 | $ | 537 | |
Goodwill acquired | 339 | ||
Foreign currency translation effect | (2 | ) | |
As of July 3, 2015 | $ | 874 | |
Goodwill acquired | 364 | ||
Goodwill disposed | (1 | ) | |
Foreign currency translation effect | — | ||
As of July 1, 2016 | $ | 1,237 |
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life | ||||||||||
Existing technology | $ | 297 | $ | (79 | ) | $ | 218 | 4.1 years | ||||||
Customer relationships | 510 | (328 | ) | 182 | 3.2 years | |||||||||
Trade name | 29 | (14 | ) | 15 | 2.6 years | |||||||||
Other intangible assets | 29 | (10 | ) | 19 | 3.2 years | |||||||||
Total amortizable other intangible assets | $ | 865 | $ | (431 | ) | $ | 434 | 3.6 years |
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life | ||||||||||
Existing technology | $ | 191 | $ | (69 | ) | $ | 122 | 4.1 years | ||||||
Customer relationships | 487 | (282 | ) | 205 | 2.4 years | |||||||||
Trade name | 27 | (7 | ) | 20 | 3.2 years | |||||||||
Other intangible assets | 27 | (4 | ) | 23 | 4.2 years | |||||||||
Total amortizable other intangible assets | $ | 732 | $ | (362 | ) | $ | 370 | 3.1 years |
(Dollars in millions) | Amount | |||
2017 | $ | 166 | ||
2018 | 106 | |||
2019 | 68 | |||
2020 | 50 | |||
2021 | 23 | |||
Thereafter | 21 | |||
$ | 434 |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Current income tax expense (benefit): | |||||||||||
U.S. Federal | $ | 1 | $ | — | $ | (12 | ) | ||||
U.S. State | 2 | 4 | 3 | ||||||||
Non-U.S. | 25 | 222 | 62 | ||||||||
Total Current | 28 | 226 | 53 | ||||||||
Deferred income tax expense (benefit): | |||||||||||
U.S. Federal | — | (6 | ) | (43 | ) | ||||||
U.S. State | — | (2 | ) | 2 | |||||||
Non-U.S. | (2 | ) | 10 | (26 | ) | ||||||
Total Deferred | (2 | ) | 2 | (67 | ) | ||||||
Provision for (benefit from) income taxes | $ | 26 | $ | 228 | $ | (14 | ) |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
U.S. | $ | — | $ | 101 | $ | 149 | |||||
Non-U.S. | 274 | 1,869 | 1,407 | ||||||||
$ | 274 | $ | 1,970 | $ | 1,556 |
Fiscal Years Ended | |||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | |||||
Deferred tax assets | |||||||
Accrued warranty | $ | 74 | $ | 88 | |||
Inventory carrying value adjustments | 32 | 43 | |||||
Receivable allowance | 11 | 16 | |||||
Accrued compensation and benefits | 85 | 106 | |||||
Depreciation | 173 | 171 | |||||
Restructuring accruals | 14 | 4 | |||||
Other accruals and deferred items | 50 | 31 | |||||
Net operating losses and tax credit carry-forwards | 1,252 | 1,099 | |||||
Other assets | 2 | 5 | |||||
Total deferred tax assets | 1,693 | 1,563 | |||||
Valuation allowance | (984 | ) | (929 | ) | |||
Net deferred tax assets | 709 | 634 | |||||
Deferred tax liabilities | |||||||
Unremitted earnings of certain non-U.S. entities | (11 | ) | (6 | ) | |||
Acquisition-related items | (92 | ) | (15 | ) | |||
Other liabilities | — | (1 | ) | ||||
Total deferred tax liabilities | (103 | ) | (22 | ) | |||
Total net deferred tax assets | $ | 606 | $ | 612 | |||
As Reported on the Balance Sheet | |||||||
Current assets—deferred income taxes | $ | — | $ | 122 | |||
Non-current assets—deferred income taxes | 616 | 496 | |||||
Other non-current liabilities | (10 | ) | (6 | ) | |||
Total net deferred income taxes | $ | 606 | $ | 612 |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Provision at statutory rate | $ | 69 | $ | 493 | $ | 389 | |||||
Net U.S. federal and state income taxes | 3 | 7 | 3 | ||||||||
Permanent differences | 10 | 2 | 3 | ||||||||
Valuation allowance | (1 | ) | 15 | (100 | ) | ||||||
Non-U.S. losses with no tax benefits | 1 | 2 | 8 | ||||||||
Non-U.S. earnings taxed at less than statutory rate | (37 | ) | (463 | ) | (313 | ) | |||||
Audit assessment | — | 173 | — | ||||||||
Reversal of previously recorded taxes | (19 | ) | (5 | ) | (19 | ) | |||||
Other individually immaterial items | — | 4 | 15 | ||||||||
Provision for (benefit from) income taxes | $ | 26 | $ | 228 | $ | (14 | ) |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Balance of unrecognized tax benefits at the beginning of the year | $ | 83 | $ | 115 | $ | 157 | |||||
Gross increase for tax positions of prior years | 12 | 12 | 10 | ||||||||
Gross decrease for tax positions of prior years | (8 | ) | (4 | ) | (64 | ) | |||||
Gross increase for tax positions of current year | 11 | 9 | 13 | ||||||||
Gross decrease for tax positions of current year | — | — | — | ||||||||
Settlements | — | (45 | ) | — | |||||||
Lapse of statutes of limitation | (27 | ) | (3 | ) | (3 | ) | |||||
Non-U.S. exchange (gain)/loss | (1 | ) | (1 | ) | 2 | ||||||
Balance of unrecognized tax benefits at the end of the year | $ | 70 | $ | 83 | $ | 115 |
(Dollars in millions) | Amortized Cost | Fair Value | ||||||
Due in less than 1 year | $ | 767 | $ | 767 | ||||
Due in 1 to 5 years | 1 | 1 | ||||||
Due in 5 to 10 years | — | — | ||||||
Thereafter | — | — | ||||||
Total | $ | 768 | $ | 768 |
Fiscal Years Ending | Operating Leases | |||
(Dollars in millions) | ||||
2017 | $ | 27 | ||
2018 | 22 | |||
2019 | 16 | |||
2020 | 12 | |||
2021 | 9 | |||
Thereafter | 82 | |||
$ | 168 |
Fiscal Years Ended | ||||||||||||
(In millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||||||
Balance, beginning of period | $ | 248 | $ | 273 | $ | 320 | ||||||
Warranties issued | 125 | 147 | 177 | |||||||||
Repairs and replacements | (152 | ) | (187 | ) | (228 | ) | ||||||
Changes in liability for pre-existing warranties, including expirations | (17 | ) | 7 | 1 | ||||||||
Warranty liability assumed from acquisitions | 2 | 8 | 3 | |||||||||
Balance, end of period | $ | 206 | $ | 248 | $ | 273 |
(Dollars in millions) | Useful Life in Years | July 1, 2016 | July 3, 2015 | |||||||
Land and land improvements | $ | 69 | $ | 48 | ||||||
Equipment | 3 – 5 | 7,681 | 7,440 | |||||||
Buildings and leasehold improvements | Up to 48 | 1,900 | 1,595 | |||||||
Construction in progress | 234 | 547 | ||||||||
9,884 | 9,630 | |||||||||
Less: accumulated depreciation and amortization | (7,724 | ) | (7,352 | ) | ||||||
$ | 2,160 | $ | 2,278 |
(Dollars in millions) | Post- Employment Benefits | Operating Leases | Other Exit Costs | Total | ||||||||||||
All Restructuring Activities | ||||||||||||||||
Accrual balances at June 28, 2013 | $ | 2 | $ | 15 | $ | — | $ | 17 | ||||||||
Restructuring charges | 18 | 3 | 2 | 23 | ||||||||||||
Cash payments | (20 | ) | (5 | ) | (2 | ) | (27 | ) | ||||||||
Adjustments | 2 | (1 | ) | — | 1 | |||||||||||
Accrual balances at June 27, 2014 | 2 | 12 | — | 14 | ||||||||||||
Restructuring charges | 23 | 3 | 4 | 30 | ||||||||||||
Cash payments | (17 | ) | (6 | ) | (4 | ) | (27 | ) | ||||||||
Adjustments | 3 | (1 | ) | — | 2 | |||||||||||
Accrual balances at July 3, 2015 | 11 | 8 | — | 19 | ||||||||||||
Restructuring charges | 151 | 14 | 10 | 175 | ||||||||||||
Cash payments | (113 | ) | (8 | ) | (10 | ) | (131 | ) | ||||||||
Adjustments | 1 | (1 | ) | — | — | |||||||||||
Accrual balances at July 1, 2016 | $ | 50 | $ | 13 | $ | — | $ | 63 |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Accounts receivable | $ | 1,327 | $ | 1,744 | ||||
Allowance for doubtful accounts | (9 | ) | (9 | ) | ||||
$ | 1,318 | $ | 1,735 |
(Dollars in millions) | Unrealized Gains (Losses) on Cash Flow Hedges | Unrealized Gains (Losses) on Marketable Securities (a) | Unrealized Gains (Losses) on Post- Retirement Plans | Foreign Currency Translation Adjustments | Total | |||||||||||||||
Balance at June 27, 2014 | $ | (1 | ) | $ | — | $ | (10 | ) | $ | 9 | $ | (2 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (11 | ) | — | (5 | ) | (25 | ) | (41 | ) | |||||||||||
Amounts reclassified from AOCI | 13 | — | — | — | 13 | |||||||||||||||
Other comprehensive income (loss) | 2 | — | (5 | ) | (25 | ) | (28 | ) | ||||||||||||
Balance at July 3, 2015 | 1 | — | (15 | ) | (16 | ) | (30 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | (4 | ) | — | 8 | (1 | ) | 3 | |||||||||||||
Amounts reclassified from AOCI | 2 | — | — | — | 2 | |||||||||||||||
Other comprehensive income (loss) | (2 | ) | — | 8 | (1 | ) | 5 | |||||||||||||
Balance at July 1, 2016 | $ | (1 | ) | $ | — | $ | (7 | ) | $ | (17 | ) | $ | (25 | ) |
(a) | The cost of a security sold or the amount reclassified out of AOCI into earnings was determined using the specific identification method. |
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life | ||||||||||
Existing technology | $ | 297 | $ | (79 | ) | $ | 218 | 4.1 years | ||||||
Customer relationships | 510 | (328 | ) | 182 | 3.2 years | |||||||||
Trade name | 29 | (14 | ) | 15 | 2.6 years | |||||||||
Other intangible assets | 29 | (10 | ) | 19 | 3.2 years | |||||||||
Total amortizable other intangible assets | $ | 865 | $ | (431 | ) | $ | 434 | 3.6 years |
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life | ||||||||||
Existing technology | $ | 191 | $ | (69 | ) | $ | 122 | 4.1 years | ||||||
Customer relationships | 487 | (282 | ) | 205 | 2.4 years | |||||||||
Trade name | 27 | (7 | ) | 20 | 3.2 years | |||||||||
Other intangible assets | 27 | (4 | ) | 23 | 4.2 years | |||||||||
Total amortizable other intangible assets | $ | 732 | $ | (362 | ) | $ | 370 | 3.1 years |
Fiscal Years Ended | ||||||||
(In millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||
Employee equity award plans | 3 | — | — |
(Dollars in millions) | Amount | |||
Inventories | $ | 37 | ||
Property, plant and equipment | 22 | |||
Intangible assets | 141 | |||
Other assets | 6 | |||
Goodwill | 337 | |||
Total assets | 543 | |||
Liabilities | (93 | ) | ||
Total liabilities | (93 | ) | ||
Total | $ | 450 |
(Dollars in millions) | Amount | |||
Cash and cash equivalents | $ | 91 | ||
Accounts receivable, net | 67 | |||
Inventories | 111 | |||
Other current and non-current assets | 28 | |||
Property, plant and equipment | 55 | |||
Intangible assets | 80 | |||
Goodwill | 60 | |||
Total assets | 492 | |||
Accounts payable and accrued expenses | (116 | ) | ||
Total liabilities | (116 | ) | ||
Total | $ | 376 |
(Dollars in millions) | Amount | |||
Cash and cash equivalents | $ | 40 | ||
Accounts receivable, net | 48 | |||
Inventories | 21 | |||
Other current and non-current assets | 7 | |||
Property, plant and equipment | 10 | |||
Intangible assets | 252 | |||
Goodwill | 364 | |||
Total assets | 742 | |||
Accounts payable, accrued expenses and other | (68 | ) | ||
Total liabilities | (68 | ) | ||
Total | $ | 674 |
July 1, 2016 | July 3, 2015 | |||||||||||||||
(Dollars in millions) | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
3.75% Senior Notes due November 2018 | $ | 800 | $ | 804 | $ | 800 | $ | 828 | ||||||||
7.00% Senior Notes due November 2021 | 158 | 164 | 158 | 170 | ||||||||||||
4.75% Senior Notes due June 2023 | 990 | 857 | 1,000 | 1,016 | ||||||||||||
4.75% Senior Notes due January 2025 | 995 | 795 | 1,000 | 995 | ||||||||||||
4.875% Senior Notes due June 2027 | 698 | 514 | 698 | 675 | ||||||||||||
5.75% Senior Notes due December 2034 | 489 | 357 | 499 | 491 | ||||||||||||
4,130 | 3,491 | 4,155 | 4,175 | |||||||||||||
Less short-term borrowings and current portion of long-term debt | — | — | — | — | ||||||||||||
Long-term debt, less current portion | $ | 4,130 | $ | 3,491 | $ | 4,155 | $ | 4,175 |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Current income tax expense (benefit): | |||||||||||
U.S. Federal | $ | 1 | $ | — | $ | (12 | ) | ||||
U.S. State | 2 | 4 | 3 | ||||||||
Non-U.S. | 25 | 222 | 62 | ||||||||
Total Current | 28 | 226 | 53 | ||||||||
Deferred income tax expense (benefit): | |||||||||||
U.S. Federal | — | (6 | ) | (43 | ) | ||||||
U.S. State | — | (2 | ) | 2 | |||||||
Non-U.S. | (2 | ) | 10 | (26 | ) | ||||||
Total Deferred | (2 | ) | 2 | (67 | ) | ||||||
Provision for (benefit from) income taxes | $ | 26 | $ | 228 | $ | (14 | ) |
Fiscal Years Ended | |||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | |||||
Deferred tax assets | |||||||
Accrued warranty | $ | 74 | $ | 88 | |||
Inventory carrying value adjustments | 32 | 43 | |||||
Receivable allowance | 11 | 16 | |||||
Accrued compensation and benefits | 85 | 106 | |||||
Depreciation | 173 | 171 | |||||
Restructuring accruals | 14 | 4 | |||||
Other accruals and deferred items | 50 | 31 | |||||
Net operating losses and tax credit carry-forwards | 1,252 | 1,099 | |||||
Other assets | 2 | 5 | |||||
Total deferred tax assets | 1,693 | 1,563 | |||||
Valuation allowance | (984 | ) | (929 | ) | |||
Net deferred tax assets | 709 | 634 | |||||
Deferred tax liabilities | |||||||
Unremitted earnings of certain non-U.S. entities | (11 | ) | (6 | ) | |||
Acquisition-related items | (92 | ) | (15 | ) | |||
Other liabilities | — | (1 | ) | ||||
Total deferred tax liabilities | (103 | ) | (22 | ) | |||
Total net deferred tax assets | $ | 606 | $ | 612 | |||
As Reported on the Balance Sheet | |||||||
Current assets—deferred income taxes | $ | — | $ | 122 | |||
Non-current assets—deferred income taxes | 616 | 496 | |||||
Other non-current liabilities | (10 | ) | (6 | ) | |||
Total net deferred income taxes | $ | 606 | $ | 612 |
(Dollars in millions) Derivatives Designated as Cash Flow Hedges | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) (a) | |||||||||||
Foreign currency forward exchange contracts | $ | (4 | ) | Cost of revenue | $ | (2 | ) | Cost of revenue | $ | — |
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||
Foreign currency forward exchange contracts | Other, net | $ | (5 | ) | ||
Total return swap | Operating expenses | $ | (1 | ) |
(a) | The amounts of gains or losses recognized in income related to the ineffective portion of the hedging relationships and to the amount excluded from the assessment of hedge effectiveness were immaterial for the fiscal year ended July 1, 2016. |
(Dollars in millions) Derivatives Designated as Cash Flow Hedges | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) (a) | |||||||||||
Foreign currency forward exchange contracts | $ | (11 | ) | Cost of revenue | $ | (13 | ) | Cost of revenue | $ | 1 |
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||
Foreign currency forward exchange contracts | Other, net | $ | (4 | ) | ||
Total return swap | Operating expenses | $ | — |
(a) | The amounts of gains or losses recognized in income related to the ineffective portion of the hedging relationships were immaterial for the fiscal year ended July 3, 2015. The amount of gains recognized in income related to the amount excluded from the assessment of hedge effectiveness was $1 million for the fiscal year ended July 3, 2015. |
As of July 1, 2016 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
(Dollars in millions) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | — | Accrued expenses | $ | (2 | ) | |||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | — | Accrued expenses | (1 | ) | |||||||
Total return swap | Other current assets | 3 | Accrued expenses | — | ||||||||
Total derivatives | $ | 3 | $ | (3 | ) |
As of July 3, 2015 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
(Dollars in millions) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | $ | 2 | Accrued expenses | $ | (1 | ) | |||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency forward exchange contracts | Other current assets | — | Accrued expenses | (3 | ) | |||||||
Total return swap | Other current assets | 1 | Accrued expenses | — | ||||||||
Total derivatives | $ | 3 | $ | (4 | ) |
Fiscal Years Ended | |||||||||||
(In millions, except per share data) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Numerator: | |||||||||||
Net income attributable to Seagate Technology plc | $ | 248 | $ | 1,742 | $ | 1,570 | |||||
Number of shares used in per share calculations: | |||||||||||
Total shares for purposes of calculating basic net income per share attributable to Seagate Technology plc | 299 | 324 | 337 | ||||||||
Weighted-average effect of dilutive securities: | |||||||||||
Employee equity award plans | 3 | 7 | 10 | ||||||||
Total shares for purpose of calculating diluted net income per share attributable to Seagate Technology plc | 302 | 331 | 347 | ||||||||
Net income per share attributable to Seagate Technology plc shareholders: | |||||||||||
Basic | $ | 0.83 | $ | 5.38 | $ | 4.66 | |||||
Diluted | $ | 0.82 | $ | 5.26 | $ | 4.52 |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Provision at statutory rate | $ | 69 | $ | 493 | $ | 389 | |||||
Net U.S. federal and state income taxes | 3 | 7 | 3 | ||||||||
Permanent differences | 10 | 2 | 3 | ||||||||
Valuation allowance | (1 | ) | 15 | (100 | ) | ||||||
Non-U.S. losses with no tax benefits | 1 | 2 | 8 | ||||||||
Non-U.S. earnings taxed at less than statutory rate | (37 | ) | (463 | ) | (313 | ) | |||||
Audit assessment | — | 173 | — | ||||||||
Reversal of previously recorded taxes | (19 | ) | (5 | ) | (19 | ) | |||||
Other individually immaterial items | — | 4 | 15 | ||||||||
Provision for (benefit from) income taxes | $ | 26 | $ | 228 | $ | (14 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Money market funds | $ | 1,201 | $ | — | $ | — | $ | 1,201 | ||||||||
Certificates of deposit | — | 862 | — | 862 | ||||||||||||
Corporate bonds | — | 6 | — | 6 | ||||||||||||
Total cash equivalents and short-term investments | 1,201 | 868 | — | 2,069 | ||||||||||||
Restricted Cash and Investments: | ||||||||||||||||
Money market funds | 2 | — | — | 2 | ||||||||||||
Other debt securities | — | 5 | — | 5 | ||||||||||||
Derivative assets | — | 3 | — | 3 | ||||||||||||
Total assets | $ | 1,203 | $ | 876 | $ | — | $ | 2,079 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) | ||||||
Total liabilities | $ | — | $ | (4 | ) | $ | — | $ | (4 | ) |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(Dollars in millions) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Balance | ||||||||||||
Assets: | ||||||||||||||||
Money market funds | $ | 316 | $ | — | $ | — | $ | 316 | ||||||||
Certificates of deposit | — | 439 | — | 439 | ||||||||||||
Corporate bonds | — | 6 | — | 6 | ||||||||||||
Total cash equivalents and short-term investments | 316 | 445 | — | 761 | ||||||||||||
Restricted cash and investments: | ||||||||||||||||
Money market funds | 2 | — | — | 2 | ||||||||||||
Certificates of deposit | — | 5 | — | 5 | ||||||||||||
Derivative assets | — | 3 | — | 3 | ||||||||||||
Total assets | $ | 318 | $ | 453 | $ | — | $ | 771 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | ||||||
Total liabilities | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 164 | 5.0 years | |||
Customer relationships | 71 | 7.0 years | ||||
Trade names | 3 | 5.0 years | ||||
Total amortizable intangible assets acquired | 238 | 5.5 years | ||||
In-process research and development | 14 | |||||
Total acquired identifiable intangible assets | $ | 252 |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 23 | 5.5 years | |||
Customer relationships | 18 | 3.9 years | ||||
Total amortizable intangible assets acquired | 41 | 4.8 years | ||||
In-process research and development | 39 | |||||
Total acquired identifiable intangible assets | $ | 80 |
(Dollars in millions) | Fair Value | Weighted- Average Amortization Period | ||||
Existing technology | $ | 84 | 3.5 years | |||
Customer relationships | 40 | 3.8 years | ||||
Trade names | 17 | 4.5 years | ||||
Total acquired identifiable intangible assets | $ | 141 |
(Dollars in millions) | Amount | ||
As of June 27, 2014 | $ | 537 | |
Goodwill acquired | 339 | ||
Foreign currency translation effect | (2 | ) | |
As of July 3, 2015 | $ | 874 | |
Goodwill acquired | 364 | ||
Goodwill disposed | (1 | ) | |
Foreign currency translation effect | — | ||
As of July 1, 2016 | $ | 1,237 |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
U.S. | $ | — | $ | 101 | $ | 149 | |||||
Non-U.S. | 274 | 1,869 | 1,407 | ||||||||
$ | 274 | $ | 1,970 | $ | 1,556 |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Raw materials and components | $ | 307 | $ | 352 | ||||
Work-in-process | 297 | 239 | ||||||
Finished goods | 264 | 402 | ||||||
$ | 868 | $ | 993 |
Fiscal Year | Amount | |||
2017 | $ | — | ||
2018 | — | |||
2019 | 800 | |||
2020 | — | |||
2021 | — | |||
Thereafter | 3,333 | |||
$ | 4,133 |
Performance Awards | Number of Shares | Weighted- Average Grant- Date Fair Value | |||||
(In millions) | |||||||
Performance units at July 3, 2015 | 2.1 | $ | 61.12 | ||||
Granted | 0.6 | $ | 45.68 | ||||
Forfeitures | (0.2 | ) | $ | 53.99 | |||
Vested | (1.1 | ) | $ | 27.05 | |||
Performance units at July 1, 2016 | 1.4 | $ | 47.41 |
Nonvested Awards | Number of Shares | Weighted- Average Grant- Date Fair Value | |||||
(In millions) | |||||||
Nonvested at July 3, 2015 | 5.2 | $ | 39.73 | ||||
Granted | 2.4 | $ | 41.47 | ||||
Forfeitures | (0.7 | ) | $ | 45.04 | |||
Vested | (2.1 | ) | $ | 30.95 | |||
Nonvested at July 1, 2016 | 4.8 | $ | 39.95 |
As of July 1, 2016 | ||||||||
(Dollars in millions) | Contracts Designated as Hedges | Contracts Not Designated as Hedges | ||||||
British Pound Sterling | $ | 47 | $ | 10 |
As of July 3, 2015 | ||||||||
(Dollars in millions) | Contracts Designated as Hedges | Contracts Not Designated as Hedges | ||||||
Thai Baht | $ | 18 | $ | 48 | ||||
Singapore Dollars | 23 | 42 | ||||||
Chinese Renminbi | 5 | 16 | ||||||
Euro | — | 13 | ||||||
British Pound Sterling | 35 | — | ||||||
Malaysian Ringgit | 12 | 15 | ||||||
$ | 93 | $ | 134 |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Vendor non-trade receivables | $ | 66 | $ | 66 | ||||
Other | 150 | 167 | ||||||
$ | 216 | $ | 233 |
Fiscal Years Ended | ||||||||||||
(In millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||||||
Balance, beginning of period | $ | 248 | $ | 273 | $ | 320 | ||||||
Warranties issued | 125 | 147 | 177 | |||||||||
Repairs and replacements | (152 | ) | (187 | ) | (228 | ) | ||||||
Changes in liability for pre-existing warranties, including expirations | (17 | ) | 7 | 1 | ||||||||
Warranty liability assumed from acquisitions | 2 | 8 | 3 | |||||||||
Balance, end of period | $ | 206 | $ | 248 | $ | 273 |
(Dollars in millions) | Post- Employment Benefits | Operating Leases | Other Exit Costs | Total | ||||||||||||
All Restructuring Activities | ||||||||||||||||
Accrual balances at June 28, 2013 | $ | 2 | $ | 15 | $ | — | $ | 17 | ||||||||
Restructuring charges | 18 | 3 | 2 | 23 | ||||||||||||
Cash payments | (20 | ) | (5 | ) | (2 | ) | (27 | ) | ||||||||
Adjustments | 2 | (1 | ) | — | 1 | |||||||||||
Accrual balances at June 27, 2014 | 2 | 12 | — | 14 | ||||||||||||
Restructuring charges | 23 | 3 | 4 | 30 | ||||||||||||
Cash payments | (17 | ) | (6 | ) | (4 | ) | (27 | ) | ||||||||
Adjustments | 3 | (1 | ) | — | 2 | |||||||||||
Accrual balances at July 3, 2015 | 11 | 8 | — | 19 | ||||||||||||
Restructuring charges | 151 | 14 | 10 | 175 | ||||||||||||
Cash payments | (113 | ) | (8 | ) | (10 | ) | (131 | ) | ||||||||
Adjustments | 1 | (1 | ) | — | — | |||||||||||
Accrual balances at July 1, 2016 | $ | 50 | $ | 13 | $ | — | $ | 63 |
Fiscal Years Ended | ||||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||||||
Revenue from external customers (a): | ||||||||||||
Singapore | $ | 5,354 | $ | 6,844 | $ | 6,828 | ||||||
United States | 3,376 | 3,929 | 3,679 | |||||||||
The Netherlands | 1,813 | 2,291 | 2,652 | |||||||||
Other | 617 | 675 | 565 | |||||||||
Consolidated | $ | 11,160 | $ | 13,739 | $ | 13,724 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 1,029 | $ | 725 | $ | 500 | ||||||
Singapore | 726 | 900 | 788 | |||||||||
Thailand | 349 | 328 | 398 | |||||||||
Malaysia | 201 | 248 | 146 | |||||||||
China | 115 | 138 | 167 | |||||||||
Other | 444 | 568 | 680 | |||||||||
Consolidated | $ | 2,864 | $ | 2,907 | $ | 2,679 |
(a) | Revenue is attributed to countries based on the shipping location. |
Options | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
(In millions) | (In years) | (Dollars In millions) | |||||||||||
Outstanding at July 3, 2015 | 4.9 | $ | 27.94 | 3.6 | $ | 110 | |||||||
Granted | 2.6 | $ | 35.86 | ||||||||||
Exercised | (1.5 | ) | $ | 8.32 | |||||||||
Forfeitures | (0.4 | ) | $ | 47.03 | |||||||||
Expirations | (0.2 | ) | 46.43 | ||||||||||
Outstanding at July 1, 2016 | 5.4 | $ | 34.91 | 4.6 | $ | 14 | |||||||
Vested and expected to vest at July 1, 2016 | 5.3 | $ | 34.93 | 4.6 | $ | 14 | |||||||
Exercisable at July 1, 2016 | 2.5 | $ | 27.46 | 3.2 | $ | 12 |
(Dollars in millions) | Balance at Beginning of Period | Charges (Credit) to Operations | Deductions (a) | Balance at End of Period | ||||||||||
Fiscal year ended June 27, 2014 | $ | 8 | 4 | — | $ | 12 | ||||||||
Fiscal year ended July 3, 2015 | $ | 12 | — | (3 | ) | $ | 9 | |||||||
Fiscal year ended July 1, 2016 | $ | 9 | 1 | (1 | ) | $ | 9 |
(a) | Uncollectible accounts written off, net of recoveries. |
(Dollars in millions) | Amount | |||
2017 | $ | 166 | ||
2018 | 106 | |||
2019 | 68 | |||
2020 | 50 | |||
2021 | 23 | |||
Thereafter | 21 | |||
$ | 434 |
Fiscal Years Ended | ||||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | |||||||||
Revenue from external customers (a): | ||||||||||||
Singapore | $ | 5,354 | $ | 6,844 | $ | 6,828 | ||||||
United States | 3,376 | 3,929 | 3,679 | |||||||||
The Netherlands | 1,813 | 2,291 | 2,652 | |||||||||
Other | 617 | 675 | 565 | |||||||||
Consolidated | $ | 11,160 | $ | 13,739 | $ | 13,724 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 1,029 | $ | 725 | $ | 500 | ||||||
Singapore | 726 | 900 | 788 | |||||||||
Thailand | 349 | 328 | 398 | |||||||||
Malaysia | 201 | 248 | 146 | |||||||||
China | 115 | 138 | 167 | |||||||||
Other | 444 | 568 | 680 | |||||||||
Consolidated | $ | 2,864 | $ | 2,907 | $ | 2,679 |
(a) | Revenue is attributed to countries based on the shipping location. |
(In millions) | Number of Shares Repurchased | Dollar Value of Shares Repurchased | ||||
Cumulative repurchased through June 28, 2013 | 244 | $ | 5,486 | |||
Repurchased in fiscal year 2014 | 41 | 1,912 | ||||
Cumulative repurchased through June 27, 2014 | 285 | 7,398 | ||||
Repurchased in fiscal year 2015 | 19 | 1,087 | ||||
Cumulative repurchased through July 3, 2015 | 304 | 8,485 | ||||
Repurchased in fiscal year 2016(a) | 24 | 1,146 | ||||
Cumulative repurchased through July 1, 2016 | 328 | $ | 9,631 |
(a) | Including net share settlement of $56 million for 1 million shares in connection with tax withholding related to vesting of restricted stock units. |
Fiscal Years Ended | |||||||||||
(Dollars in millions) | July 1, 2016 | July 3, 2015 | June 27, 2014 | ||||||||
Balance of unrecognized tax benefits at the beginning of the year | $ | 83 | $ | 115 | $ | 157 | |||||
Gross increase for tax positions of prior years | 12 | 12 | 10 | ||||||||
Gross decrease for tax positions of prior years | (8 | ) | (4 | ) | (64 | ) | |||||
Gross increase for tax positions of current year | 11 | 9 | 13 | ||||||||
Gross decrease for tax positions of current year | — | — | — | ||||||||
Settlements | — | (45 | ) | — | |||||||
Lapse of statutes of limitation | (27 | ) | (3 | ) | (3 | ) | |||||
Non-U.S. exchange (gain)/loss | (1 | ) | (1 | ) | 2 | ||||||
Balance of unrecognized tax benefits at the end of the year | $ | 70 | $ | 83 | $ | 115 |
(Dollars in millions) | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | |||||||||
Available-for-sale securities: | ||||||||||||
Money market funds | $ | 318 | $ | — | $ | 318 | ||||||
Corporate bonds | 6 | — | 6 | |||||||||
Certificates of deposit | 444 | — | 444 | |||||||||
Total | $ | 768 | $ | — | $ | 768 | ||||||
Included in Cash and cash equivalents | $ | 755 | ||||||||||
Included in Short-term investments | 6 | |||||||||||
Included in Other current assets | 7 | |||||||||||
Total | $ | 768 |
(Dollars in millions) | Amortized Cost | Fair Value | ||||||
Due in less than 1 year | $ | 767 | $ | 767 | ||||
Due in 1 to 5 years | 1 | 1 | ||||||
Due in 5 to 10 years | — | — | ||||||
Thereafter | — | — | ||||||
Total | $ | 768 | $ | 768 |
(Dollars in millions) | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | |||||||||
Available-for-sale securities: | ||||||||||||
Money market funds | $ | 1,203 | $ | — | $ | 1,203 | ||||||
Corporate bonds | 6 | — | 6 | |||||||||
Certificates of deposit | 867 | — | 867 | |||||||||
Total | $ | 2,076 | $ | — | $ | 2,076 | ||||||
Included in Cash and cash equivalents | $ | 2,063 | ||||||||||
Included in Short-term investments | 6 | |||||||||||
Included in Other current assets | 7 | |||||||||||
Total | $ | 2,076 |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Accounts receivable | $ | 1,327 | $ | 1,744 | ||||
Allowance for doubtful accounts | (9 | ) | (9 | ) | ||||
$ | 1,318 | $ | 1,735 |
(Dollars in millions) | Balance at Beginning of Period | Charges (Credit) to Operations | Deductions (a) | Balance at End of Period | ||||||||||
Fiscal year ended June 27, 2014 | $ | 8 | 4 | — | $ | 12 | ||||||||
Fiscal year ended July 3, 2015 | $ | 12 | — | (3 | ) | $ | 9 | |||||||
Fiscal year ended July 1, 2016 | $ | 9 | 1 | (1 | ) | $ | 9 |
(a) | Uncollectible accounts written off, net of recoveries. |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Raw materials and components | $ | 307 | $ | 352 | ||||
Work-in-process | 297 | 239 | ||||||
Finished goods | 264 | 402 | ||||||
$ | 868 | $ | 993 |
(Dollars in millions) | July 1, 2016 | July 3, 2015 | ||||||
Vendor non-trade receivables | $ | 66 | $ | 66 | ||||
Other | 150 | 167 | ||||||
$ | 216 | $ | 233 |
(Dollars in millions) | Useful Life in Years | July 1, 2016 | July 3, 2015 | |||||||
Land and land improvements | $ | 69 | $ | 48 | ||||||
Equipment | 3 – 5 | 7,681 | 7,440 | |||||||
Buildings and leasehold improvements | Up to 48 | 1,900 | 1,595 | |||||||
Construction in progress | 234 | 547 | ||||||||
9,884 | 9,630 | |||||||||
Less: accumulated depreciation and amortization | (7,724 | ) | (7,352 | ) | ||||||
$ | 2,160 | $ | 2,278 |
(Dollars in millions) | Unrealized Gains (Losses) on Cash Flow Hedges | Unrealized Gains (Losses) on Marketable Securities (a) | Unrealized Gains (Losses) on Post- Retirement Plans | Foreign Currency Translation Adjustments | Total | |||||||||||||||
Balance at June 27, 2014 | $ | (1 | ) | $ | — | $ | (10 | ) | $ | 9 | $ | (2 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (11 | ) | — | (5 | ) | (25 | ) | (41 | ) | |||||||||||
Amounts reclassified from AOCI | 13 | — | — | — | 13 | |||||||||||||||
Other comprehensive income (loss) | 2 | — | (5 | ) | (25 | ) | (28 | ) | ||||||||||||
Balance at July 3, 2015 | 1 | — | (15 | ) | (16 | ) | (30 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | (4 | ) | — | 8 | (1 | ) | 3 | |||||||||||||
Amounts reclassified from AOCI | 2 | — | — | — | 2 | |||||||||||||||
Other comprehensive income (loss) | (2 | ) | — | 8 | (1 | ) | 5 | |||||||||||||
Balance at July 1, 2016 | $ | (1 | ) | $ | — | $ | (7 | ) | $ | (17 | ) | $ | (25 | ) |
(a) | The cost of a security sold or the amount reclassified out of AOCI into earnings was determined using the specific identification method. |