UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

____________________________

FORM 10-Q

___________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~April 2,~~December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission File Number 001-31560

_______________________________________

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

_______________________________________


Ireland						~~98-0648577~~98-1597419
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification Number)

38/39 Fitzwilliam Square

Dublin 2, Ireland

(Address of principal executive offices)

D02 NX53

(Zip Code)

Telephone: (353) (1) 234-3136

(Registrant’s telephone number, including area code)

_______________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary Shares, par value $0.00001 per share

STX

The NASDAQ Global Select Market

_______________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 26, 2021, 228,873,365~~January 24, 2022, 218,898,339 of the registrant’s ordinary shares, par value $0.00001 per share, were issued and outstanding.

INDEX

SEAGATE TECHNOLOGY HOLDINGS PLC


		PAGE NO.

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets - ~~April 2,~~December 31, 2021 (Unaudited) and July ~~3, 2020~~2, 2021	4
	Condensed Consolidated Statements of Operations - Three and ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income - Three and ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows - ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 (Unaudited)	7
	Condensed Consolidated Statements of Shareholders’ Equity - Three and ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3127
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3936
Item 4.	Controls and Procedures	4037
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	4037
Item 1A.	Risk Factors	4138
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4138
Item 3.	Defaults Upon Senior Securities	4138
Item 4.	Mine Safety Disclosures	4138
Item 5.	Other Information	4138
Item 6.	Exhibits	4239
	SIGNATURES	4340

Table of Contents

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


Table of Contents		Page
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Operations		5
Condensed Consolidated Statements of Comprehensive Income		6
Condensed Consolidated Statements of Cash Flows		7
Condensed Consolidated Statements of Shareholders’ Equity		8
Notes to Condensed Consolidated Financial Statements		10
	Note 1. Basis of Presentation and Summary of Significant Accounting Policies	10
	Note 2. Balance Sheet Information	1211
	Note 3. Debt	14
	Note 4. Income Taxes	1716
	Note 5. ~~Leases~~	17
	~~Note 6.~~ Restructuring and Exit Costs	1816
	Note 6. Derivative Financial Instruments	16
	Note 7. ~~Derivative Financial Instruments~~Fair Value	19
	Note 8. ~~Fair Value~~Equity	2122
	Note 9. ~~Equity~~Revenue	23
	Note 10. Guarantees	23
	Note 11. Earnings Per Share	24
	Note 12. Legal, Environmental and Other Contingencies	25
	Note ~~10. Revenue~~13. Commitments	26
	~~Note 11. Guarantees~~	26
	~~Note 12. Earnings Per Share~~	27
	~~Note 13. Legal, Environmental and Other Contingencies~~	28
	Note 14. Subsequent Events	3026

See Notes to Condensed Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)


		April 2, 2021		July 3, 2020			December 31, 2021		July 2, 2021
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,212	$	1,722	Cash and cash equivalents	$	1,535	$	1,209

Accounts receivable, net	Accounts receivable, net	978		1,115		Accounts receivable, net	1,399		1,158
Inventories	Inventories	1,281		1,142		Inventories	1,287		1,204
Other current assets	Other current assets	221		135		Other current assets	229		208
Total current assets	Total current assets	3,692		4,114		Total current assets	4,450		3,779
Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	2,215		2,129		Property, equipment and leasehold improvements, net	2,216		2,181

Goodwill	Goodwill	1,237		1,237		Goodwill	1,237		1,237
Other intangible assets, net	Other intangible assets, net	35		58		Other intangible assets, net	19		29
Deferred income taxes	Deferred income taxes	1,118		1,120		Deferred income taxes	1,126		1,117
Other assets, net	Other assets, net	307		272		Other assets, net	327		332
Total Assets	Total Assets	$	8,604	$	8,930	Total Assets	$	9,375	$	8,675
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:

Accounts payable	Accounts payable	$	1,861	$	1,808	Accounts payable	$	1,812	$	1,725
Accrued employee compensation	Accrued employee compensation	178		224		Accrued employee compensation	228		282
Accrued warranty	Accrued warranty	60		69		Accrued warranty	62		61
Current portion of long-term debt	Current portion of long-term debt	245		19		Current portion of long-term debt	235		245
Accrued expenses	Accrued expenses	649		602		Accrued expenses	655		608

Total current liabilities	Total current liabilities	2,993		2,722		Total current liabilities	2,992		2,921
Long-term accrued warranty	Long-term accrued warranty	74		82		Long-term accrued warranty	82		75

Other non-current liabilities	Other non-current liabilities	156		183		Other non-current liabilities	149		154
Long-term debt		4,897		4,156
Long-term debt, less current portion						Long-term debt, less current portion	5,626		4,894
Total Liabilities	Total Liabilities	8,120		7,143		Total Liabilities	8,849		8,044
Commitments and contingencies (See Notes 11 and 13)
Commitments and contingencies (See Notes 10, 12 and 13)						Commitments and contingencies (See Notes 10, 12 and 13)

Shareholders’ Equity:	Shareholders’ Equity:					Shareholders’ Equity:
Ordinary shares and additional paid-in capital	Ordinary shares and additional paid-in capital	6,939		6,757		Ordinary shares and additional paid-in capital	7,084		6,977
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(38)		(66)		Accumulated other comprehensive loss	(25)		(41)
Accumulated deficit	Accumulated deficit	(6,417)		(4,904)		Accumulated deficit	(6,533)		(6,305)

Total Equity	Total Equity	484		1,787		Total Equity	526		631
Total Liabilities and Equity	Total Liabilities and Equity	$	8,604	$	8,930	Total Liabilities and Equity	$	9,375	$	8,675

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)

For the Three Months Ended For the Nine Months Ended
April 2,
2021 April 3,
2020 April 2,
2021 April 3,
2020
Revenue $ 2,731 $ 2,718 $ 7,668 $ 7,992

Cost of revenue 1,991 1,972 5,636 5,817
Product development 227 246 671 751
Marketing and administrative 126 119 366 361
Amortization of intangibles 3 3 9 11
Restructuring and other, net (2) 2 1 19
Total operating expenses 2,345 2,342 6,683 6,959

Income from operations 386 376 985 1,033

Interest income 1 4 2 19
Interest expense (59) (49) (161) (152)
Other, net 11 7 25 (28)
Other expense, net (47) (38) (134) (161)

Income before income taxes 339 338 851 872
Provision for income taxes 10 18 19 34
Net income $ 329 $ 320 $ 832 $ 838

Net income per share:
Basic $ 1.41 $ 1.23 $ 3.38 $ 3.19
Diluted 1.39 1.22 3.34 3.15
Number of shares used in per share calculations:
Basic 233 261 246 263
Diluted 237 263 249 266
Cash dividends declared per ordinary share $ 0.67 $ 0.65 $ 1.99 $ 1.93


	For the Three Months Ended				For the Six Months Ended
	December 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Revenue	$	3,116	$	2,623	$	6,231	$	4,937

Cost of revenue	2,168		1,927		4,327		3,645
Product development	228		221		461		444
Marketing and administrative	136		122		269		240
Amortization of intangibles	3		3		6		6
Restructuring and other, net	1		2		2		3
Total operating expenses	2,536		2,275		5,065		4,338

Income from operations	580		348		1,166		599

Interest income	1		—		1		1
Interest expense	(62)		(52)		(121)		(102)
Other, net	(5)		(5)		1		14
Other expense, net	(66)		(57)		(119)		(87)

Income before income taxes	514		291		1,047		512
Provision for income taxes	13		11		20		9
Net income	$	501	$	280	$	1,027	$	503

Net income per share:
Basic	$	2.27	$	1.12	$	4.58	$	1.99
Diluted	2.23		1.12		4.50		1.97
Number of shares used in per share calculations:
Basic	221		249		224		253
Diluted	225		251		228		255

See Notes to Condensed Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

For the Three Months Ended For the Nine Months Ended
April 2,
2021 April 3,
2020 April 2,
2021 April 3,
2020
Net income $ 329 $ 320 $ 832 $ 838
Other comprehensive (loss) income, net of tax:
Change in net unrealized loss on cash flow hedges:
Net unrealized gains (losses) arising during the period 4 (29) 20 (27)
Gains reclassified into earnings (7) (1) (9) 0
Net change (3) (30) 11 (27)
Change in unrealized components of post-retirement plans:
Net unrealized gains arising during the period 1 2 0 2
Losses reclassified into earnings 0 0 2 0
Net change 1 2 2 2
Foreign currency translation adjustments 0 (6) 15 (8)
Total other comprehensive (loss) income, net of tax (2) (34) 28 (33)
Comprehensive income $ 327 $ 286 $ 860 $ 805


	For the Three Months Ended				For the Six Months Ended
	December 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Net income	$	501	$	280	$	1,027	$	503
Other comprehensive income (loss), net of tax:
Change in net unrealized gains (losses) on cash flow hedges:
Net unrealized gains arising during the period	11		12		2		16
Losses (gains) reclassified into earnings	9		(2)		12		(2)
Net change	20		10		14		14




Change in unrealized components of post-retirement plans:
Net unrealized (losses) gains arising during the period	—		(1)		1		(1)
Losses reclassified into earnings	—		1		1		2
Net change	—		—		2		1
Foreign currency translation adjustments	—		—		—		15
Total other comprehensive income, net of tax	20		10		16		30
Comprehensive income	$	521	$	290	$	1,043	$	533

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

For the Nine Months Ended
April 2,
2021 April 3,
2020
OPERATING ACTIVITIES
Net income $ 832 $ 838
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 294 279
Share-based compensation 87 80
Deferred income taxes (7) 3
Other non-cash operating activities, net (8) 55
Changes in operating assets and liabilities:
Accounts receivable, net 138 (172)
Inventories (141) (126)
Accounts payable 60 424
Accrued employee compensation (46) (14)
Accrued expenses, income taxes and warranty 0 (18)
Other assets and liabilities (61) (23)
Net cash provided by operating activities 1,148 1,326
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements (374) (471)
Proceeds from sale of investments 11 0
Proceeds from the sale of assets 4 1
Purchases of investments (4) (57)
Maturities of short-term investments 3 0
Net cash used in investing activities (360) (527)
FINANCING ACTIVITIES
Redemption and repurchase of debt (27) (685)
Dividends to shareholders (495) (505)
Repurchases of ordinary shares (1,819) (795)
Taxes paid related to net share settlement of equity awards (33) (39)
Proceeds from issuance of long-term debt 1,000 498
Proceeds from issuance of ordinary shares under employee share plans 95 100
Other financing activities, net (19) (2)
Net cash used in financing activities (1,298) (1,428)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash 0 (8)
Decrease in cash, cash equivalents and restricted cash (510) (637)
Cash, cash equivalents and restricted cash at the beginning of the period 1,724 2,251
Cash, cash equivalents and restricted cash at the end of the period $ 1,214 $ 1,614


	For the Six Months Ended
	December 31, 2021		January 1, 2021
OPERATING ACTIVITIES
Net income	$	1,027	$	503
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	212		195
Share-based compensation	70		58

Deferred income taxes	—		(13)



Other non-cash operating activities, net	22		4
Changes in operating assets and liabilities:
Accounts receivable, net	(241)		315
Inventories	(83)		(176)
Accounts payable	63		(75)
Accrued employee compensation	(54)		(18)
Accrued expenses, income taxes and warranty	40		(36)
Other assets and liabilities	(39)		13
Net cash provided by operating activities	1,017		770
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements	(212)		(270)

Proceeds from sale of investments	34		11


Purchases of investments	(18)		(4)



Net cash used in investing activities	(196)		(263)
FINANCING ACTIVITIES
Redemption and repurchase of debt	(481)		(21)
Dividends to shareholders	(304)		(334)
Repurchases of ordinary shares	(896)		(1,068)
Taxes paid related to net share settlement of equity awards	(45)		(32)
Proceeds from issuance of long-term debt	1,200		1,000
Proceeds from issuance of ordinary shares under employee stock plans	37		40
Other financing activities, net	(6)		(15)
Net cash used in financing activities	(495)		(430)

Increase in cash, cash equivalents and restricted cash	326		77
Cash, cash equivalents and restricted cash at the beginning of the period	1,211		1,724
Cash, cash equivalents and restricted cash at the end of the period	$	1,537	$	1,801

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021

(In millions)

(Unaudited)


	Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at October 1, 2021	225	$	—	$	7,044	$	(45)	$	(6,398)	$	601

Net income								501		501
Other comprehensive income						20				20
Issuance of ordinary shares under employee share plans	—			4						4
Repurchases of ordinary shares	(5)							(480)		(480)
Tax withholding related to vesting of restricted share units	(1)							(2)		(2)
Dividends to shareholders ($0.70 per ordinary share)								(154)		(154)
Share-based compensation				36						36
Balance at December 31, 2021	219	$	—	$	7,084	$	(25)	$	(6,533)	$	526

Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total
Balance at January 1, 2021 240 $ 0 $ 6,855 $ (36) $ (5,829) $ 990
Net income 329 329
Other comprehensive loss (2) (2)
Issuance of ordinary shares under employee share plans 1 55 55
Repurchases of ordinary shares (11) (762) (762)
Tax withholding related to vesting of restricted share units 0 (1) (1)
Dividends to shareholders (154) (154)
Share-based compensation 29 29
Balance at April 2, 2021 230 $ 0 $ 6,939 $ (38) $ (6,417) $ 484


		Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total			Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at January 3, 2020		261	$	0	$	6,667	$	(33)	$	(4,804)	$	1,830
Balance at October 2, 2020													Balance at October 2, 2020	258	$	—	$	6,814	$	(46)	$	(4,947)	$	1,821
Net income	Net income								320		320		Net income								280		280
Other comprehensive loss							(34)				(34)
Other comprehensive income													Other comprehensive income						10				10
Issuance of ordinary shares under employee share plans	Issuance of ordinary shares under employee share plans	1			31						31		Issuance of ordinary shares under employee share plans	—			11						11
Repurchases of ordinary shares	Repurchases of ordinary shares	(5)							(214)		(214)		Repurchases of ordinary shares	(18)							(1,000)		(1,000)
Tax withholding related to vesting of restricted share units	Tax withholding related to vesting of restricted share units	0							0		0		Tax withholding related to vesting of restricted share units	—							(1)		(1)
Dividends to shareholders									(168)		(168)
Dividends to shareholders ($0.67 per ordinary share)													Dividends to shareholders ($0.67 per ordinary share)								(161)		(161)
Share-based compensation	Share-based compensation				27						27		Share-based compensation				30						30
Balance at April 3, 2020		257	$	0	$	6,725	$	(67)	$	(4,866)	$	1,792
Balance at January 1, 2021													Balance at January 1, 2021	240	$	—	$	6,855	$	(36)	$	(5,829)	$	990

See Notes to Condensed Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the ~~Nine~~Six Months Ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021

(In millions)

(Unaudited)


	Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at July 2, 2021	227	$	—	$	6,977	$	(41)	$	(6,305)	$	631
Net income								1,027		1,027
Other comprehensive income						16				16
Issuance of ordinary shares under employee share plans	3			37						37
Repurchases of ordinary shares	(10)							(905)		(905)
Tax withholding related to vesting of restricted share units	(1)							(45)		(45)
Dividends to shareholders ($1.37 per ordinary share)								(305)		(305)
Share-based compensation				70						70
Balance at December 31, 2021	219	$	—	$	7,084	$	(25)	$	(6,533)	$	526

Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total
Balance at July 3, 2020 257 $ 0 $ 6,757 $ (66) $ (4,904) $ 1,787
Net income 832 832
Other comprehensive income 28 28
Issuance of ordinary shares under employee share plans 4 95 95
Repurchases of ordinary shares (30) (1,830) (1,830)
Tax withholding related to vesting of restricted share units (1) (33) (33)
Dividends to shareholders (482) (482)
Share-based compensation 87 87
Balance at April 2, 2021 230 $ 0 $ 6,939 $ (38) $ (6,417) $ 484


		Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total			Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at June 28, 2019		269	$	0	$	6,545	$	(34)	$	(4,349)	$	2,162
Impact of adopting new lease standard									(2)		(2)
Balance at July 3, 2020													Balance at July 3, 2020	257	$	—	$	6,757	$	(66)	$	(4,904)	$	1,787
Net income	Net income								838		838		Net income								503		503
Other comprehensive loss							(33)				(33)
Other comprehensive income													Other comprehensive income						30				30
Issuance of ordinary shares under employee share plans	Issuance of ordinary shares under employee share plans	6			100						100		Issuance of ordinary shares under employee share plans	3			40						40
Repurchases of ordinary shares	Repurchases of ordinary shares	(17)							(811)		(811)		Repurchases of ordinary shares	(19)							(1,068)		(1,068)
Tax withholding related to vesting of restricted share units	Tax withholding related to vesting of restricted share units	(1)							(39)		(39)		Tax withholding related to vesting of restricted share units	(1)							(32)		(32)
Dividends to shareholders									(503)		(503)
Dividends to shareholders ($1.32 per ordinary share)													Dividends to shareholders ($1.32 per ordinary share)								(328)		(328)
Share-based compensation	Share-based compensation				80						80		Share-based compensation				58						58
Balance at April 3, 2020		257	$	0	$	6,725	$	(67)	$	(4,866)	$	1,792
Balance at January 1, 2021													Balance at January 1, 2021	240	$	—	$	6,855	$	(36)	$	(5,829)	$	990

See Notes to Condensed Consolidated Financial Statements.

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SEAGATE TECHNOLOGY HOLDINGS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Basis of Presentation and Summary of Significant Accounting Policies

Organization

Seagate Technology Holdings plc (“STX”) and its subsidiaries (collectively, unless the context otherwise indicates, the “Company”) is a leading provider of data storage technology and solutions. Its principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, the Company produces a broad range of data storage products including solid state drives (“SSDs”), solid state hybrid drives (“SSHDs”), storage subsystems, as well as a scalable edge-to-cloud mass data platform that includes data transfer shuttles and ~~storage subsystems.~~a storage-as-a-service cloud.

HDDs are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. HDDs continue to be the primary medium of mass data storage due to their performance attributes, reliability, high capacities, superior quality and cost effectiveness. Complementing existing storage architectures, SSDs use integrated circuit assemblies as memory to store data, and most SSDs use NAND flash memory. In contrast to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a high-capacity HDD and a smaller SSD acting as a cache to improve performance of frequently accessed data.

The Company’s HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage ~~supports high capacity, low-cost per terabyte storage applications, including nearline, video~~involves well-established use cases—such as hyperscale data centers and ~~image applications and network-attached storage.~~public clouds as well as emerging use cases. Legacy markets include ~~mission critical, desktop, notebook, consumer, digital video recorders and gaming applications. These~~ markets ~~were previously categorized as enterprise servers and storage systems, edge non-compute applications and edge compute applications.~~the Company continues to service but that it does not plan to invest in significantly. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment, Serial Attached SCSI and Non-Volatile Memory Express based designs to support a wide variety of mass capacity and legacy applications.

The Company’s ~~enterprise data solutions~~system portfolio includes storage subsystems ~~and mass capacity optimized private cloud storage solutions~~ for enterprises, cloud service providers, scale-out storage servers and ~~cloud and managed service providers.~~original equipment manufacturers (“OEMs”). Engineered for modularity, mobility, ~~mass~~ capacity and performance, these solutions include the Company’s enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage within legacy ~~enterprise IT~~ environments or build new ~~on premises private storage clouds~~ecosystems from the ground up in a secure, cost-effective manner.

The Company’s ~~other solutions include~~Lyve portfolio provides a simple, cost-efficient and secure way to manage massive volumes of data across the distributed enterprise. The Lyve platform includes a shuttle solution that enables enterprises to transfer massive amounts of data from endpoints to the core cloud, a storage-as-a-service cloud that provides frictionless mass capacity storage at the metro edge, a converged object storage solution enabling efficient capture and consolidation of massive data sets and Cortx, an ~~edge-to-cloud~~open-source object storage software optimized for mass ~~storage platform, which is designed to reduce the cost~~capacity and ~~complexity associated with storing, moving and activating~~ data ~~at scale.~~intensive workloads.

Basis of Presentation and Consolidation

The unaudited Condensed Consolidated Financial Statements of the Company and the accompanying notes were prepared in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and all its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and balances.

The preparation of financial statements in accordance with ~~the United States (“~~U.S.~~”) generally accepted accounting principles~~ GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and accompanying notes. These estimates and assumptions include the impact of the COVID-19 pandemic. Actual results could differ materially from those estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its condensed consolidated financial statements.

The Company’s consolidated financial statements for the fiscal year ended July ~~3, 2020~~2, 2021 are included in its Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”) on August ~~7, 2020.~~6, 2021. The Company believes that the disclosures included in these unaudited condensed consolidated financial statements, when read in conjunction with its consolidated financial statements as of July ~~3, 2020,~~2, 2021, and the notes thereto, are adequate to make the information presented not misleading. The results of operations and the cash flows for the three and six months ended December 31, 2021 are not necessarily indicative of the results to be expected for any subsequent interim period or for the Company’s fiscal year ending July 1, 2022.

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Fiscal Year

The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. In fiscal years with 53 weeks, the first quarter consists of 14 weeks and the remaining quarters consist of 13 weeks each. The three and ~~nine~~six months ended ~~April 2,~~December 31, 2021 consisted of 13 and 3926 weeks, respectively, and the three and ~~nine~~six months ended ~~April 3, 2020~~January 1, 2021 consisted of 13 and 4026 weeks, respectively. Fiscal year ~~2021,~~2022, which ends on July ~~2, 2021,~~1, 2022, is comprised of 52 weeks and fiscal year ~~2020,~~2021, which ended on July ~~3, 2020,~~2, 2021, was comprised of 5352 weeks. The fiscal quarters ended ~~April 2,~~December 31, 2021, October 1, 2021 and January 1, 2021, ~~and April 3, 2020,~~ are also referred to herein as the ~~“March~~“December 2021 quarter”, the ~~“December 2020~~“September 2021 quarter” and the ~~“March~~“December 2020 quarter”, respectively. The results of operations for the three and nine months ended April 2, 2021 are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the Company’s fiscal year ending July 2, 2021.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies disclosed in Note 1. Basis of Presentation and Summary of Significant Accounting Policies of “Financial Statements and Supplementary Data” contained in Part II, Item 8. of the Company’s Annual Report on Form 10-K for the fiscal year ended July ~~3, 2020,~~2, 2021, as filed with the SEC on August ~~7, 2020.~~6, 2021.

Recently Adopted Accounting Pronouncements

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) ~~issued Accounting Standards Update (“ASU”) 2016-13 (ASC Topic 326),~~ ~~Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments~~. This ASU amends the requirement on the measurement and recognition of expected credit losses for financial assets held to include future conditions in its estimate of expected credit losses. The Company adopted this new accounting pronouncement in the quarter ended October 2, 2020. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-15 (ASC Subtopic 350-40),~~ ~~Intangibles—Goodwill and Other—Internal-Use Software—Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract~~. This ASU aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The Company adopted this new accounting pronouncement in the quarter ended October 2, 2020. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

~~In December 2019, the FASB~~ issued ASU 2019-12 (ASC Topic 740), Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by removing certain exceptions to the general principles and amending existing guidance to improve consistent application. ~~The~~This ASU became effective and the Company ~~is required to adopt this new accounting pronouncement~~adopted the guidance in the ~~first quarter of fiscal year 2022. Early~~September 2021 quarter. The adoption ~~is permitted. The Company is in the process of assessing the impact~~ of this ASU did not have an impact on ~~its~~the Company’s condensed consolidated financial statements.

In July 2021, the FASB issued ASU 2021-05 (ASC Topic 842), Lessors—Certain Leases with Variable Lease Payments. This ASU requires lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if the lease would have been classified as a sales-type lease or a direct financing lease and the lessor would have otherwise recognized a day-one loss. The Company adopted the guidance in the September 2021 quarter on a prospective basis. The adoption of this ASU did not have an impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 (ASC Topic 848), Reference Rate Reform. This ASU provides optional expedients and exceptions for applying U.S. ~~generally accepted accounting principles~~GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is permitted upon issuance of this update through December 31, 2022. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10 (ASC Topic 832), Disclosures by Business Entities about Government Assistance. This ASU requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the type of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity’s financial statements. The Company is required to adopt this new accounting pronouncement in the first quarter of fiscal year 2023. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.

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2.Balance Sheet Information

Available-for-sale Debt Securities

The following table summarizes, by major type, the fair value and amortized cost of the Company’s available-for-sale debt investments as of ~~April~~December 31, 2021 and July 2, 2021:

(Dollars in millions) Amortized Cost Unrealized Gain/(Loss) Fair Value
Available-for-sale debt securities:
Money market funds $ 531 $ 0 $ 531
Time deposits and certificates of deposit 1 0 1
Other debt securities 18 0 18
Total $ 550 $ 0 $ 550
Included in Cash and cash equivalents $ 530
Included in Other current assets 2
Included in Other assets, net 18
Total $ 550

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	December 31, 2021						July 2, 2021
(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)		Fair Value		Amortized Cost		Unrealized Gain/(Loss)		Fair Value
Available-for-sale debt securities:
Money market funds	$	435	$	—	$	435	$	552	$	—	$	552

Time deposits and certificates of deposit	1		—		1		1		—		1



Other debt securities	36		—		36		18		—		18
Total	$	472	$	—	$	472	$	571	$	—	$	571




Included in Cash and cash equivalents					$	434					$	551

Included in Other current assets					2						2
Included in Other assets, net					36						18
Total					$	472					$	571

As of ~~April~~both December 31, 2021 and July 2, 2021, the Company’s Other current assets included $2 million in restricted cash and investments held as collateral at banks for various performance obligations.

As of ~~April~~December 31, 2021 and July 2, 2021, the Company had 0no material available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined 0no impairment related to credit losses for available-for-sale debt securities as of ~~April~~December 31, 2021 and July 2, 2021.

The fair value and amortized cost of the Company’s investments classified as available-for-sale debt securities as of ~~April 2,~~December 31, 2021, by remaining contractual maturity were as follows:

(Dollars in millions) Amortized Cost Fair Value
Due in less than 1 year $ 532 $ 532
Due in 1 to 5 years 10 10
Due in 6 to 10 years 0 0
Thereafter 8 8
Total $ 550 $ 550

~~The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of July 3, 2020:~~

(Dollars in millions) Amortized Cost Unrealized Gain/(Loss) Fair Value
Available-for-sale debt securities:
Money market funds $ 495 $ 0 $ 495
Time deposits and certificates of deposit 56 0 56
Other debt securities 18 0 18
Total $ 569 $ 0 $ 569
Included in Cash and cash equivalents $ 549
Included in Other current assets 2
Included in Other assets, net 18
Total $ 569

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~~As of July 3, 2020, the Company’s Other current assets included $2 million in restricted cash and investments held as collateral at banks for various performance obligations.~~

As of July 3, 2020, the Company had 0 material available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined 0 available-for-sale debt securities were other-than-temporarily impaired as of July 3, 2020.


(Dollars in millions)	Amortized Cost		Fair Value
Due in less than 1 year	$	436	$	436
Due in 1 to 5 years	28		28
Due in 6 to 10 years	—		—
Thereafter	8		8
Total	$	472	$	472

Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of cash, cash equivalents and restricted cash reported onwithin the Company’s Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Company’s Condensed Consolidated Statements of Cash Flows:


(Dollars in millions)	(Dollars in millions)	April 2, 2021		July 3, 2020		April 3, 2020		June 28, 2019		(Dollars in millions)	December 31, 2021		July 2, 2021		January 1, 2021		July 3, 2020
Cash and cash equivalents	Cash and cash equivalents	$	1,212	$	1,722	$	1,612	$	2,220	Cash and cash equivalents	$	1,535	$	1,209	$	1,799	$	1,722
Restricted cash included in Other current assets	Restricted cash included in Other current assets	2		2		2		31		Restricted cash included in Other current assets	2		2		2		2
Total cash, cash equivalents and restricted cash presented in the Statements of Cash Flows		$	1,214	$	1,724	$	1,614	$	2,251
Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows										Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows	$	1,537	$	1,211	$	1,801	$	1,724

Table of June 28, 2019, the Company’s Other current assets included $31 million in restricted cash and cash equivalents in an escrow account for the sale of certain properties and cash equivalents held as collateral at banks for various performance obligations.Contents

~~Accounts Receivable, net~~

In connection with an existing factoring agreement, the Company sells trade receivables to a third party for cash proceeds less a discount. During the three and nine months ended April 2, 2021, the Company sold trade receivables without recourse for cash proceeds of $35 million and $183 million, respectively, of which $35 million remained subject to servicing by the Company as of April 2, 2021. During the three and nine months ended April 3, 2020, the Company sold trade receivables without recourse for cash proceeds of $79 million. The discounts on receivables sold were not material for the three and nine months ended April 2, 2021 and April 3, 2020.

Inventories

The following table provides details of the inventory balance sheet item:


(Dollars in millions)	(Dollars in millions)	April 2, 2021		July 3, 2020		(Dollars in millions)	December 31, 2021		July 2, 2021
Raw materials and components	Raw materials and components	$	412	$	451	Raw materials and components	$	474	$	375
Work-in-process	Work-in-process	443		313		Work-in-process	463		443
Finished goods	Finished goods	426		378		Finished goods	350		386
Total inventories	Total inventories	$	1,281	$	1,142	Total inventories	$	1,287	$	1,204

Property, Equipment and Leasehold Improvements, net

The components of property, equipment and leasehold improvements, net, were as follows:


(Dollars in millions)	(Dollars in millions)	April 2, 2021		July 3, 2020		(Dollars in millions)	December 31, 2021		July 2, 2021
Property, equipment and leasehold improvements	Property, equipment and leasehold improvements	$	10,384	$	10,212	Property, equipment and leasehold improvements	$	10,521	$	10,378
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(8,169)		(8,083)		Accumulated depreciation and amortization	(8,305)		(8,197)
Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	$	2,215	$	2,129	Property, equipment and leasehold improvements, net	$	2,216	$	2,181

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Accrued Expenses

The following table provides details of the accrued expenses balance sheet item:


(Dollars in millions)	(Dollars in millions)	April 2, 2021		July 3, 2020		(Dollars in millions)	December 31, 2021		July 2, 2021

Dividends payable	Dividends payable	$	154	$	167	Dividends payable	$	154	$	153
Other accrued expenses	Other accrued expenses	495		435		Other accrued expenses	501		455
Total accrued expenses		$	649	$	602
Total						Total	$	655	$	608

Accumulated Other Comprehensive Loss (“AOCL”)

The components of AOCL, net of tax, were as follows:


(Dollars in millions)	(Dollars in millions)	Unrealized Gains/(Losses) on Cash Flow Hedges		Unrealized Gains/(Losses) on Post-Retirement Plans		Foreign Currency Translation Adjustments		Total		(Dollars in millions)	Unrealized Gains/(Losses) on Cash Flow Hedges		Unrealized Gains/(Losses) on Post-Retirement Plans		Foreign Currency Translation Adjustments		Total
Balance at July 3, 2020		$	(24)	$	(26)	$	(16)	$	(66)
Balance at July 2, 2021										Balance at July 2, 2021	$	(18)	$	(22)	$	(1)	$	(41)
Other comprehensive income before reclassifications	Other comprehensive income before reclassifications	20		0		0		20		Other comprehensive income before reclassifications	2		1		—		3
Amounts reclassified from AOCL	Amounts reclassified from AOCL	(9)		2		15		8		Amounts reclassified from AOCL	12		1		—		13
Other comprehensive income	Other comprehensive income	11		2		15		28		Other comprehensive income	14		2		—		16
Balance at April 2, 2021		$	(13)	$	(24)	$	(1)	$	(38)
Balance at December 31, 2021										Balance at December 31, 2021	$	(4)	$	(20)	$	(1)	$	(25)

Balance at June 28, 2019		$	0	$	(20)	$	(14)	$	(34)
Other comprehensive (loss) income before reclassifications		(27)		2		(8)		(33)
Balance at July 3, 2020										Balance at July 3, 2020	$	(24)	$	(26)	$	(16)	$	(66)
Other comprehensive income (loss) before reclassifications										Other comprehensive income (loss) before reclassifications	16		(1)		—		15
Amounts reclassified from AOCL	Amounts reclassified from AOCL	0		0		0		0		Amounts reclassified from AOCL	(2)		2		15		15
Other comprehensive (loss) income		(27)		2		(8)		(33)
Balance at April 3, 2020		$	(27)	$	(18)	$	(22)	$	(67)
Other comprehensive income										Other comprehensive income	14		1		15		30
Balance at January 1, 2021										Balance at January 1, 2021	$	(10)	$	(25)	$	(1)	$	(36)

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3.Debt

The following table provides details of the Company’s debt as of December 31, 2021 and July 2, 2021:


(Dollars in millions)	December 31, 2021		July 2, 2021
Unsecured Senior Notes(1)
$750 issued on February 3, 2017 at 4.25% due March 1, 2022 (the “2022 Notes”), interest payable semi-annually on March 1 and September 1 of each year.	$	220	$	220
$1,000 issued on May 22, 2013 at 4.75% due June 1, 2023 (the “2023 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	541		541
$500 issued on February 3, 2017 at 4.875% due March 1, 2024 (the “2024 Notes”), interest payable semi-annually on March 1 and September 1 of each year.	499		499
$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.	479		479
$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	504		504
$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	463		461
$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	500		500
$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	500		499
$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	500		500
$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	489		489

Term Loan
$600 borrowed on October 14, 2021 at London Interbank Offered Rate (“LIBOR”) plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.	600		—
$600 borrowed on October 14, 2021 at LIBOR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	600		—
$500 borrowed on September 17, 2019 at LIBOR, (the “September 2019 Term Loan”), repayable in quarterly installments of 1.25% of the original principal amount beginning on December 31, 2020, with a final maturity date of September 16, 2025, fully repaid on October 14, 2021.	—		481
	5,895		5,173
Less: unamortized debt issuance costs	(34)		(34)
Debt, net of debt issuance costs	5,861		5,139
Less: current portion of long-term debt	(235)		(245)
Long-term debt, less current portion	$	5,626	$	4,894

______________________________

(1) All unsecured senior notes are issued by Seagate HDD Cayman, and the obligations under these notes are fully and unconditionally guaranteed, on a senior unsecured basis, by Seagate Technology Unlimited Company (“STUC”) and, pursuant to a supplemental indenture dated as of May 18, 2021, STX.

Unsecured Senior Notes

2022 Notes. During the six months ended January 1, 2021, $9 million aggregate principal amount of the 2022 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest.

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2023 Notes. During the six months ended January 1, 2021, $5 million aggregate principal amount of the 2023 Notes were repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. The Company recorded a loss of $1 million on repurchases during the six months ended January 1, 2021, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.

Credit Agreement

The Company’s subsidiary, Seagate HDD Cayman, entered into a credit agreement on February 20, 2019, which was ~~most recently~~ amended on September 16, 2019, January 13, 2021, May 18, 2021 and October 14, 2021 (the “Credit Agreement”)~~, increasing~~.

Prior to the ~~size of~~October 14, 2021 amendment, the senior unsecured revolving credit facility (“Revolving Credit Facility”) and capping the indebtedness guaranteed by certain of Seagate HDD Cayman’s material subsidiaries to an amount $100 million less than the amount that would give rise to a guarantee requirement by such subsidiaries in respect of any series of senior notes. The Credit Agreement ~~provides a $1.725 billion Revolving Credit Facility and~~provided a term loan facility in an aggregate principal amount of $500 million and a $1.725 billion senior unsecured revolving credit facility (“~~Term Loan”~~Revolving Credit Facility”). The ~~Revolving Credit Facility has a final maturity of February 20, 2024 and the~~September 2019 Term Loan ~~has~~had a final maturity date of September 16, ~~2025. The loans made under~~2025 and the Revolving Credit Facility ~~and the Term Loan will bear interest at~~had a ~~rate~~final maturity of the London Interbank Offered Rate (“LIBOR”) plus a variable margin for each facility that will be determined based on the corporate credit rating of the Company. The Revolving Credit Facility also allows such facility to increase by an additional $275 million, provided that (i) there has been, and will be after giving effect to such increase, no default, (ii) the increase is at least $25 million, and (iii) the existing commitments under such facility receive 0.50% most favored nation protection. An aggregate amount of up to $75 million of the Revolving Credit Facility is available for the issuance of letters of credit, and an aggregate amount of up to $50 million of such facility is also available for swing line loans.

February 20, 2024. On September 17, 2019, Seagate HDD Cayman borrowed the $500 million principal amount under the September 2019 Term Loan.

On October 14, 2021, STX and Seagate HDD Cayman entered into an amendment to the Credit Agreement (“Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $1.2 billion that was extended in two tranches of $600 million each (“Term Loan A1” and “Term Loan A2” and together the “Term Loans”). Term Loan A1 and Term Loan A2 were each drawn in full on the closing date for the Fifth Amendment. The proceeds of the Term Loans may be used for general corporate purposes, to refinance or repay the September 2019 Term Loan and to refinance or repay the ~~proceeds were used to repurchase a portion of its outstanding senior notes. The~~2022 Notes. Term Loan A1 bears interest at a rate of LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company. Term Loan A1 is repayable in quarterly installments ~~of 1.25% of the original principal amount~~ beginning on December 31, ~~2020, with~~2022 and has a final maturity date of September 16, 2025. Term Loan A2 bears interest at a rate of LIBOR plus a variable margin ranging from 1.25% to 2.5% that will be determined based on the ~~remaining balance payable upon maturity. The Company repaid $6 million~~corporate credit rating of the Company. Term Loan A2 is repayable in quarterly installments beginning on December 31, 2022 and ~~$12~~has a final maturity date of July 30, 2027. On October 14, 2021, Seagate HDD Cayman utilized part of the proceeds of Term Loan A1 to fully repay the $475 million principal amount outstanding of the September 2019 Term ~~Loan during~~Loan.

In addition, pursuant to the ~~three~~Fifth Amendment, the maturity date for the revolving loan commitments under the Revolving Credit Facility was extended until October 14, 2026, the revolving commitments were increased to $1.75 billion and ~~nine months ended April 2, 2021, respectively.~~the interest rate margins for the revolving loans were amended to LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of the Company.

~~Table~~STX and certain of ~~Contents~~

its material subsidiaries, including STUC, fully and unconditionally guarantee both the Revolving Credit Facility and the Term Loans.

The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The Company was in compliance with the covenants as of ~~April 2,~~December 31, 2021 and expects to be in compliance for the next 12 months.

As of ~~April 2,~~December 31, 2021, 0 borrowings (including swingline loans) were ~~drawn~~outstanding and no commitments were utilized for letters of credit ~~or swing line loans had been utilized~~issued under the Revolving Credit Facility.

~~Other Long-Term~~Future Principal Payments on Long-term Debt

~~$750 million Aggregate Principal Amount of 4.25% Senior Notes due March, 2022 (the “2022 Notes”)~~. The interest on the 2022 Notes is payable semi-annually on March 1 and September 1 of each year. The issuer under the 2022 Notes is Seagate HDD Cayman, and the obligations under the 2022 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the nine months ended April 2, 2021, $9 million aggregate principal amount of the 2022 Notes was repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. During the three and nine months ended April 3, 2020, the Company repurchased $23 million and $273 millionaggregate principal amount of the 2022 Notes, respectively, for cash at a premium to their principal amount, plus accrued and unpaid interest, $250 million principal amount of which was repurchased pursuant to cash tender offers for certain senior notes on September 18, 2019 (the “Tender Offers”). The Company recorded an immaterial loss and a loss of $10 million, respectively, on repurchases during the nine months ended April 2, 2021 and April 3, 2020, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.

~~$1 billion Aggregate Principal Amount of 4.75% Senior Notes due June, 2023 (the “2023 Notes”).~~ ~~The interest on the 2023 Notes is payable semi-annually on June 1 and~~At December 1 of each year. The issuer under the 2023 Notes is Seagate HDD Cayman, and the obligations under the 2023 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the nine months ended April 2, 2021, $5 million aggregate principal amount of the 2023 Notes was repurchased for cash at a premium to their principal amount, plus accrued and unpaid interest. During the three and nine months ended April 3, 2020, the Company repurchased $17 million and $217 million aggregate principal amount of the 2023 Notes for cash at a discount or at a premium to their principal amount, plus accrued and unpaid interest, respectively, $200 million principal amount of which was repurchased pursuant to the Tender Offers. The Company recorded a loss of $1 million and $10 million, respectively, on repurchases during the nine months ended April 2, 2021 and April 3, 2020, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.

~~$500 million Aggregate Principal Amount of 4.875% Senior Notes due March, 2024 (the “2024 Notes”).~~ The interest on the 2024 Notes is payable semi-annually on March 1 and September 1 of each year. The issuer under the 2024 Notes is Seagate HDD Cayman, and the obligations under the 2024 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.

~~$1 billion Aggregate Principal Amount of 4.75% Senior Notes due January, 2025 (the “2025 Notes”)~~. The interest on the 2025 Notes is payable semi-annually on January 1 and July 1 of each year. The issuer under the 2025 Notes is Seagate HDD Cayman, and the obligations under the 2025 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX. During the nine months ended April 3, 2020, $170 million aggregate principal amount was repurchased pursuant to the Tender Offers. The Company recorded a loss of $8 million on repurchases during the nine months ended April 3, 2020, which is included in Other, net in the Company’s Condensed Consolidated Statements of Operations.

~~$700 million Aggregate Principal Amount of 4.875% Senior Notes due June, 2027 (the “2027 Notes”)~~. The interest on the 2027 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2027 Notes is Seagate HDD Cayman, and the obligations under the 2027 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.

~~$500 million Aggregate Principal Amount of 4.091% Senior Notes due June, 2029 (the “June 2029 Notes”)~~. The interest on the June 2029 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the June 2029 Notes is Seagate HDD Cayman, and the obligations under the June 2029 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.

~~Table of Contents~~

~~$500 million Aggregate Principal Amount of 3.125% Senior Notes due July, 2029 (the “July 2029 Notes”)~~. ~~On December 8, 2020, Seagate HDD Cayman issued, in a private placement, $500 million in aggregate principal amount of the July 2029 Notes, which will mature on July 15, 2029.The obligations under the July 2029 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.~~ ~~The interest on the July 2029 Notes is payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2021. At any time before January 15, 2024, Seagate HDD Cayman may redeem some or all of the July 2029 Notes at a “make-whole” redemption price.~~ The “make-whole” redemption price will be equal to (1) 100% of the principal amount of the July 2029 Notes redeemed, plus (2) the greater of (a) 1.0% of the principal amount of the July 2029 Notes and (b) the excess, if any, of (i) the present value at such redemption date of (x) the applicable redemption price of such July 2029 Notes that would apply if such July 2029 Notes were redeemed on January 15, 2024, plus (y) all remaining scheduled payments of interest due on such July 2029 Notes to and including January 15, 2024, computed using a discount rate equal to the applicable Treasury Rate as of such redemption date plus 50 basis points; over (ii) the sum of accrued and unpaid interest, if any, to, but excluding, the redemption date, plus the principal amount of such July 2029 Notes, plus (3) accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after January 15, 2024, Seagate HDD Cayman may redeem some or all of such July 2029 Notes at a price of 101.563%, 100.781% and 100.000%, after January 15, 2024, January 15, 2025 and January 15, 2026, respectively, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. In addition, Seagate HDD Cayman may redeem with the net cash proceeds from one or more equity offerings up to 40% of the July 2029 Notes before January 15, 2024, at a redemption price of 103.125%, plus accrued and unpaid interest to, but excluding, the redemption date.

~~$500 million Aggregate Principal Amount of 4.125% Senior Notes due January, 2031 (the “January 2031 Notes”)~~. The interest on the January 2031 Notes is payable semi-annually on January 15 and July 15 of each year. The issuer under the January 2031 Notes is Seagate HDD Cayman, and the obligations under the January 2031 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.

~~$500 million Aggregate Principal Amount of 3.375% Senior Notes due July, 2031 (the “July 2031 Notes”)~~. ~~On December 8, 2020, Seagate HDD Cayman issued, in a private placement, $500 million in aggregate principal amount of the July 2031 Notes, which will mature on July 15, 2031.The obligations under the July 2031 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.~~ ~~The interest on the July 2031 Notes is payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2021~~. ~~At any time before January 15, 2026, Seagate HDD Cayman may redeem some or all of the July 2031 Notes at a “make-whole” redemption price.~~ ~~The “make-whole” redemption price will be equal to (1) 100% of the principal amount of the July 2031 Notes redeemed, plus (2) the greater of (a)~~ ~~1.0%~~ of the principal amount of the July 2031 Notes and (b) the excess, if any, of (i) the present value at such redemption date of (x) the applicable redemption price of such July 2031 Notes that would apply if such July 2031 Notes were redeemed on January 15, 2026, plus (y) all remaining scheduled payments of interest due on such July 2031 Notes to and including January 15, 2026, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (ii) the sum of accrued and unpaid interest, if any, to, but excluding, the redemption date, plus the principal amount of such July 2031 Notes, plus (3) accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after January 15, 2026, Seagate HDD Cayman may redeem some or all of such July 2031 Notes at a price of 101.688%, 101.125%, 100.563% and 100.000%, after January 15, 2026, January 15, 2027, January 15, 2028 and January 15, 2029, respectively, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. In addition, Seagate HDD Cayman may redeem with the net cash proceeds from one or more equity offerings up to 40% of the July 2031 Notes before January 15, 2024, a redemption price of 103.375%~~, accrued and unpaid interest to, but excluding, the redemption date.~~

~~$500 million Aggregate Principal Amount of 5.75% Senior Notes due December, 2034 (the “2034 Notes”)~~. The interest on the 2034 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer under the 2034 Notes is Seagate HDD Cayman, and the obligations under the 2034 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, by STX.

~~At April 2,~~31, 2021, future principal payments on long-term debt were as follows (in millions):

Fiscal Year Amount
Remainder of 2021 $ 6
2022 245
2023 566
2024 525
2025 504
Thereafter 3,376
Total $ 5,222


Fiscal Year	Amount
Remainder of 2022	$	220
2023	585
2024	560
2025	562
2026	563

Thereafter	3,445
Total	$	5,935

1615

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4.Income Taxes

The Company recorded income tax provisions of ~~$10~~$13 million and ~~$19~~$20 million infor the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021, respectively. The discrete items in the income tax provision were not material for the three months ended December 31, 2021. The income tax provision for the ~~three~~six months ended ~~April 2,~~December 31, 2021 included approximately $4$9 millionof net discrete tax benefit ~~primarily associated with filing of tax returns in various jurisdictions.~~ ~~The income tax provision for the nine months ended April 2, 2021 included approximately $15 million of net discrete tax benefit,~~, primarily associated with net excess tax benefits related to share-based compensation ~~expense, filing of tax returns in various jurisdictions, and postponement of the previously enacted United Kingdom tax rate change in the quarter ended October 2, 2020.~~expense.

During the ~~nine~~six months ended ~~April 2,~~December 31, 2021, the Company’s unrecognized tax benefits excluding interest and penalties increased by approximately ~~$18~~$7 million to $~~107~~115 million, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. During the twelve months beginning ~~April 3, 2021,~~January 1, 2022, the Company expects that its unrecognized tax benefits could be reduced by an immaterial amount, as a result of the expiration of certain statutes of limitation.

The Company recorded income tax provisions of ~~$18~~$11 million and ~~$34~~$9 million infor the three and ~~nine~~six months ended January 1, 2021, respectively.~~April 3, 2020, respectively.~~ The discrete items in the income tax provision were not material for the three months ended ~~April 3, 2020.~~January 1, 2021. The income tax provision for the ~~nine~~six months ended ~~April 3, 2020~~January 1, 2021 included approximately ~~$13~~$11 million of net discrete tax ~~benefits,~~benefit, primarily associated with net excess tax benefits related to share-based compensation ~~expense.~~expense and postponement of the previously enacted United Kingdom tax rate change in the quarter ended October 2, 2020.

The Company’s income tax provision recorded for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021 and the ~~April 3, 2020~~ three and six months endedJanuary 1, 2021 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) current year generation of research credits.

5.~~Leases~~

~~The Company is a lessee in several operating leases related to real estate facilities for warehouse and office space.~~

The Company’s lease arrangements comprise operating leases with various expiration dates through 2067. The lease term includes the non-cancelable period of the lease, adjusted for options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

~~Operating lease costs include short-term lease costs and are shown net of immaterial sublease income. The components of lease costs and other information related to leases were as follows:~~

For the Three Months Ended For the Nine Months Ended
(Dollars in millions) April 2,
2021 April 3,
2020 April 2,
2021 April 3,
2020
Operating lease cost $ 4 $ 6 $ 11 $ 17
Variable lease cost 1 1 3 3
Total lease cost $ 5 $ 7 $ 14 $ 20
Operating cash outflows from operating leases $ 5 $ 4 $ 14 $ 13

April 2,
2021 July 3,
2020
Weighted-average remaining lease term 7.1 years 13.2 years
Weighted-average discount rate 6.02 % 6.53 %

~~Right-of-use (“ROU”) assets and lease liabilities are included on the Company’s Condensed Consolidated Balance Sheets as follows:~~

(Dollars in millions) Balance Sheet Location April 2,
2021 July 3,
2020
ROU assets Other assets, net $ 102 $ 103
Current lease liabilities Accrued expenses $ 15 $ 14
Non-current lease liabilities Other non-current liabilities $ 43 $ 49

~~Table of Contents~~

~~At April 2, 2021, future lease payments included in the measurement of lease liabilities were as follows (in millions):~~

Fiscal Year Amount
Remainder of 2021 $ 4
2022 16
2023 12
2024 7
2025 5
Thereafter 25
Total lease payments 69
Less: imputed interest (11)
Present value of lease liabilities $ 58

6.Restructuring and Exit Costs

For the three and six months ended ~~April 2, 2021, the Company recorded a net gain of $2 million comprised primarily of a gain of $3 million from the sale of a property. For the nine months ended April 2,~~December 31, 2021, the Company recorded restructuring charges of $1 million ~~which~~and $2 million, respectively. For the three and six months ended January 1, 2021, the Company recorded restructuring charges of $2 million and $3 million, respectively. The Company’s restructuring plans are comprised primarily of charges related to workforce reduction costs and facilities and other exit costs. All restructuring charges are reported in Restructuring and other, net on the Company’s Condensed Consolidated Statements of Operations.

~~June 2020 Plan -~~ On June 1, 2020, the Company committed to a restructuring plan (the “June 2020 Plan”) consistent with its long-term strategy to drive operational efficiencies, reduce its cost structure and invest in future opportunities. The June 2020 Plan included consolidating the Company’s Minnesota facilities into one location and reducing its headcount worldwide by approximately 500 employees. The June 2020 Plan was substantially completed during the quarter ended October 2, 2020.

The following tables summarize the Company’s restructuring activities under the Company’s active restructuring plans:

June 2020 Plan Other Plans
(Dollars in millions) Workforce Reduction Costs Facilities and Other Exit Costs Workforce Reduction Costs Facilities and Other Exit Costs Total
Accrual balances at July 3, 2020 $ 38 $ 2 $ 5 $ 3 $ 48
Restructuring charges 0 0 5 0 5
Cash payments (37) (1) (8) (1) (47)
Adjustments 0 0 0 (1) (1)
Accrual balances at April 2, 2021 $ 1 $ 1 $ 2 $ 1 $ 5
Total costs incurred to date as of April 2, 2021 $ 56 $ 2 $ 21 $ 28 $ 107
Total expected charges to be incurred as of April 2, 2021 $ 0 $ 7 $ 0 $ 0 $ 7



(Dollars in millions)	Workforce Reduction Costs		Facilities and Other Exit Costs		Total
Accrual balances at July 2, 2021	$	2	$	6	$	8
Restructuring charges	2		—		2
Cash payments	(2)		(2)		(4)

Accrual balances at December 31, 2021	$	2	$	4	$	6
Total costs incurred inception to date as of December 31, 2021	$	65	$	23	$	88
Total expected charges to be incurred as of December 31, 2021	$	—	$	8	$	8

Restructuring Plans
(Dollars in millions) Workforce Reduction Costs Facilities and Other Exit Costs Total
Accrual balances at June 28, 2019 $ 13 $ 17 $ 30
Lease adoption adjustment 0 (11) (11)
Restructuring charges 22 1 23
Cash payments (29) (3) (32)
Adjustments (4) 0 (4)
Accrual balances at April 3, 2020 $ 2 $ 4 $ 6

~~Table of Contents~~

7.6.Derivative Financial Instruments

The Company is exposed to foreign currency exchange rate, interest rate, and to a lesser extent, equity market risks relating to its ongoing business operations. From time to time, the Company enters into cash flow hedges in the form of foreign currency forward exchange contracts in order to manage the foreign currency exchange rate risk on forecasted expenses and investments denominated in foreign currencies.

~~In the quarter ended October 4, 2019, the~~The Company has entered into certain interest rate swap agreements ~~with a notional amount of $500 million~~ to convert the variable interest rate on its Term ~~Loan~~Loans to fixed interest rates. ~~The contracts will mature on September 16, 2025. The notional amount of the interest rate swap agreements was $488 million as of April 2, 2021.~~ The objective of the interest rate swap agreements is to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term ~~Loan.~~Loans. The Company designated the interest rate swaps as cash flow hedges. As of December 31, 2021, the aggregate notional amount of the Company’s interest-rate swap contracts was $1.2 billion, of which $600 million will mature in September 2025 and $600 million will mature in July 2027.

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The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives on its Condensed Consolidated Balance Sheets at fair value. The changes in the fair value of highly effective designated cash flow hedges are recorded in Accumulated other comprehensive loss until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments or are not assessed to be highly effective are adjusted to fair value through earnings. The amount of net unrealized loss on cash flow hedges was ~~$13~~$4 million and ~~$24~~$18 million as of ~~April 2,~~December 31, 2021 and as of July ~~3, 2020,~~2, 2021, respectively. As of ~~April 2,~~December 31, 2021, the amount of existing net losses related to cash flow hedges recorded in Accumulated other comprehensive loss included a net loss of $7$10 million that is expected to be reclassified to earnings within twelve months.

The Company de-designates its cash flow hedges when the forecasted hedged transactions affect earnings or it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in Accumulated other comprehensive loss on the Company’s Condensed Consolidated Balance Sheets are reclassified into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings. The Company recognized a net ~~gain~~loss of $6 million and $3 million in Cost of revenue and Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during the three months ended December 31, 2021. The Company recognized a net loss of $8 million and ~~$12~~$4 million in Cost of revenue and Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during the six months ended December 31, 2021.The Company recognized a net gain of $4 million in Cost of revenue related to the loss of hedge designation on discontinued cash flow hedges during the three and ~~nine~~six months ended ~~April 2, 2021, respectively.~~January 1, 2021. The Company recognized a net loss of $1$2 million and $5$4 million in Interest expense related to the loss of hedge designation on discontinued cash flow hedges during the three and nine months ended April 2, 2021, respectively. The Company recognized a net gain of $1 million and an immaterial net loss in Other, ~~expense,~~ net related to the loss of hedge designation on discontinued cash flow hedges during the three and ~~nine~~six months ended ~~April 3, 2020,~~January 1, 2021, respectively.

Other derivatives not designated as hedging instruments consist of foreign currency forward exchange contracts that the Company uses to hedge the foreign currency exposure on forecasted expenditures denominated in currencies other than the U.S. dollar. The Company recognizes gains and losses on these contracts, as well as the related costs in Other, net on its Condensed Consolidated Statements of Operations.

The following tables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of ~~April 2,~~December 31, 2021 and July ~~3, 2020.~~2, 2021. All of the foreign currency forward exchange contracts mature within 12 months.


		As of April 2, 2021					As of December 31, 2021
(Dollars in millions)	(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges		(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges
Singapore Dollar	Singapore Dollar	$	165	$	53	Singapore Dollar	$	170	$	54
Thai Baht	Thai Baht	131		38		Thai Baht	130		42
Chinese Renminbi	Chinese Renminbi	72		22		Chinese Renminbi	84		22
British Pound Sterling	British Pound Sterling	56		14		British Pound Sterling	65		18

		$	424	$	127		$	449	$	136


	As of July 2, 2021
(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges
Singapore Dollar	$	172	$	43
Thai Baht	131		46
Chinese Renminbi	73		21
British Pound Sterling	54		16
	$	430	$	126

As of July 3, 2020
(Dollars in millions) Contracts Designated as Hedges Contracts Not Designated as Hedges
Singapore Dollar $ 187 $ 56
Thai Baht 157 42
Chinese Renminbi 81 25
British Pound Sterling 64 20
$ 489 $ 143

1917

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The Company is subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of its non-qualified deferred compensation plan: the Seagate Deferred Compensation Plan (the “SDCP”). In fiscal year 2014, the Company entered into a Total Return Swap (“TRS”) in order to manage the equity market risks associated with the SDCP’s liabilities. The Company pays a floating rate, based on LIBOR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP’s liabilities due to changes in the value of the investment options made by employees. As of ~~April 2,~~December 31, 2021, the notional investments underlying the TRS amounted to ~~$120~~$133 million and the contract term iswas through January 2022, settled on a monthly basis, limiting counterparty performance risk. As of January 25, 2022, the contract term of the TRS was extended through January 2023. The Company did not designate the TRS as a ~~hedge, rather,~~hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of the SDCP’s liabilities.

The following tables show the Company’s derivative instruments measured at gross fair value as reflected in the Condensed Consolidated Balance Sheets as of ~~April 2,~~December 31, 2021 and July ~~3, 2020:~~2, 2021:

As of April 2, 2021

As of December 31, 2021

Derivative Assets

Derivative Liabilities

Derivative Assets

Derivative Liabilities

(Dollars in millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(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)

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(2)

Interest rate swap

Other current assets

Accrued expenses

(13)

Interest rate swap

Other current assets

Accrued expenses

(5)

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(1)

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(3)

Total return swap

Other current assets

Accrued expenses

Total derivatives

(16)

Total derivatives

(10)

As of July 3, 2020

As of July 2, 2021

Derivative Assets

Derivative Liabilities

Derivative Assets

Derivative Liabilities

(Dollars in millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(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

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(5)

Interest rate swap

Other current assets

Accrued expenses

(27)

Interest rate swap

Other current assets

—

Accrued expenses

(14)

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(2)

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(2)

Total return swap

Other current assets

Accrued expenses

Total return swap

Other current assets

Accrued expenses

—

Total derivatives

(29)

Total derivatives

(21)

The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021:

Amount of Gain/(Loss) Recognized in Income on Derivatives
(Dollars in millions)
Derivatives Not Designated as Hedging Instruments
Location of Gain/(Loss) Recognized in Income on Derivatives For the Three Months For the Nine Months
Foreign currency forward exchange contracts Other, net $ (3) $ 11
Total return swap Operating expenses 6 22


		Amount of Gain/(Loss) Recognized in Income on Derivatives
(Dollars in millions) Derivatives Not Designated as Hedging Instruments	Location of Gain/(Loss) Recognized in Income on Derivatives	For the Three Months		For the Six Months
Foreign currency forward exchange contracts	Other, net	$	2	$	(2)
Total return swap	Operating expenses	7		6

2018

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(Dollars in millions) Derivatives Designated as Hedging Instruments	(Dollars in millions) Derivatives Designated as Hedging Instruments	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)				Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)				(Dollars in millions) Derivatives Designated as Hedging Instruments				Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)						Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		For the Three Months		For the Nine Months			For the Three Months		For the Nine Months						For the Three Months		For the Nine Months					For the Three Months			For the Six Months						For the Three Months		For the Six Months						For the Three Months		For the Six Months
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts	$	(5)	$	10		Cost of revenue		$	8		$	12		Other, net		$	(1)		$	0		Foreign currency forward exchange contracts		$	4		$	(5)		Cost of revenue		$	(6)		$	(8)		Other, net		$	—		$	1
Interest rate swap	Interest rate swap	9		10		Interest expense		(1)			(5)			Interest expense		0			0	Interest rate swap				7			7			Interest expense		(3)			(4)			Interest expense		—			—


(Dollars in millions) Derivatives Not Designated as Hedging Instruments	(Dollars in millions) Derivatives Not Designated as Hedging Instruments	Location of Gain/(Loss) Recognized in Income on Derivatives		Amount of Gain/(Loss) Recognized in Income on Derivatives						(Dollars in millions) Derivatives Not Designated as Hedging Instruments			Location of Gain/(Loss) Recognized in Income on Derivatives		Amount of Gain/(Loss) Recognized in Income on Derivatives
			For the Three Months			For the Nine Months						For the Three Months			For the Six Months
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts		Other, net			$	(3)				$	(5)		Foreign currency forward exchange contracts	Other, net		$	6	$	14
Total return swap	Total return swap	Operating expenses		$	(23)			$	(16)	Total return swap			Operating expenses		$	11	$	16


(Dollars in millions) Derivatives Designated as Hedging Instruments	(Dollars in millions) Derivatives Designated as Hedging Instruments	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)				Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)				(Dollars in millions) Derivatives Designated as Hedging Instruments				Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)						Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		For the Three Months		For the Nine Months			For the Three Months		For the Nine Months						For the Three Months		For the Nine Months					For the Three Months			For the Six Months						For the Three Months		For the Six Months						For the Three Months		For the Six Months
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts	$	(2)	$	(2)		Other, net		$	0		$	(1)		Other, net		$	0		$	0		Foreign currency forward exchange contracts		$	11		$	15		Cost of revenue		$	4		$	4		Other, net		$	1		$	1
Interest rate swap	Interest rate swap	(27)		(25)		Interest expense		1			1			Interest expense		0			0	Interest rate swap				1			1			Interest expense		(2)			(4)			Interest expense		—			—

8.7.Fair Value

Measurement of Fair Value

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

A fair value hierarchy is based on whether the market participant assumptions used in determining fair value are obtained from independent sources (observable inputs) or reflect the Company’s own assumptions of market participant valuation (unobservable inputs). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are:

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Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

~~Table of Contents~~

Level 2 — Quoted prices for identical assets and liabilities in markets that are inactive; quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; or

Level 3 — Prices or valuations that require inputs that are both unobservable and significant to the fair value measurement.

The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis and views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, the Company’s or the counterparty’s non-performance risk is considered in determining the fair values of liabilities and assets, respectively.

Items Measured at Fair Value on a Recurring Basis

The following tables present the Company’s assets and liabilities, by financial instrument type and balance sheet line item, that are measured at fair value on a recurring basis, excluding accrued interest components, as ~~of April 2, 2021:~~of:

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 $ 530 $ 0 $ 0 $ 530
Total cash equivalents 530 0 0 530
Restricted cash and investments:
Money market funds 1 0 0 1
Time deposits and certificates of deposit 0 1 0 1
Other debt securities 0 0 18 18
Derivative assets 0 6 0 6
Total assets $ 531 $ 7 $ 18 $ 556
Liabilities:
Derivative liabilities $ 0 $ 16 $ 0 $ 16
Total liabilities $ 0 $ 16 $ 0 $ 16

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 $ 530 $ 0 $ 0 $ 530
Other current assets 1 7 0 8
Other assets, net 0 0 18 18
Total assets $ 531 $ 7 $ 18 $ 556
Liabilities:
Accrued expenses $ 0 $ 16 $ 0 $ 16
Total liabilities $ 0 $ 16 $ 0 $ 16


	December 31, 2021								July 2, 2021
	Fair Value Measurements at Reporting Date Using								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		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	$	434	$	—	$	—	$	434	$	551	$	—	$	—	$	551






Total cash equivalents	434		—		—		434		551		—		—		551
Restricted cash and investments:
Money market funds	1		—		—		1		1		—		—		1
Time deposits and certificates of deposit	—		1		—		1		—		1		—		1
Other debt securities	—		—		36		36		—		—		18		18
Derivative assets	—		4		—		4		—		4		—		4
Total assets	$	435	$	5	$	36	$	476	$	552	$	5	$	18	$	575
Liabilities:
Derivative liabilities	$	—	$	10	$	—	$	10	$	—	$	21	$	—	$	21

Total liabilities	$	—	$	10	$	—	$	10	$	—	$	21	$	—	$	21

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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 $ 494 $ 0 $ 0 $ 494
Time deposits and certificates of deposit 0 55 0 55
Total cash equivalents 494 55 0 549
Restricted cash and investments:
Money market funds 1 0 0 1
Time deposits and certificates of deposit 0 1 0 1
Other debt securities 0 0 18 18
Derivative assets 0 6 0 6
Total assets $ 495 $ 62 $ 18 $ 575
Liabilities:
Derivative liabilities $ 0 $ 29 $ 0 $ 29
Total liabilities $ 0 $ 29 $ 0 $ 29


	December 31, 2021								July 2, 2021
	Fair Value Measurements at Reporting Date Using								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		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	$	434	$	—	$	—	$	434	$	551	$	—	$	—	$	551


Other current assets	1		5		—		6		1		5		—		6
Other assets, net	—		—		36		36		—		—		18		18
Total assets	$	435	$	5	$	36	$	476	$	552	$	5	$	18	$	575
Liabilities:
Accrued expenses	$	—	$	10	$	—	$	10	$	—	$	21	$	—	$	21
Total liabilities	$	—	$	10	$	—	$	10	$	—	$	21	$	—	$	21

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 $ 494 $ 55 $ 0 $ 549
Other current assets 1 7 0 8
Other assets, net 0 0 18 18
Total assets $ 495 $ 62 $ 18 $ 575
Liabilities:
Accrued expenses $ 0 $ 29 $ 0 $ 29
Total liabilities $ 0 $ 29 $ 0 $ 29

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The Company classifies items in Level 1 if the financial assets consist of securities for which quoted prices are available in an active market.

The Company classifies items in Level 2 if the financial asset or liability is valued using observable inputs. The Company uses observable inputs including quoted prices in active markets for similar assets or liabilities. Level 2 assets include: agency bonds, corporate bonds, commercial paper, municipal bonds, U.S. Treasuries, time deposits and certificates of deposit. These debt investments are priced using observable inputs and valuation models which vary by asset class. The Company uses a pricing service to assist in determining the fair value of all of its cash equivalents. For the cash equivalents in the Company’s portfolio, multiple pricing sources are generally available. The pricing service uses inputs from multiple industry-standard data providers or other third-party sources and various methodologies, such as weighting and models, to determine the appropriate price at the measurement date. The Company corroborates the prices obtained from the pricing service against other independent sources and, as of ~~April 2,~~December 31, 2021, has not found it necessary to make any adjustments to the prices obtained. The Company’s derivative financial instruments are also classified within Level 2. The Company’s derivative financial instruments consist of foreign currency forward exchange contracts, interest rate swaps and the TRS. The Company recognizes derivative financial instruments in its condensed consolidated financial statements at fair value. The Company determines the fair value of these instruments by considering the estimated amount it would pay or receive to terminate these agreements at the reporting date.

Items Measured at Fair Value on a Non-Recurring Basis

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic ~~objectives. These strategic investments primarily include cost basis investments representing those where~~objectives, which are accounted for either under the ~~Company does not have~~equity method or the ~~ability to exercise significant influence. These investments are included~~measurement alternative. If measured at fair value in ~~Other assets, net on~~ the ~~Company’s~~ Condensed Consolidated Balance Sheets, these investments would generally be classified in Level 3 of the fair value hierarchy.

For the investments that are accounted for under the equity method, the Company recorded an immaterial gain and ~~are periodically analyzed~~a net gain of $3 million for the three and six months ended December 31, 2021, respectively. The Company recorded a net gain of $1 million and an immaterial gain for the three and six months ended January 1, 2021, respectively. The adjusted carrying value of the investments accounted for under the equity method amounted to ~~determine whether or not there are indicators~~$81 million and $78 million as of ~~impairment.~~

~~As of April 2,~~December 31, 2021 and July ~~3, 2020,~~2, 2021, respectively.

For the investments that are accounted for under the measurement alternative, the Company recorded a net loss of $2 million and a net gain of $4 million for the three and six months ended December 31, 2021, respectively. The Company recorded a net loss of $7 million and a net gain of $16 million for the three and six months ended January 1, 2021, respectively, related to downward and upward adjustments due to observable price changes. As of December 31, 2021 and July 2, 2021, the carrying value of the Company’s strategic investments under the measurement alternative was ~~$163~~$88 million and ~~$135 million~~, respectively. The Company’s strategic investments are recorded at fair value only if an impairment or observable price change is recognized in the current period. If an observable price change or impairment is recognized on the Company’s strategic investments during the period, the Company classifies these assets as Level 3 within the fair value hierarchy based on the nature of the fair value inputs. For the three and nine months ended ~~April 2, 2021, the Company recorded upward adjustments of $10~~$117 million, ~~and $33 million, respectively,~~respectively.

~~due to observa~~ble price changes of strategic investments, which are included in Other, net in the Company’s Condensed Consolidated Statement of Operations. For the three months ended April 2, 2021, there were 0 downward adjustments on strategic investments. For the nine months ended April 2, 2021, the Company recorded downward adjustments of $7 million to write down the carrying amount of certain investments to their fair value, which are included in Other, net in the Company’s Condensed Consolidated Statement of Operations. For the three months ended April 3, 2020, there were 0 downward adjustments on strategic investments. For the nine months ended April 3, 2020, the Company recorded a downward adjustment of $1 million in order to write down the carrying amount of an investment to its fair value. For the three and nine months ended April 3, 2020, there were 0~~upward adjustments for strategic investments.~~

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Other Fair Value Disclosures

The Company’s debt is carried at amortized cost. The estimated fair value of the Company’s debt is derived using the closing price of the same debt instruments as of the date of valuation, which takes into account the yield curve, interest rates and other observable inputs. Accordingly, these fair value measurements are categorized as Level 2. The following table presents the fair value and amortized cost of the Company’s debt in order of maturity:


		April 2, 2021				July 3, 2020					December 31, 2021				July 2, 2021
(Dollars in millions)	(Dollars in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		(Dollars in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
4.250% Senior Notes due March 2022		$	220	$	226	$	229	$	237
4.750% Senior Notes due June 2023		540		578		546		576
4.25% Senior Notes due March 2022										4.25% Senior Notes due March 2022	$	220	$	221	$	220	$	224
4.75% Senior Notes due June 2023										4.75% Senior Notes due June 2023	541		565		541		578
4.875% Senior Notes due March 2024	4.875% Senior Notes due March 2024	499		538		498		541		4.875% Senior Notes due March 2024	499		530		499		544
4.750% Senior Notes due January 2025		479		522		479		517
4.75% Senior Notes due January 2025										4.75% Senior Notes due January 2025	479		515		479		529
4.875% Senior Notes due June 2027	4.875% Senior Notes due June 2027	504		556		504		549		4.875% Senior Notes due June 2027	504		554		504		561
4.091% Senior Notes due June 2029	4.091% Senior Notes due June 2029	460		510		456		523		4.091% Senior Notes due June 2029	463		521		461		519
3.125% Senior Notes due July 2029	3.125% Senior Notes due July 2029	500		484		—		—		3.125% Senior Notes due July 2029	500		490		500		488
4.125% Senior Notes due January 2031	4.125% Senior Notes due January 2031	499		508		499		524		4.125% Senior Notes due January 2031	500		522		499		513
3.375% Senior Notes due July 2031	3.375% Senior Notes due July 2031	500		481		—		—		3.375% Senior Notes due July 2031	500		489		500		487
5.750% Senior Notes due December 2034		489		557		489		543
5.75% Senior Notes due December 2034										5.75% Senior Notes due December 2034	489		567		489		566
LIBOR Based Term Loan A1 due September 2025										LIBOR Based Term Loan A1 due September 2025	600		589		—		—
LIBOR Based Term Loan A2 due July 2027										LIBOR Based Term Loan A2 due July 2027	600		592		—		—
LIBOR Based Term Loan due September 2025	LIBOR Based Term Loan due September 2025	488		488		500		490		LIBOR Based Term Loan due September 2025	—		—		481		478
		5,178		5,448		4,200		4,500			5,895		6,155		5,173		5,487
Less: debt issuance costs		(36)		0		(25)		0
Less: unamortized debt issuance costs										Less: unamortized debt issuance costs	(34)		—		(34)		—
Debt, net of debt issuance costs	Debt, net of debt issuance costs	5,142		5,448		4,175		4,500		Debt, net of debt issuance costs	5,861		6,155		5,139		5,487
Less: current portion of debt, net of debt issuance costs		(245)		(251)		(19)		(19)
Less: current portion of debt										Less: current portion of debt	(235)		(236)		(245)		(249)
Long-term debt, less current portion, net of debt issuance costs	Long-term debt, less current portion, net of debt issuance costs	$	4,897	$	5,197	$	4,156	$	4,481	Long-term debt, less current portion, net of debt issuance costs	$	5,626	$	5,919	$	4,894	$	5,238

9.8.Equity

Share Capital

The Company’s authorized share capital is $13,500 and consists of 1,250,000,000 ordinary shares, par value $0.00001, of which ~~229,556,907~~219,463,688 shares were outstanding as of ~~April 2,~~December 31, 2021, and 100,000,000 preferred shares, par value $0.00001, of which ~~0ne~~none were issued or outstanding as of ~~April 2,~~December 31, 2021.

Ordinary shares—Holders of ordinary shares are entitled to receive dividends when declared by the Board of Directors. Upon any liquidation, dissolution, or winding up, after required payments are made to holders of preferred shares, any remaining assets will be distributed ratably to holders of the preferred and ordinary shares. Holders of shares are entitled to one vote per share on all matters upon which the ordinary shares are entitled to vote, including the election of directors.

Preferred shares—The Company may issue preferred shares in 1 or more series, up to the authorized amount, without shareholder approval. The Board of Directors is authorized to establish from time to time the number of shares to be included in each series, and to fix the rights, preferences and privileges of the shares of each wholly unissued series and any of its qualifications, limitations or restrictions. The Board of Directors can also increase or decrease the number of shares of a series, but not below the number of shares of that series then outstanding, without any further vote or action by the shareholders.

The Board of Directors may authorize the issuance of preferred shares with voting or conversion rights that could harm the voting power or other rights of the holders of the ordinary shares. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of the Company and might harm the market price of its ordinary shares and the voting and other rights of the holders of ordinary shares.

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Repurchases of Equity Securities

All repurchases are effected as redemptions in accordance with the Company’s Constitution.

~~The Company’s~~On May 14, 2021, STX’s Board of Directors ~~increased~~resolved to adopt and continue the ~~authorization for~~STUC Share Repurchase Program as its own and that the STX Board of Directors be authorized to effect the repurchase of ~~its outstanding~~STX ordinary shares ~~by $3.0 billion on October 21, 2020, and $2.0 billion on February 22, 2021.~~in an amount equal to the remaining STUC Share Repurchase Program amount as of the effective time of the scheme of arrangement. As of ~~April 2,~~December 31, 2021, ~~$4.4~~$3.3 billion remained available for repurchase under the existing repurchase authorization limit.

~~Table of Contents~~

The following table sets forth information with respect to repurchases of ordinary shares during the ~~nine~~six months ended ~~April 2,~~December 31, 2021:


(In millions)	(In millions)	Number of Shares Repurchased	Dollar Value of Shares Repurchased		(In millions)	Number of Shares Repurchased	Dollar Value of Shares Repurchased
Repurchases of ordinary shares(1)	Repurchases of ordinary shares(1)	30	$	1,830	Repurchases of ordinary shares(1)	10	$	905
Tax withholding related to vesting of equity awards	Tax withholding related to vesting of equity awards	1	33		Tax withholding related to vesting of equity awards	1	45
Total	Total	31	$	1,863	Total	11	$	950

(1) These amounts differ from the repurchases of ordinary shares amounts in the condensed consolidated statements of cash flows due to timing differences between repurchases and cash settlement thereof.

~~10.~~9.Revenue

The following table provides information about disaggregated revenue by sales channel and geographical region for the Company’s single reportable segment:


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended				For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		April 3, 2020		April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Revenues by Channel	Revenues by Channel									Revenues by Channel
Original equipment manufacturers		$	1,950	$	1,970	$	5,299	$	5,633
OEMs										OEMs	$	2,178	$	1,741	$	4,465	$	3,349
Distributors	Distributors	455		465		1,297		1,389		Distributors	562		475		1,069		842
Retailers	Retailers	326		283		1,072		970		Retailers	376		407		697		746
Total	Total	$	2,731	$	2,718	$	7,668	$	7,992	Total	$	3,116	$	2,623	$	6,231	$	4,937
Revenues by Geography (1)	Revenues by Geography (1)									Revenues by Geography (1)
Asia Pacific	Asia Pacific	$	1,268	$	1,257	$	3,680	$	3,912	Asia Pacific	$	1,433	$	1,306	$	3,016	$	2,412
Americas	Americas	939		938		2,582		2,534		Americas	1,186		838		2,265		1,643
EMEA	EMEA	524		523		1,406		1,546		EMEA	497		479		950		882
Total	Total	$	2,731	$	2,718	$	7,668	$	7,992	Total	$	3,116	$	2,623	$	6,231	$	4,937

(1) Revenue is attributed to ~~countries~~geography based on bill from locations.

~~11.~~10.Guarantees

~~Indemnifications of Officers and Directors~~

Seagate Technology, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Seagate-Cayman”) and wholly-owned subsidiary of STX, from time to time enters into indemnification agreements with the directors, officers, employees and agents of STX or any of its subsidiaries (each, an “Indemnitee”). The indemnification agreements provide indemnification in addition to any of Indemnitee’s indemnification rights under any relevant Articles of Association (or similar constitutional document), applicable law or otherwise, and indemnifies an Indemnitee for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts actually and reasonably incurred by him or her in any action or proceeding, including any action by or in the right of STX or any of its subsidiaries, arising out of his or her service as a director, officer, employee or agent of STX or any of its subsidiaries or of any other entity to which he or she provides services at the Company’s request. However, Indemnitees are not indemnified under the indemnification agreements for (i) any fraud or dishonesty in the performance of Indemnitee’s duty to STX or the applicable subsidiary or (ii) Indemnitee’s conscious, intentional or willful failure to act honestly, lawfully and in good faith with a view to the best interests of the Company. In addition, the indemnification agreements provide that Seagate-Cayman will advance expenses incurred by an Indemnitee in connection with enforcement of the indemnification agreement or with the investigation, settlement or appeal of any action or proceeding against him or her as to which he or she could be indemnified.

The nature of these indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay on behalf of its officers and directors. Historically, the Company has not made any significant indemnification payments under such indemnification agreements and 0 amount has been accrued in the Company’s condensed consolidated financial statements with respect to these indemnification obligations.

~~Table of Contents~~

Indemnification Obligations

The Company from time to time enters into agreements with customers, suppliers, partners and others in the ordinary course of business that provide indemnification for certain matters including, but not limited to, intellectual property infringement claims, environmental claims and breach of agreement claims. The nature of the Company’s indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any significant indemnification payments under such agreements and 0no amount has been accrued in the Company’s condensed consolidated financial statements with respect to these indemnification obligations.

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Product Warranty

The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally warrants its products for a period of 1 to 5 years. The Company uses estimated repair or replacement costs and uses statistical modeling to estimate product warranty return rates in order to determine its warranty obligation. Changes in the Company’s product warranty liability during the ~~nine~~six months ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 were as follows:


		For the Nine Months Ended					For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		January 1, 2021
Balance, beginning of period	Balance, beginning of period	$	151	$	195	Balance, beginning of period	$	136	$	151
Warranties issued	Warranties issued	56		67		Warranties issued	43		37
Repairs and replacements	Repairs and replacements	(62)		(65)		Repairs and replacements	(43)		(42)
Changes in liability for pre-existing warranties, including expirations	Changes in liability for pre-existing warranties, including expirations	(11)		(34)		Changes in liability for pre-existing warranties, including expirations	8		(9)
Balance, end of period	Balance, end of period	$	134	$	163	Balance, end of period	$	144	$	137

~~12.~~11.Earnings Per Share

Basic earnings per share is computed by dividing income available to shareholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing income available to shareholders by the weighted-average number of shares outstanding during the period and the number of additional shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding options, unvested restricted share units and performance-based share units and shares to be purchased under the Company’s Employee Stock Purchase Plan. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in fair market value of the Company’s share price can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted net income per share attributable to the shareholders of the Company:

For the Three Months Ended For the Nine Months Ended
(In millions, except per share data) April 2,
2021 April 3,
2020 April 2,
2021 April 3,
2020
Numerator:
Net income $ 329 $ 320 $ 832 $ 838
Number of shares used in per share calculations:
Total shares for purposes of calculating basic net income per share 233 261 246 263
Weighted-average effect of dilutive securities:
Employee equity award plans 4 2 3 3
Total shares for purpose of calculating diluted net income per share 237 263 249 266
Net income per share:
Basic $ 1.41 $ 1.23 $ 3.38 $ 3.19
Diluted 1.39 1.22 3.34 3.15


	For the Three Months Ended				For the Six Months Ended
(In millions, except per share data)	December 31, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Numerator:
Net income	$	501	$	280	$	1,027	$	503
Number of shares used in per share calculations:
Total shares for purposes of calculating basic net income per share	221		249		224		253
Weighted-average effect of dilutive securities:
Employee equity award plans	4		2		4		2
Total shares for purpose of calculating diluted net income per share	225		251		228		255
Net income per share:
Basic	$	2.27	$	1.12	$	4.58	$	1.99
Diluted	2.23		1.12		4.50		1.97

The anti-dilutive shares related to employee equity award plans that were excluded from the computation of diluted net income per share were not material for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020.~~January 1, 2021.

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~~13.~~12.Legal, Environmental and Other Contingencies

The Company assesses the probability of an unfavorable outcome of all its material litigation, claims or assessments to determine whether a liability had been incurred and whether it is probable that one or more future events will occur confirming the fact of the loss. In the event that an unfavorable outcome is determined to be probable and the amount of the loss can be reasonably estimated, the Company establishes an accrual for the litigation, claim or assessment. In addition, in the event an unfavorable outcome is determined to be less than probable, but reasonably possible, the Company will disclose an estimate of the possible loss or range of such loss; however, when a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Litigation is inherently uncertain and may result in adverse rulings or decisions. Additionally, the Company may enter into settlements or be subject to judgments that may, individually, or in the aggregate, have a material adverse effect on its results of operations. Accordingly, actual results could differ materially.

Litigation

~~Convolve, Inc. (“Convolve”) and Massachusetts Institute of Technology (“MIT”) v. Seagate Technology LLC, et al.~~ On July 13, 2000, Convolve and MIT filed suit against Compaq Computer Corporation and Seagate Technology LLC in the U.S. District Court for the Southern District of New York, alleging infringement of U.S. Patent No. 4,916,635 (the “‘635 patent”) and U.S. Patent No. 5,638,267 (the “‘267 patent”), misappropriation of trade secrets, breach of contract, and other claims. On January 16, 2002, Convolve filed an amended complaint, alleging defendants were infringing U.S. Patent No. 6,314,473 (the “‘473 patent”). The district court ruled in 2010 that the ‘267 patent was out of the case.

On August 16, 2011, the district court granted in part and denied in part the Company’s motion for summary judgment. On July 1, 2013, the U.S. Court of Appeals for the Federal Circuit: 1) affirmed the district court’s summary judgment rulings that the Company did not misappropriate any of the alleged trade secrets and that the asserted claims of the ‘635 patent are invalid; 2) reversed and vacated the district court’s summary judgment of non-infringement with respect to the ‘473 patent; and 3) remanded the case for further proceedings on the ‘473 patent. On July 11, 2014, the district court granted the Company’s further summary judgment motion regarding the ‘473 patent. On February 10, 2016, the U.S. Court of Appeals for the Federal Circuit: 1) affirmed the district court’s summary judgment of no direct infringement by the Company because the Company’s ATA/SCSI disk drives do not meet the “user interface” limitation of the asserted claims of the ‘473 patent; 2) affirmed the district court’s summary judgment of non-infringement by Compaq’s products as to claims 1, 3, and 5 of the ‘473 patent because Compaq’s F10 BIOS interface does not meet the “commands” limitation of those claims; 3) vacated the district court’s summary judgment of non-infringement by Compaq’s accused products as to claims 7-15 of the ‘473 patent; 4) reversed the district court’s summary judgment of non-infringement based on intervening rights; and 5) remanded the case to the district court for further proceedings on the ‘473 patent. In view of the rulings made by the district court and the Court of Appeals and the uncertainty regarding the amount of damages, if any, that could be awarded Convolve in this matter, the Company does not believe that it is currently possible to determine a reasonable estimate of the possible range of loss related to this matter.

Lambeth Magnetic Structures LLC v. Seagate Technology (US) Holdings, Inc., et al. On April 29, 2016, Lambeth Magnetic Structures LLC filed a complaint against Seagate Technology (US) Holdings, Inc. and Seagate Technology LLC in the U.S. District Court for the Western District of Pennsylvania, alleging infringement of U.S. Patent No. 7,128,988, “Magnetic Material Structures, Devices and Methods.” The complaint seeks damages as well as additional relief. The Company believes the claims asserted in the complaint are without merit and intends to vigorously defend this case. The court issued its claim construction ruling on October 18, 2017. The trial is scheduled to begin on ~~February 7,~~April 4, 2022. While the possible range of loss for this matter remains uncertain, the Company estimates the amount of loss to be immaterial to the financial statements.

Seagate Technology LLC, et al. v. NHK Spring Co. Ltd. and TDK Corporation, et al. On February 18, 2020, Seagate Technology LLC, Seagate Technology (Thailand) Ltd., Seagate Singapore International Headquarters Pte. Ltd., and Seagate Technology International filed a complaint in the United States District Court for the Northern District of California against defendant suppliers of HDD suspension assemblies. Defendants include NHK Spring Co. Ltd., TDK Corporation, Hutchinson Technology Inc., and several of their subsidiaries and affiliates. The complaint includes federal and state antitrust law claims, as well as a breach of contract claim. The complaint alleges that defendants and their co-conspirators knowingly conspired for more than twelve years not to compete in the supply of suspension assemblies; that defendants misused confidential information that the Company had provided pursuant to nondisclosure agreements, in breach of their contractual obligations; and that the Company paid artificially high prices on its purchases of suspension assemblies. The Company seeks to recover the overcharges it paid for suspension assemblies, as well as additional relief permitted by law.

~~Table of Contents~~

Nidec Corporation v. Seagate Technology LLC, et al. On January 18, 2021, Nidec Corporation (“Nidec”) filed a complaint against Seagate Technology LLC, Seagate Singapore International Headquarters Pte. Ltd., and Seagate Technology (Netherlands) B.V. in the United States District Court for the District of Delaware, alleging infringement of the following patents: U.S. Patent No. 8,737,017, titled “Spindle Motor and Disk Drive Apparatus,” U.S. Patent No. 9,742,239, titled “Spindle Motor and Disk Drive Apparatus,” U.S. Patent No. 9,935,528, titled “Spindle Motor and Disk Drive Apparatus,” U.S. Patent No. 10,407,775, titled “Base Plate, Hard Disk Drive, and Method of Manufacturing Base Plate,” and U.S. Patent No. 10,460,767, titled “Base Member Including Information Mark and Insulating Coating Layer, and Disk Drive Apparatus Including the Same.” ~~The~~(the “Delaware Action”). On March 22, 2021, Seagate initiated JAMS arbitration against Nidec under the arbitration clause of the covenant agreement between Seagate and Nidec. On July 20, 2021, the court stayed the Delaware Action pending the result of arbitration between the parties.On November 9, 2021, following a five-day arbitration hearing, the JAMS arbitration panel decided in favor of Seagate on all issues and directed Nidec to dismiss the Delaware Action.On November 15, 2021, Nidec dismissed its complaint ~~seeks unspecified compensatory damages and other relief. The Company believes the claims asserted~~ in the complaint are without merit and intends to vigorously defend this case. The Company does not believe that it is currently possible to determine a reasonable estimate of the possible range of loss related to this matter.Delaware Action with prejudice.

Environmental Matters

The Company’s operations are subject to U.S. and foreign laws and regulations relating to the protection of the environment, including those governing discharges of pollutants into the air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. Some of the Company’s operations require environmental permits and controls to prevent and reduce air and water pollution, and these permits are subject to modification, renewal and revocation by issuing authorities.

The Company has established environmental management systems and continually updates its environmental policies and standard operating procedures for its operations worldwide. The Company believes that its operations are in material compliance with applicable environmental laws, regulations and permits. The Company budgets for operating and capital costs on an ongoing basis to comply with environmental laws. If additional or more stringent requirements are imposed on the Company in the future, it could incur additional operating costs and capital expenditures.

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Some environmental laws, such as the Comprehensive Environmental Response Compensation and Liability Act of 1980 (as amended, the “Superfund” law) and its state equivalents, can impose liability for the cost of cleanup of contaminated sites upon any of the current or former site owners or operators or upon parties who sent waste to these sites, regardless of whether the owner or operator owned the site at the time of the release of hazardous substances or the lawfulness of the original disposal activity. The Company has been identified as a responsible or potentially responsible party at several sites. At each of these sites, the Company has an assigned portion of the financial liability based on the type and amount of hazardous substances disposed of by each party at the site and the number of financially viable parties. The Company has fulfilled its responsibilities at some of these sites and remains involved in only a few at this time.

While the Company’s ultimate costs in connection with these sites is difficult to predict with complete accuracy, based on its current estimates of cleanup costs and its expected allocation of these costs, the Company does not expect costs in connection with these sites to be material.

The Company may be subject to various state, federal and international laws and regulations governing the environment, including those restricting the presence of certain substances in electronic products. For example, the European Union (“EU”) enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (2011/65/EU), which prohibits the use of certain substances, including lead, in certain products, including disk drives and server storage products, put on the market after July 1, 2006. Similar legislation has been or may be enacted in other jurisdictions, including in the U.S., Canada, Mexico, Taiwan, China, Japan and others. The EU REACH Directive (Registration, Evaluation, Authorization, and Restriction of Chemicals, EC 1907/2006) also restricts substances of very high concern in products. If the Company or its suppliers fails to comply with the substance restrictions, recycle requirements or other environmental requirements as they are enacted worldwide, it could have a materially adverse effect on the Company’s business.

Other Matters

The Company is involved in a number of other judicial, regulatory or administrative proceedings and investigations incidental to its business, and the Company may be involved in such proceedings and investigations arising in the normal course of its business in the future. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on its financial position or results of operations.

13.Commitments

~~Table~~Unconditional Long-Term Purchase Obligations. As of ~~Contents~~December 31, 2021, the Company had unconditional long-term purchase obligations of approximately $495 million, primarily related to purchases of minimum quarterly amounts of inventory components. The Company expects the commitment to total $259 million, $162 million, $33 million, $26 million and $15 million for fiscal years 2023, 2024, 2025, 2026 and thereafter, respectively.

14.Subsequent Events

Dividend Declared

On ~~April 22, 2021,~~January 26, 2022, the Company’s Board of Directors declared a quarterly cash dividend of ~~$0.67~~$0.70 per share, which will be payable on ~~July 7, 2021~~April 6, 2022 to shareholders of record as of the close of business on ~~May 12, 2021~~March 22, 2022.

~~Corporate Reorganization~~

On April 14, 2021, the Company held a special Irish High Court-convened meeting of shareholders and an extraordinary general meeting of shareholders, (together, the “Shareholder Meetings”), relating to the planned corporate reorganization whereby a new Irish public limited company, Seagate Technology Holdings plc (“Holdings”), will serve as the publicly traded parent company of the Company. The reorganization will be carried out pursuant to a scheme of arrangement (“Scheme”) under Irish law, which will result in the exchange of ordinary shares of Holdings for ordinary shares in the Company on a one-for-one basis. The shareholders approved the Scheme and related proposals at the Shareholder Meetings. The Irish High Court hearing to approve the Scheme will be held on May 18, 2021 and the transaction is expected to be completed in the fiscal quarter ending October 1, 2021.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition, changes in financial condition and results of operations for our fiscal quarters ended ~~April 2,~~December 31, 2021, October 1, 2021 and January 1, 2021, ~~and April 3, 2020,~~ referred to herein as the ~~“March~~“December 2021 quarter,” the ~~“December 2020~~“September 2021 quarter,” and the ~~“March~~“December 2020 quarter,” respectively. We operate and report financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. The ~~March~~December 2021 quarter, the ~~December 2020~~September 2021 quarter and the ~~March~~December 2020 quarter were each 13 weeks.

You should read this discussion in conjunction with financial information and related notes included elsewhere in this report. Unless the context indicates otherwise, as used herein, the terms “we,” “us,” “Seagate,” the “Company” and “our” refer collectively to Seagate Technology Holdings plc, an Irish public limited company, and its subsidiaries. References to “$” or “dollars” are to United States dollars.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical fact. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, among other things, statements about our plans, strategies and prospects; market demand for our products; shifts in technology; estimates of industry growth; effects of the economic conditions worldwide resulting from the COVID-19 pandemic; our ~~plans and expectations regarding our corporate reorganization, including our expectations related to our ability to make repurchases and pay dividends; our~~ ability to effectively manage our cash liquidity position and debt obligations, and comply with the covenants in our credit facilities; our restructuring efforts; the sufficiency of our sources of cash to meet cash needs for the next 12 months; our expectations regarding capital expenditures; and projected cost savings for the fiscal year ending July ~~2, 2021.~~1, 2022. Forward-looking statements generally can be identified by words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “may,” “will,” “will continue,” “can,” “could,” or negative of these words, variations of these words and comparable terminology. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements are based on information available to the Company as of the date of this Quarterly Report on Form 10-Q and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties and other factors may be beyond our control and may pose a risk to our operating and financial condition. Such risks and uncertainties include, but are not limited to:

•the uncertainty in global economic and political ~~conditions;~~conditions, or adverse changes in the level of economic activity in the major regions in which we do business;

•the development and introduction of products based on new technologies and expansion into new data storage markets and market acceptance of new products;

•the impact of competitive product announcements and unexpected advances in competing technologies or changes in market trends;

•the impact of variable demand, including ongoing demand variation related to the COVID-19 pandemic, changes in market demand and an adverse pricing environment for storage products;

•the effects of the COVID-19 pandemic and related individual, business and government responses on the global economy and their impact ~~of trade barriers, such as import/export duties~~on the Company’s business, operations and ~~restrictions, tariffs~~financial results, including impacts to the Company’s supply chain resulting from governments’ policies and ~~quotas, imposed by the U.S. or other countries in which the Company conducts business;~~approaches to containing COVID-19;

•the Company’s ability to effectively manage its debt obligations and comply with certain covenants in its credit facilities with respect to financial ratios and financial condition tests and its ability to maintain a favorable cash liquidity position;

•the Company’s ability to successfully qualify, manufacture and sell its storage products in increasing volumes on a cost-effective basis and with acceptable quality;

•any price erosion or volatility of sales volumes through the Company’s distributor and retail channel;

•~~the effects of the outbreak of COVID-19 and related individual, business and government responses on the global economy and their impact on the Company’s business, operations and financial results;~~

•disruptions to the Company’s supply chain or production ~~capabilities;~~capabilities, including ongoing shortages of certain materials, any electricity restrictions and related increases in logistics and operation costs;

•currency fluctuations that may impact the Company’s margins, international sales and results of operations;

•changes in tax laws, such as global tax developments applicable to multinational businesses; the impact of trade barriers, such as import/export duties and restrictions, sanctions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts business; the evolving legal and regulatory, economic, environmental and administrative climate in the international markets where the Company operates; and

•cyber-attacks or other data breaches that disrupt the Company’s operations or result in the dissemination of proprietary or confidential information and cause reputational harm.

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Information concerning these and other risks, uncertainties and factors, among others, that could cause results to differ materially from our expectations are described in this Quarterly Report on Form 10-Q and in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended July ~~3, 2020,~~2, 2021, which we encourage you to carefully read. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date on which they were made, and we undertake no obligation to update forward-looking statements except as required by law.

~~Table of Contents~~

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. Our MD&A is organized as follows:

•Overview of the ~~March~~December 2021 quarter. Highlights of events in the ~~March~~December 2021 quarter that impacted our financial position.

•Results of Operations. Analysis of our financial results comparing the ~~March~~December 2021 quarter to the ~~December 2020~~September 2021 quarter and the ~~March~~December 2020 quarter.

•Liquidity and Capital Resources. An analysis of changes in our balance sheet and cash flows, and discussion of our financial condition including potential sources of liquidity.

•Critical Accounting Policies. Accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

For an overview of our business, see “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies—Organization”.

Overview of the ~~March~~December 2021 quarter

During the ~~March~~December 2021 quarter, we shipped ~~140~~163 exabytes of HDD storage capacity. We generated revenue of approximately ~~$2.7~~$3.1 billion ~~and~~with a gross margin of ~~27%~~30% and our operating cash flow was $~~378~~521 million. We borrowed $1.2 billion under our term loan facility and fully repaid the $475 million principal amount outstanding of our .September 2019 Term Loan. We repurchased approximately 115 million of our ordinary shares for ~~$751~~$471 million and paid ~~$161~~$151 million in dividends.

Impact of COVID-19

The COVID-19 pandemic has resulted in a widespread health crisis and numerous disease control measures ~~are~~ being taken to limit its spread, the effects of which began during ~~the March 2020 quarter.~~our quarter ended April 3, 2020. We continued to ~~incur~~experience certain supply chain ~~and demand~~ disruptions during the ~~March~~December 2021 quarter, as well as higher logistics and operational costs ~~and softer demand across certain markets~~ due to the COVID-19 pandemic, including supply chain constraints, which we expect to continue ~~during~~at least for the remainder of fiscal year ~~2021.~~ 2022.Our customers also continued to experience certain supply chain and demand disruptions during the ~~March~~December 2021 quarter, resulting in demand variations across certain of our end markets, which we anticipate will continue ~~during~~at least for the remainder of fiscal year ~~2021.~~2022. We are continuing to actively monitor the effects and potential impacts of the COVID-19 pandemic on all aspects of our business, supply chain, liquidity and capital ~~resources.~~resources, including governmental policies that could periodically shut down an entire city where we, our suppliers or our customers operate. We are ~~complying with governmental rules and guidelines across all of our sites and are~~also actively working on opportunities to lower our cost structure and drive further operational efficiencies. We are complying with governmental rules and guidelines across all of our sites. Although we are unable to predict the future impact of COVID-19 on our business, results of operations, liquidity or capital resources at this time, we expect we will continue to be negatively affected if the pandemic and related public and private health measures result in substantial manufacturing or supply chain problems, substantial reductions in demand due to disruptions in the operations of our customers or partners, disruptions in local and global economies, volatility in the global financial markets, sustained reductions or volatility in overall demand trends, restrictions on the export or shipment of our products, or other unexpected ramifications from the COVID-19 pandemic. For a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, see the section entitled ~~“Item 1A. Risk~~“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended July ~~3, 2020.~~

~~Corporate Reorganization~~

2, 2021.

As previously disclosed in the proxy statement filed by the Company with the SEC on March 3, 2021 (the “Proxy Statement”), we have decided to effect a corporate reorganization whereby a new Irish public limited company, Seagate Technology Holdings plc (“Holdings”), will serve as the publicly traded parent company of Seagate. The reorganization will be carried out pursuant to a scheme of arrangement (the “Scheme”) under Irish law, which will result in the exchange of ordinary shares of Holdings for ordinary shares in the Company on a one-for-one basis. The purpose of the transaction is to allow us to maintain our ability to make future distributions to our shareholders, including making dividend payments and effecting share redemptions and repurchases. On April 14, 2021, Seagate held a special Irish High Court-convened meeting of shareholders and an extraordinary general meeting of shareholders, each as described in the Proxy Statement, where the shareholders approved the Scheme and the related proposals. The Irish High Court hearing to approve the Scheme will be held on May 18, 2021 and we expect to complete the transaction in the fiscal quarter ending October 1, 2021.

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Results of Operations

We list in the tables below summarized information from our Condensed Consolidated Statements of Operations by dollars and as a percentage of revenue:


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended						For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		January 1, 2021		April 3, 2020		April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		October 1, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Revenue	Revenue	$	2,731	$	2,623	$	2,718	$	7,668	$	7,992	Revenue	$	3,116	$	3,115	$	2,623	$	6,231	$	4,937

Cost of revenue	Cost of revenue	1,991		1,927		1,972		5,636		5,817		Cost of revenue	2,168		2,159		1,927		4,327		3,645
Gross profit	Gross profit	740		696		746		2,032		2,175		Gross profit	948		956		696		1,904		1,292
Product development	Product development	227		221		246		671		751		Product development	228		233		221		461		444
Marketing and administrative	Marketing and administrative	126		122		119		366		361		Marketing and administrative	136		133		122		269		240
Amortization of intangibles	Amortization of intangibles	3		3		3		9		11		Amortization of intangibles	3		3		3		6		6
Restructuring and other, net	Restructuring and other, net	(2)		2		2		1		19		Restructuring and other, net	1		1		2		2		3

Income from operations	Income from operations	386		348		376		985		1,033		Income from operations	580		586		348		1,166		599
Other expense, net	Other expense, net	(47)		(57)		(38)		(134)		(161)		Other expense, net	(66)		(53)		(57)		(119)		(87)
Income before income taxes	Income before income taxes	339		291		338		851		872		Income before income taxes	514		533		291		1,047		512
Provision for income taxes	Provision for income taxes	10		11		18		19		34		Provision for income taxes	13		7		11		20		9
Net income	Net income	$	329	$	280	$	320	$	832	$	838	Net income	$	501	$	526	$	280	$	1,027	$	503

For the Three Months Ended For the Nine Months Ended
April 2,
2021 January 1,
2021 April 3,
2020 April 2,
2021 April 3,
2020
Revenue 100 % 100 % 100 % 100 % 100 %
Cost of revenue 73 73 73 73 73
Gross margin 27 27 27 27 27
Product development 8 9 9 9 9
Marketing and administrative 5 5 4 5 5
Amortization of intangibles — — — — —
Restructuring and other, net — — — — —
Operating margin 14 13 14 13 13
Other expense, net (2) (2) (1) (2) (2)
Income before income taxes 12 11 13 11 11
Provision for income taxes — — 1 — 1
Net income 12 % 11 % 12 % 11 % 10 %


	For the Three Months Ended						For the Six Months Ended
	December 31, 2021		October 1, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Revenue	100	%	100	%	100	%	100	%	100	%
Cost of revenue	70		69		73		69		74
Gross margin	30		31		27		31		26
Product development	7		8		9		8		9
Marketing and administrative	4		4		5		4		5
Amortization of intangibles	—		—		—		—		—
Restructuring and other, net	—		—		—		—		—
Operating margin	19		19		13		19		12
Other expense, net	(3)		(2)		(2)		(2)		(2)
Income before income taxes	16		17		11		17		10
Provision for income taxes	—		—		—		—		—
Net income	16	%	17	%	11	%	17	%	10	%

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Revenue

The following table summarizes information regarding consolidated revenues by channel, geography and market and HDD exabytes shipped by market and ~~HDD~~ price per terabyte:


		For the Three Months Ended									For the Nine Months Ended							For the Three Months Ended									For the Six Months Ended
		April 2, 2021			January 1, 2021			April 3, 2020			April 2, 2021			April 3, 2020				December 31, 2021			October 1, 2021			January 1, 2021			December 31, 2021			January 1, 2021
Revenues by Channel (%)	Revenues by Channel (%)																Revenues by Channel (%)
Original equipment manufacturers		71		%	66		%	73		%	69		%	71		%
OEMs																	OEMs	70		%	74		%	66		%	72		%	68		%
Distributors	Distributors	17		%	18		%	17		%	17		%	17		%	Distributors	18		%	16		%	18		%	17		%	17		%
Retailers	Retailers	12		%	16		%	10		%	14		%	12		%	Retailers	12		%	10		%	16		%	11		%	15		%
Revenues by Geography (%)(1)	Revenues by Geography (%)(1)																Revenues by Geography (%)(1)
Asia Pacific	Asia Pacific	47		%	50		%	46		%	48		%	49		%	Asia Pacific	46		%	51		%	50		%	48		%	49		%
Americas	Americas	34		%	32		%	35		%	34		%	32		%	Americas	38		%	35		%	32		%	36		%	33		%
EMEA	EMEA	19		%	18		%	19		%	18		%	19		%	EMEA	16		%	14		%	18		%	16		%	18		%
Revenues by Market (%)	Revenues by Market (%)																Revenues by Market (%)
Mass capacity	Mass capacity	60		%	58		%	57		%	59		%	51		%	Mass capacity	66		%	65		%	58		%	65		%	58		%
Legacy	Legacy	32		%	35		%	36		%	33		%	42		%	Legacy	25		%	27		%	35		%	26		%	34		%
Other	Other	8		%	7		%	7		%	8		%	7		%	Other	9		%	8		%	7		%	9		%	8		%

HDD Exabytes Shipped by Market	HDD Exabytes Shipped by Market																HDD Exabytes Shipped by Market
Mass capacity	Mass capacity	111			97			91			294			226			Mass capacity	137			132			97			269			183
Legacy	Legacy	29			32			29			89			99			Legacy	26			27			32			53			60
Total	Total	140			129			120			383			325			Total	163			159			129			322			243

HDD Price per Terabyte	HDD Price per Terabyte	$	18		$	19		$	21		$	18		$	23		HDD Price per Terabyte	$	17		$	18		$	19		$	18		$	19

(1) Revenue is attributed to geography based on bill from locations.

Revenue in the ~~March~~December 2021 quarter remained relatively flat from the September 2021 quarterprimarily due to a higher demand for our non-HDD products and an increase in mass capacity storage exabytes shipped, offset by a decrease in legacy market exabytes shipped and a decrease in price per terabyte.

Revenue in the December 2021 quarter increased by ~~$108~~$493 million from the December 2020 quarter primarily due to an increase in mass capacity storage exabytes shipped, partially offset by a decrease in legacy market exabytes shipped.

Revenue for the six months ended December 31, 2021 increased by $1,294 million from the six months ended January 1, 2021 primarily due to an increase in mass capacity storage exabytes shipped, partially offset by a decrease in legacy market exabytes shipped.

~~Revenue in the March 2021 quarter increased by $13 million from the March 2020 quarter primarily due~~ to ~~an increase in mass capacity storage exabytes shipped and favorable product mix, partially offset by price erosion.~~

~~Revenue for the nine months ended April 2, 2021 decreased by $324 million from the nine months ended April 3, 2020 primarily as a result~~

Table of ~~price erosion, a decrease in legacy market exabytes shipped and lower demand as a result of the COVID-19 pandemic, partially offset by an increase in mass capacity storage exabytes shipped.~~Contents

We maintain various sales incentive programs such as channel and ~~original equipment manufacturers~~OEM rebates. Sales incentive programs were approximately 14% of gross revenue for the ~~March~~December 2021 quarter, 13% for the September 2021 quarter and 15% for the December ~~2020 quarter and 11% for the March~~ 2020 quarter. Adjustments to revenues due to under or over accruals for sales incentive programs related to revenues reported in prior quarterly periods were less than 1% of quarterly gross revenue in all periods presented.

Cost of Revenue and Gross Margin


		For the Three Months Ended									For the Nine Months Ended							For the Three Months Ended									For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021			January 1, 2021			April 3, 2020			April 2, 2021			April 3, 2020			(Dollars in millions)	December 31, 2021			October 1, 2021			January 1, 2021			December 31, 2021			January 1, 2021
Cost of revenue	Cost of revenue	$	1,991		$	1,927		$	1,972		$	5,636		$	5,817		Cost of revenue	$	2,168		$	2,159		$	1,927		$	4,327		$	3,645
Gross profit	Gross profit	740			696			746			2,032			2,175			Gross profit	948			956			696			1,904			1,292
Gross margin	Gross margin	27		%	27		%	27		%	27		%	27		%	Gross margin	30		%	31		%	27		%	31		%	26		%

Gross margin for the ~~March~~December 2021 quarter ~~remained flat~~decreased compared to the September 2021 quarter primarily due to a decrease in price per terabyte and higher component and logistics costs resulting from the pandemic, partially offset by favorable mix in HDD products.

Gross margin for the December 2021 quarter increased compared to the December 2020 quarter primarily due to improved product mix, partially offset by higher component and ~~March 2020 quarter.~~logistics costs resulting from the pandemic.

Gross margin for the ~~nine~~six months ended ~~April 2,~~December 31, 2021 ~~remained flat~~increased compared to the ~~nine~~six months ended ~~April 3, 2020.~~January 1, 2021 primarily driven by improved product mix, partially offset by higher component and logistics costs resulting from the pandemic.

~~Table of Contents~~

In the ~~March~~December 2021 quarter, total warranty cost was ~~0.6%~~0.8% of revenue and included ~~a favorable~~an unfavorable change in estimates of prior warranty accruals of 0.1% of revenue primarily due to ~~a decrease in the number of drives under warranty.~~changes to our estimated future product return rates. Warranty cost related to new shipments was 0.7%, 0.7% and ~~0.8%~~0.7% of revenue for the ~~March~~December 2021 quarter, ~~December 2020~~September 2021 quarter and ~~March~~December 2020 quarter, respectively.

Operating Expenses


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended						For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		January 1, 2021		April 3, 2020		April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		October 1, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Product development	Product development	$	227	$	221	$	246	$	671	$	751	Product development	$	228	$	233	$	221	$	461	$	444

Marketing and administrative	Marketing and administrative	126		122		119		366		361		Marketing and administrative	136		133		122		269		240

Amortization of intangibles	Amortization of intangibles	3		3		3		9		11		Amortization of intangibles	3		3		3		6		6

Restructuring and other, net	Restructuring and other, net	(2)		2		2		1		19		Restructuring and other, net	1		1		2		2		3
Operating expenses	Operating expenses	$	354	$	348	$	370	$	1,047	$	1,142	Operating expenses	$	368	$	370	$	348	$	738	$	693

Product development expense. Product development expense for the ~~March~~December 2021 quarter ~~increased~~decreased by $6$5 millioncompared to the September 2021 quarter primarily due to a $6 million decrease in variable compensation expense and a $3 million decrease in compensation and other employee benefits, partially offset by a $4 million increase in materials expense.

Product development expense increased by $7 million in the December 2021 quarter compared to the December 2020 quarter primarily due to a $4$7 million increase in materials expense and a $3 million increase in compensation and other employee benefits, partially offset by a $5 million decrease in outside services.

Product development expense increased by $17 million for the six months ended December 31, 2021 compared to the six months ended January 1, 2021 primarily due to a $10 million increase in materials expense, an $8 million increase in variable compensation expense and a $3 million increase in ~~materials and tooling costs.~~

~~Product development expense decreased by $19 million in the March 2021 quarter compared to the March 2020 quarter primarily due to a $10 million decrease in~~ compensation and other employee benefits, ~~from the reduction in headcount as a result of our June 2020 restructuring plan, a $5 million decrease in materials expense, a $5 million decrease in information technology and software costs and a $4~~partially offset by an $8 million decrease in outside ~~services partially offset by a $6 million increase related to timing~~services.

Table of ~~grants received.~~Contents

~~Product development expense decreased by $80 million for the~~ ~~nine months ended April 2, 2021 compared to the nine months ended April 3, 2020 primarily due to a $46 million decrease in compensation and other employee benefits~~ from the reduction in headcount as a result of our June 2020 restructuring plan and the additional fourteenth week in the quarter ended October 4, 2019, a $14 million decrease in information technology and software costs, a $9 million decrease in travel and entertainment expenses mainly as a result of the disruptions related to COVID-19, a $7 million decrease in materials expense, a $4 million decrease in outside services and a $3 million decrease in equipment expense,~~partially offset by a $9 million increase in variable compensation expense.~~

Marketing and administrative expense. Marketing and administrative expense increased by $4$3 million for the ~~March~~December 2021 quarter compared to the September 2021 quarter primarily due to a $3 million increase in advertising costs and a $2 million increase in compensation and other employee benefits, partially offset by a $3 million decrease in variable compensation expense.

Marketing and administrative expense increased by $14 million in the December 2021 quarter compared to the December 2020 quarter primarily due to a $5 million increase in ~~outside services expense.~~compensation and other employee benefits, a $4 million increase in advertising costs and a $2 million increase in travel expenses.

Marketing and administrative expense increased by ~~$7 million in the~~ ~~March 2021 quarter compared to the~~ March 2020 quarter primarily due to an $10 million increase in information technology and software costs, partially offset by a $3 million decrease in depreciation expense and a $2 million decrease in travel and entertainment expenses mainly as a result of disruptions related to COVID-19.

~~Marketing and administrative expense increased by $5~~$29 million for the ~~nine~~six months ended ~~April 2,~~December 31, 2021 compared to the ~~nine~~six months ended ~~April 3, 2020~~January 1, 2021 primarily due to a ~~$31~~$7 million increase in ~~information technology~~compensation and ~~software costs and~~other employee benefits, a $6 million increase in variable compensation expense, ~~partially offset by an $13~~a $5 million ~~decrease~~increase in ~~travel expenses mainly as~~advertising costs and a ~~result of disruptions related to COVID-19, a $9~~$4 million ~~decrease~~increase in ~~depreciation expense and an $8 million decrease in compensation and other employee benefits~~ ~~from the additional fourteenth week in the quarter ended October 4, 2019~~.outside services.

Amortization of intangibles. Amortization of intangibles for the ~~March~~December 2021 quarter remained flat compared to the ~~December 2020~~September 2021 quarter.

Amortization of intangibles for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021 remained flat, ~~and decreased by $2 million, respectively,~~ compared to the three and ~~nine~~six months ended ~~April 3, 2020, due to certain intangible assets that reached the end of their useful lives.~~January 1, 2021, respectively.

Restructuring and other, net. Restructuring and other, net was not material for ~~the three and nine months ended April 2, 2021 and three months ended April 3, 2020 were not material.~~any periods presented.

~~Restructuring and other, net for the nine months ended April 3, 2020 was comprised of charges primarily related to a voluntary early exit program.~~

~~Table of Contents~~

Other Expense, Net


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended						For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		January 1, 2021		April 3, 2020		April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		October 1, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Other expense, net	Other expense, net	$	(47)	$	(57)	$	(38)	$	(134)	$	(161)	Other expense, net	$	(66)	$	(53)	$	(57)	$	(119)	$	(87)

Other expense, net. Other expense, net for the ~~March~~December 2021 quarter ~~decreased~~increased by ~~$10~~$13 million from the September 2021 quarter primarily due to a non-recurring gain of $9 million from our strategic investments in the September 2021 quarter and a $3 million increase in interest expense from the net issuance of long-term debt in the December 2021 quarter.

Other expense, net for the December 2021 quarter increased by $9 million compared to the December 2020 quarter primarily due to a $10 ~~million strategic investment upward adjustment~~ ~~in the~~ ~~March 2021 quarter and~~ ~~a $7 million impairment charge in the December 2020 quarter, partially offset by a $6~~ million increase in interest expense from the issuance of long-term debt and a $2 million decrease in ~~the December 2020 quarter.~~gain from foreign exchange transactions and remeasurements, net of cash flow hedges, partially offset by a $5 million decrease in losses from our strategic investments.

Other expense, net for the ~~March~~six months ended December 31, 2021 ~~quarter~~ increased by $9$32 million c~~ompared~~compared to the ~~March 2020 quarter~~six months ended January 1, 2021 primarily due to a ~~$20~~$19 million increase in interest expense from the issuance of long-term debt ~~during the nine months ended April 2, 2021~~ and a ~~$12~~$17 million ~~increase in foreign exchange remeasurement expense, partially offset by an $11 million~~net decrease in ~~interest expense due to the repurchase of certain long-term debt and a $10 million~~ gains from our strategic ~~investment upward adjustment in the March 2021 quarter.~~

~~Other expense, net for the nine months ended April 2, 2021 decreased by $27 million compared to the nine months ended April 3, 2020 primarily due to~~ investments,~~$41 million of strategic investment gains in the~~ ~~nine months ended April 2, 2021,~~ ~~of which $33 million is upward adjustments and $8 million is a gain upon sale of an investment, a $37 million decrease in interest expense due to the repurchase of certain long-term debt,~~ ~~a $28 million non-recurring loss from the repurchase and exchange of certain long-term debt in the quarter ended October 4, 2019~~ ~~and a $15 million increase in gains on de-designated cash flow hedges. The decrease was~~ partially offset by a ~~$46~~$5 million ~~increase~~decrease in ~~interest expense~~losses from ~~the issuance of long-term debt in the~~ ~~nine months ended April 2, 2021, a $28 million increase in~~ foreign exchange ~~remeasurement expense, a $16 million decrease in interest income primarily due to a decline in interest rates~~transactions and ~~$7 million strategic investment impairment charges in the December 2020 quarter.~~remeasurements, net of cash flow hedges.

Income Taxes


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended						For the Six Months Ended
(Dollars in millions)	(Dollars in millions)	April 2, 2021		January 1, 2021		April 3, 2020		April 2, 2021		April 3, 2020		(Dollars in millions)	December 31, 2021		October 1, 2021		January 1, 2021		December 31, 2021		January 1, 2021
Provision for income taxes	Provision for income taxes	$	10	$	11	$	18	$	19	$	34	Provision for income taxes	$	13	$	7	$	11	$	20	$	9

We recorded income tax provisions of ~~$10~~$13 million and ~~$19~~$20 million infor the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021, ~~respectively.~~respectively. The discrete items in the income tax provision were not material for the three months ended December 31, 2021. The income tax provision for the ~~three~~six months ended ~~April 2,~~December 31, 2021 included approximately $4$9 millionof net discrete tax benefit ~~primarily associated with filing of tax returns in various jurisdictions.~~ ~~The income tax provision for the nine months ended April 2, 2021 included approximately $15 million of net discrete tax benefits,~~, primarily associated with net excess tax benefits related to share-based compensation ~~expense, filing~~expense.

Table of ~~tax returns in various jurisdictions, and postponement of the previously enacted United Kingdom tax rate change in the quarter ended October 2, 2020.~~Contents

During the ~~nine~~six months ended ~~April 2,~~December 31, 2021, our unrecognized tax benefits excluding interest and penalties increased by approximately ~~$18~~ $7 million to ~~$107~~$115 million, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. During the twelve months beginning ~~April 3, 2021,~~January 1, 2022, we expect that our unrecognized tax benefits could be reduced by an immaterial amount, as a result of the expiration of certain statutes of limitation.

We recorded income tax provisions of ~~$18~~$11 million and $349 million infor the three and ~~nine~~six months ended ~~April 3, 2020, respectively.~~January 1, 2021. The discrete items in the income tax provision were not material for the three months ended ~~April 3, 2020.~~January 1, 2021. The income tax provision for the ~~nine~~six months ended ~~April 3, 2020~~January 1, 2021 included approximately ~~$13~~$11 million of net discrete tax benefits, primarily associated with net excess tax benefits related to share-based compensation ~~expense.~~expense and postponement of the previously enacted United Kingdom tax rate change in the quarter ended October 2, 2020.

Our income tax provision recorded for the three and ~~nine~~six months ended ~~April 2,~~December 31, 2021 and ~~April 3, 2020~~January 1, 2021 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) current year generation of research credits.

~~Table of Contents~~

Liquidity and Capital Resources

The following sections discuss our principal liquidity requirements, as well as our sources and uses of cash and our liquidity and capital resources. Our cash and cash equivalents are maintained in investments with remaining maturities of 90 days or less at the time of purchase. The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We believe our cash equivalents are liquid and accessible. We operate in some countries that have restrictive regulations over the movement of cash and/or foreign exchange across their borders. However, we believe our sources of cash will continue to be sufficient to fund our operations and meet our cash needs for the next 12 months. Although there can be no assurance, we believe that our financial resources, along with controlling our costs, will allow us to manage the potential impacts of the COVID-19 pandemic on our business operations for the foreseeable future. However, ~~the~~some challenges posed by the COVID-19 pandemic to our industry and to our business ~~are evolving rapidly, are highly~~continue to remain uncertain and cannot be predicted at this time. Consequently, we will continue to evaluate our financial position in light of future developments, particularly those relating to the COVID-19 pandemic.

We are not aware of any downgrades, losses or other significant deterioration in the fair value of our cash equivalents from the values reported as of ~~April 2,~~December 31, 2021.

Cash and Cash Equivalents


(Dollars in millions)	(Dollars in millions)	April 2, 2021		July 3, 2020		Change		(Dollars in millions)	December 31, 2021		July 2, 2021		Change
Cash and cash equivalents	Cash and cash equivalents	$	1,212	$	1,722	$	(510)	Cash and cash equivalents	$	1,535	$	1,209	$	326

Our cash and cash equivalents as of ~~April 2,~~December 31, 2021 ~~decreased~~increased by ~~$510~~$326 million from July ~~3, 2020~~2, 2021 primarily as a result ~~the repurchases~~ of ~~our ordinary shares of $1,819 million, dividends paid to our~~ ~~shareholders of $495 million and~~ ~~payments for capital expenditures of~~ ~~$374 million, partially offset by the~~ net proceeds of ~~$986 million~~$1.2 billion from the issuance of long-term debt and net cash of $~~1,148 million~~ 1.0 billionprovided by operating ~~activities.~~activities, partially offset by the repurchases of our ordinary shares of $896 million, repayment of long-term debt of $481 million, dividends paid to our shareholders of $304 million and payments for capital expenditures of $212 million.

Cash Provided by Operating Activities

Cash provided by operating activities for the ~~nine~~six months ended ~~April 2,~~December 31, 2021 was ~~$1,148 million~~$1.0 billion and includes the effects of net income adjusted for non-cash items including depreciation, amortization, share-based compensation and:

•~~a decrease~~an increase of $~~138~~241 million in accounts receivable, primarily due to linearity of sales in the ~~March~~December 2021 quarter;

•~~an increase of $60 million in accounts payable, primarily due to an increase in materials purchased and greater operating expenses;~~

•~~partially offset by~~ an increase of ~~$141~~$83 million in inventories, primarily due to timing of shipments and an increase in materials ~~purchased;~~purchased for increased production of higher capacity drives; and

•a decrease ~~of $43 million~~ in accrued ~~restructuring,~~employee compensation of $54 million, primarily due to ~~severance payments~~cash paid to ~~impacted employees.~~our employees as part of our discretionary spending plans;

•partially offset by an increase of $63 million in accounts payable, primarily due to an increase in material purchased.

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Cash Used in Investing Activities

Cash used in investing activities for the ~~nine~~six months ended ~~April 2,~~December 31, 2021 was ~~$360~~$196 million, primarily attributable to the following activities:

•payments for the purchase of property, equipment and leasehold improvements of ~~$374~~$212 million; and

•payments for the purchase of investments of $4$18 million;

•partially offset by proceeds from the sale of investments of ~~$11 million;~~

•~~proceeds from the sale of assets of $4 million; and~~

•~~proceeds from the maturities of short-term investments of $3~~$34 million.

Cash Used in Financing Activities

Cash used in financing activities of ~~$1,298~~$495 million for the ~~nine~~six months ended ~~April 2,~~December 31, 2021 was primarily attributable to the following activities:

•payments for the repurchase of our ordinary shares of ~~$1,819~~$896 million;

•payments for the repurchase of long-term debt of $481 million;

•payments for dividends of ~~$495~~$304 million; and

•payments for taxes related to net share settlement of equity awards of ~~$33~~$45 million;

•~~payments for the repurchase of long-term debt of $27 million;~~

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•~~payments for the fees related to the amendment of the Credit Agreement of $4 million;~~

•partially offset by net proceeds from the issuance of long-term debt of ~~$986 million~~$1.2 billion; and

•proceeds from the issuance of ordinary shares under employee share plans of $9537 million.

Liquidity Sources, Cash Requirements and Commitments

Our primary sources of liquidity as of ~~April 2,~~December 31, 2021 ~~consisted~~consist of: (1) approximately ~~$1.2~~$1.5 billion in cash and cash equivalents, (2) cash we expect to generate from operations and (3) ~~$1.725~~$1.75 billion available for borrowing under our senior unsecured revolving credit facility (“Revolving Credit ~~Facility.~~Facility”), which is part of our credit agreement (the “Credit Agreement”).

On October 14, 2021, our subsidiary Seagate HDD Cayman entered into an amendment to the Credit Agreement (“Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $1.2 billion that was extended in two tranches of $600 million each. The Term Loans were drawn in full on October 14, 2021. The proceeds of the Term Loans may be used for general corporate purposes, to refinance or repay our September 2019 Term Loan and to refinance or repay our 4.25% notes due March 1, 2022. On October 14, 2021, we utilized part of the proceeds of Term Loan A1 to fully repay the $475 million principal amount outstanding of our September 2019 Term Loan.

In addition, pursuant to the Fifth Amendment, the maturity date for the revolving loan commitments was extended until October 14, 2026, the revolving commitments were increased to $1.75 billion and the interest rate margins for the Revolving Credit Facility was amended to LIBOR plus a variable margin ranging from 1.125% to 2.375% that will be determined based on the corporate credit rating of our Company. See “Part I, Item 1. Financial Statements—Note 3. Debt” for information regarding our amended Credit Agreement.

As of ~~April 2,~~December 31, 2021, no borrowings ~~had been drawn~~(including swingline loans) were outstanding and no ~~borrowings had been~~commitments were utilized for letters of credit ~~or swing line loans~~ issued under the Revolving Credit Facility. The Revolving Credit Facility is available for borrowings, subject to compliance with financial covenants and other customary conditions to borrowing.

The Credit Agreement includes three financial covenants: (1) interest coverage ratio, (2) total leverage ratio and (3) a minimum liquidity amount. The term of the Revolving Credit Facility is through February 20, 2024, and the maturity date of the Term Loan is September 16, 2025. We were in compliance with the covenants as of April 2, 2021 and expect to be in compliance for the next 12 months.

Our liquidity requirements are primarily to meet our working capital, product development and capital expenditure needs, to fund scheduled payments of principal and interest on our indebtedness, and to fund our quarterly dividend and any future strategic investments. Our ability to fund these requirements will depend on our future cash flows, which are determined by future operating performance, and therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control.

For fiscal year ~~2021,~~2022, we expect capital expenditures to be ~~aligned to~~at the low end of our ~~updated~~ long-term targeted range of 4% to 6% of revenue. We require substantial amounts of cash to fund any increased working capital requirements, future capital expenditures, scheduled payments of principal and interest on our indebtedness and payments of dividends. We may raise additional capital from time to time and will continue to evaluate and manage the retirement and replacement of existing debt and associated obligations, including evaluating the issuance of new debt securities, exchanging existing debt securities for other debt securities and retiring debt pursuant to privately negotiated transactions, open market purchases, tender offers or other means. In addition, we may selectively pursue strategic alliances, acquisitions, joint ventures and investments, which may require additional capital.

From time to time, we may repurchase any of our outstanding senior notes in open market or privately negotiated purchases or otherwise, or we may repurchase outstanding senior notes pursuant to the terms of the applicable indenture.

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During the ~~March~~December 2021 quarter, our Board of Directors declared ~~a dividend~~dividends of ~~$0.67~~$0.70 per share, totaling $154 million, which ~~was~~were paid on ~~April 7, 2021.~~January 5, 2022. On ~~April 22, 2021~~January 26, 2022, our Board of Directors declared a quarterly cash dividend of ~~$0.67~~$0.70 per share, payable on ~~July 7, 2021~~April 6, 2022 to shareholders of record at the close of business on ~~May 12, 2021.~~March 22, 2022.

From time to time, at ~~the Company’s~~our discretion, we may repurchase any of our outstanding ordinary shares through private, open market, or ~~broker assisted~~broker-assisted purchases, tender offers, or other means, including through the use of derivative transactions.~~Our Board of Directors increased the authorization for the repurchase of our outstanding ordinary shares by $3.0 billion on October 21, 2020, and $2.0 billion on February 22, 2021.~~ As of ~~April 2,~~December 31, 2021, ~~$4.4~~$3.3 billion remained available for repurchases under our existing repurchase authorization. We may limit or terminate the repurchase program at any time. All repurchases are effected as redemptions in accordance with our Constitution.

Contractual Obligations and Commitments

Our contractual cash obligations and commitments as of December 31, 2021, are summarized in the table below:


			Fiscal Year(s)
(Dollars in millions)	Total		2022		2023-2024		2025-2026		Thereafter
Contractual Cash Obligations:
Long-term debt	$	5,935	$	220	$	1,145	$	1,125	$	3,445
Interest payments on debt	1,477		133		430		325		589
Purchase obligations (1)	1,920		1,425		421		59		15
Operating leases, including imputed interest (2)	64		8		23		12		21
Capital expenditures	267		113		149		5		—

Subtotal	9,663		1,899		2,168		1,526		4,070
Commitments:
Letters of credit or bank guarantees	27		5		13		—		9
Total	$	9,690	$	1,904	$	2,181	$	1,526	$	4,079

(1)Purchase obligations are defined as contractual obligations for the purchase of goods or services, which are enforceable and legally binding on us, and that specify all significant terms.

(2)Includes total future minimum rent expense under non-cancelable leases for both occupied and vacated facilities (rent expense is shown net of sublease income).

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of such statements requires us to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period and the reported amounts of assets and liabilities as of the date of the financial statements. Our estimates are based on historical experience and other assumptions that we consider to be appropriate in the circumstances. However, actual future results may vary from our estimates.

Other than as described in “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies”, there have been no other material changes in our critical accounting policies and estimates. Refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended July ~~3, 2020,~~2, 2021, as filed with the SEC on August ~~7, 2020,~~6, 2021, for a discussion of our critical accounting policies and estimates.

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Recent Accounting Pronouncements

See “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies” for information regarding the effect of new accounting pronouncements on our financial statements.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to market risks due to the volatility of interest rates, foreign currency exchange rates, credit rating changes and equity and bond markets. A portion of these risks may be hedged, but fluctuations could impact our results of operations, financial position and cash flows.

Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our cash investment portfolio. As of ~~April 2,~~December 31, 2021, we had no available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. We determined no impairment related to credit losses for available-for-sale debt securities as of ~~April 2,~~December 31, 2021.

~~In the quarter ended October 4, 2019, we~~We have entered into certain interest rate swap agreements ~~with a notional amount of $500 million~~ to convert the variable interest rate on the Term ~~Loan~~Loans to fixed interest rates. ~~The contracts were effective as of October 4, 2019 and will mature on September 16, 2025. The notional amount of the interest rate swap agreements was $488 million as of April 2, 2021.~~ The objective of the interest rate swap agreements is to eliminate the variability of interest payment cash flows associated with the variable interest rate onunder the Term ~~Loan. The Company~~Loans. We designated the interest rate swaps as cash flow hedges. As of December 31, 2021, the aggregate notional amount of our interest-rate swap contracts was $1.2 billion, of which $600 million will mature in September 2025 and $600 million will mature in July 2027.

We have fixed rate and variable rate debt obligations. We enter into debt obligations for general corporate purposes including capital expenditures and working capital needs. Our September 2019 Term Loan ~~bears~~was repaid in full on October 14, 2021, using part of the proceeds from Term Loan A1. Our Term Loans bear interest at a variable rate equal to LIBOR plus a variable ~~margin set on March 17, 2021.~~margin. At this time, we have not identified any material exposure associated with the phase out of LIBOR by the end of ~~2021.~~2022.

The table below presents principal amounts and related fixed or weighted-average interest rates by year of maturity for our investment portfolio and debt obligations as of ~~April 2,~~December 31, 2021.


		Fiscal Years Ended																		Total				Fair Value at April 2, 2021			Fiscal Years Ended																		Total			Fair Value at December 31, 2021
(Dollars in millions, except percentages)	(Dollars in millions, except percentages)	2021			2022			2023			2024			2025			Thereafter						(Dollars in millions, except percentages)			2022		2023			2024			2025			2026			Thereafter
Assets	Assets																										Assets
Money market funds, time deposits and certificates of deposit	Money market funds, time deposits and certificates of deposit																									Money market funds, time deposits and certificates of deposit
Floating rate	Floating rate	$	532		$	—		$	—		$	—		$	—		$	—		$	532			$	532	Floating rate	$	436		$	—		$	—		$	—		$	—		$	—		$	436		$	436
Average interest rate	Average interest rate	0.03		%																0.03		%				Average interest rate	0.04		%																0.04		%
Other debt securities	Other debt securities																									Other debt securities
Fixed rate	Fixed rate	$	10		$	—		$	—		$	—		$	—		$	8		$	18			$	18	Fixed rate	$	13		$	—		$	—		$	—		$	15		$	8		$	36		$	36
Fixed interest rate	Fixed interest rate	5.00		%																5.00		%				Fixed interest rate	5.23		%																5.23		%

Debt	Debt																									Debt
Fixed rate	Fixed rate	$	—		$	220		$	541		$	500		$	479		$	2,995		$	4,735			$	4,960	Fixed rate	$	220		$	540		$	500		$	479		$	—		$	2,996		$	4,735		$	4,974
Average interest rate	Average interest rate				4.25		%	4.75		%	4.88		%	4.75		%	4.22		%	4.40		%				Average interest rate	4.25		%	4.75		%	4.88		%	4.75		%	—		%	4.22		%	4.40		%
Variable rate	Variable rate	$	6		$	25		$	25		$	25		$	25		$	381		$	487			$	488	Variable rate	$	—		$	45		$	60		$	83		$	563		$	449		$	1,200		$	1,181
Average interest rate	Average interest rate	3.29		%	3.29		%	3.29		%	3.29		%	3.29		%	3.29		%	3.29		%				Average interest rate	—		%	2.92		%	2.92		%	2.92		%	2.95		%	2.90		%	2.92		%

Foreign Currency Exchange Risk. From time to time, we may enter into foreign currency forward exchange contracts to manage exposure related to certain foreign currency commitments and anticipated foreign currency denominated expenditures. Our policy prohibits us from entering into derivative financial instruments for speculative or trading purposes.

We hedge portions of our foreign currency denominated balance sheet positions with foreign currency forward exchange contracts to reduce the risk that our earnings will be adversely affected by changes in currency exchange rates. The change in fair value of these contracts is recognized in earnings in the same period as the gains and losses from the remeasurement of the assets and liabilities. All foreign currency forward exchange contracts mature within 12 months.

~~Table of Contents~~

We recognized a net ~~gain~~loss of $86 million and ~~$12~~$3 million in Cost of revenue and Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during the three ~~and nine~~ months ended ~~April 2, 2021, respectively~~.December 31, 2021. We recognized a net loss of $1$8 million and $5$4 million in Cost of revenue and Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during the ~~three and nine~~six months ended ~~April 2, 2021, respectively.~~December 31, 2021.

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The table below provides information as of ~~April 2,~~December 31, 2021 about our foreign currency forward exchange contracts. The table is provided in dollar equivalent amounts and presents the notional amounts (at the contract exchange rates) and the weighted-average contractual foreign currency exchange rates.


(Dollars in millions, except weighted-average contract rate)	(Dollars in millions, except weighted-average contract rate)	Notional Amount		Weighted-Average Contract Rate		Estimated Fair Value(1)		(Dollars in millions, except weighted-average contract rate)	Notional Amount		Weighted-Average Contract Rate		Estimated Fair Value(1)
Foreign currency forward exchange contracts:	Foreign currency forward exchange contracts:							Foreign currency forward exchange contracts:
Singapore Dollar	Singapore Dollar	$	218	$	1.35	$	1	Singapore Dollar	$	224	$	1.35	$	—
Thai Baht	Thai Baht	169		$	30.73	(3)		Thai Baht	172		$	32.65	(4)
Chinese Renminbi	Chinese Renminbi	94		$	6.74	1		Chinese Renminbi	106		$	6.54	2
British Pound Sterling	British Pound Sterling	70		$	0.74	2		British Pound Sterling	83		$	0.74	(1)

Total	Total	$	551			$	1	Total	$	585			$	(3)

(1) Equivalent to the unrealized net gain (loss) on existing contracts.

Other Market Risks. We have exposure to counterparty credit downgrades in the form of credit risk related to our foreign currency forward exchange contracts and our fixed income portfolio. We monitor and limit our credit exposure for our foreign currency forward exchange contracts by performing ongoing credit evaluations. We also manage the notional amount of contracts entered into with any one counterparty and we maintain limits on maximum tenor of contracts based on the credit rating of the financial institution. Additionally, the investment portfolio is diversified and structured to minimize credit risk.

Changes in our corporate issuer credit ratings have minimal impact on our near-term financial results, but downgrades may negatively impact our future ability to raise capital and execute transactions with various counterparties, and may increase the cost of such capital.

We are subject to equity market risks due to changes in the fair value of the notional investments selected by our employees as part of our SDCP. The SDCP is a successor plan to the prior Seagate Deferred Compensation Plans, as amended from time to time, under which no additional deferrals may be made after December 31, 2014. In fiscal year 2014, we entered into a TRS in order to manage the equity market risks associated with the SDCP liabilities. We pay a floating rate, based on LIBOR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP liabilities due to changes in the value of the investment options made by employees. See “Part I, Item 1. Financial Statements—Note 7.6. Derivative Financial Instruments” of this Quarterly Report on Form 10-Q.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by the Exchange Act Rule 13a-15, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on the evaluation, our management, including our chief executive officer and chief financial officer, concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective as of ~~April 2,~~December 31, 2021.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~April 2,~~December 31, 2021, there were no changes in our internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

~~Table of Contents~~

For a discussion of legal proceedings, see “Part I, Item 1. Financial Statements—Note ~~13.~~12. Legal, Environmental and Other Contingencies” of this Quarterly Report on Form 10-Q.

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ITEM 1A.RISK FACTORS

There have been no material changes to the description of the risk factors associated with our business previously disclosed in “Risk Factors” in Part I, Item 1A. in our Annual Report on Form 10-K for the fiscal year ended July ~~3, 2020.~~2, 2021. In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in our Annual Report on Form 10-K as they could materially affect our business, financial condition and future results.

The Risk Factors are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchase of Equity Securities

All repurchases of our outstanding ordinary shares are effected as redemptions in accordance with our Constitution.

~~Our Board of Directors increased the authorization for the repurchase of its outstanding ordinary shares by $3.0 billion on October 21, 2020, and $2.0 billion on February 22, 2021.~~ As of ~~April 2,~~December 31, 2021, ~~$4.4~~$3.3 billion remained available for repurchases under the existing repurchase authorization. There is no expiration date on this authorization. The timing of purchases will depend upon prevailing market conditions, alternative uses of capital ~~distributable reserves~~ and other factors. We may limit or terminate the repurchase program at any time.

The following table sets forth information with respect to all repurchases of our ordinary shares made during the fiscal quarter ended ~~April 2,~~December 31, 2021, including statutory tax withholdings related to vesting of employee equity awards (in millions, except average price paid per share):

Period
Total Number of Shares Repurchased(1)
Average Price Paid Per Share(1)
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)
January 2, 2021 through January 29, 2021 5 $ 60.75 5 2,904
January 30, 2021 through February 26, 2021 5 69.48 5 4,572
February 27, 2021 through April 2, 2021 1 74.56 1 4,441
Total 11 11


Period	Total Number of Shares Repurchased(1)	Average Price Paid Per Share(1)		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)

October 2, 2021 through October 29, 2021	3	$	82.89	3	$	3,540
October 30, 2021 through November 26, 2021	1	96.84		1	3,403
November 27, 2021 through December 31, 2021	1	105.86		1	3,273
Total	5			5

(1) Repurchase of shares ~~including~~pursuant to the repurchase program described above, as well as tax withholdings.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

Not applicable.

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ITEM 6.EXHIBITS

Incorporated by Reference

Exhibit No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Filed Herewith

Exhibit No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Filed Herewith

3.1

Constitution of Seagate Technology public limited company as amended and restated by Special Resolution dated October 19, 2016.

8-K

001-31560

3.1

10/24/2016

3.1

Certificate of Incorporation of Seagate Technology Holdings plc.

10-K

001-31560

3.1

8/6/2021

3.2

Certificate of Incorporation of Seagate Technology plc.

10-K

001-31560

3.2

8/20/2010

3.2

Constitution of Seagate Technology Holdings public limited company as of May 18, 2021 (as amended by special resolution dated May 14, 2021)

S-8

001-31560

4.1

10/20/2021

10.1

Third Amendment, dated as of January 13, 2021 , to the Credit Agreement dated as of February 20, 2019

10-Q

001-31560

10.4

1/28/2021

10.1

Fifth Amendment, dated as of October 14, 2021, to the Credit Agreement dated as of February 20, 2019

10-Q

001-31560

10.6

10/28/2021

10.2

First Amendment, dated as of January 13, 2021 , to the U.S. Guarantee Agreement dated as of February 20, 2019

10-Q

001-31560

10.5

1/28/2021

10.3

Revised Form of Employee Restricted Share Unit Agreement for Seagate Technology public limited company pursuant to the 2012 Equity Incentive Plan (for awards granted after April 2021)

31.1

Certification of the Chief Executive Officer pursuant to rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.1

31.2

Certification of the Chief Financial Officer pursuant to rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of the Chief Financial Officer pursuant to rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act

32.1†

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.

32.1†

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.

101.INS

Inline XBRL Instance Document.

101.INS

Inline XBRL Instance Document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

104

Inline XBRL Cover page and contained in Exhibit 101.

104

Inline XBRL Cover page and contained in Exhibit 101.

† The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Seagate Technology Holdings plc under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

DATE:

~~April 29, 2021~~January 27, 2022

BY:

/s/ Gianluca Romano

Gianluca Romano

Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

4340


Fiscal Year	Amount
Remainder of 2021	$	6
2022	245
2023	566
2024	525
2025	504

Thereafter	3,376
Total	$	5,222


	April 2, 2021		July 3, 2020
Weighted-average remaining lease term	7.1 years		13.2 years
Weighted-average discount rate	6.02	%	6.53	%


	June 2020 Plan				Other Plans
(Dollars in millions)	Workforce Reduction Costs		Facilities and Other Exit Costs		Workforce Reduction Costs		Facilities and Other Exit Costs		Total
Accrual balances at July 3, 2020	$	38	$	2	$	5	$	3	$	48
Restructuring charges	0		0		5		0		5
Cash payments	(37)		(1)		(8)		(1)		(47)
Adjustments	0		0		0		(1)		(1)
Accrual balances at April 2, 2021	$	1	$	1	$	2	$	1	$	5
Total costs incurred to date as of April 2, 2021	$	56	$	2	$	21	$	28	$	107
Total expected charges to be incurred as of April 2, 2021	$	0	$	7	$	0	$	0	$	7


	Restructuring Plans
(Dollars in millions)	Workforce Reduction Costs		Facilities and Other Exit Costs		Total
Accrual balances at June 28, 2019	$	13	$	17	$	30
Lease adoption adjustment	0		(11)		(11)
Restructuring charges	22		1		23
Cash payments	(29)		(3)		(32)
Adjustments	(4)		0		(4)
Accrual balances at April 3, 2020	$	2	$	4	$	6