2023
| Ireland | ||||||||
(State or other jurisdiction of | (I.R.S. Employer | |||||||
| incorporation or organization) |
Identification Number) | |||||||
| 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 | ||||||||||||
| Large accelerated | ☒ | ☐ | ||||||||||||||
| 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. ☐
Item 1. Current assets: Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Deferred income taxes Other assets, net Total Assets Current liabilities: Accounts payable Accrued employee compensation Accrued warranty Current portion of long-term debt Accrued expenses Total current liabilities Long-term accrued warranty Long-term accrued income taxes Othernon-current liabilities Long-term debt Total Liabilities Commitments and contingencies (See Notes 12, 14 and 15) Shareholders’ Equity: Ordinary shares and additionalpaid-in capital Accumulated other comprehensive loss Accumulated deficit Total Equity Total Liabilities and Equity Revenue Cost of revenue Product development Marketing and administrative Amortization of intangibles Restructuring and other, net Total operating expenses Income from operations Interest income Interest expense Other, net Other expense, net Income before income taxes Provision for income taxes Net income Net income per share: Basic Diluted Number of shares used in per share calculations: Basic Diluted Cash dividends declared per ordinary share Net income Other comprehensive income (loss), net of tax: Cash flow hedges Change in net unrealized gain (loss) on cash flow hedges Less: reclassification for amounts included in net income Net change Marketable securities Change in net unrealized gain (loss) on marketable securities Less: reclassification for amounts included in net income Net change Post-retirement plans Change in unrealized gain (loss) on post-retirement plans Less: reclassification for amounts included in net income Net change Foreign currency translation adjustments Total other comprehensive income (loss), net of tax Comprehensive income OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Share-based compensation Impairment of long-lived assets Deferred income taxes Othernon-cash operating activities, net Changes in operating assets and liabilities: Accounts receivable, net Inventories Accounts payable Accrued employee compensation Accrued expenses, income taxes and warranty Vendor receivables Other assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements Proceeds from the sale of property and equipment Maturities of short-term investments Other investing activities, net Net cash used in investing activities FINANCING ACTIVITIES Redemption and repurchase of debt Taxes paid related to net share settlement of equity awards Repurchases of ordinary shares Dividends to shareholders Proceeds from issuance of ordinary shares under employee stock plans Net cash used in financing activities Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash Increase in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash at the beginning of the period Cash, cash equivalents, and restricted cash at the end of the period DEFICIT 2023 and September 30, 2022 Balance at June 30, 2017 Net income Other comprehensive income Issuance of ordinary shares under employee stock plans Repurchases of ordinary shares Tax withholding related to vesting of restricted stock units Dividends to shareholders Share-based compensation Balance at December 29, 2017 legacy applications. at the metro edge. Condensed Consolidated Financial Statements. The results of operations for the three Statements. (Dollars in millions) Available-for-sale securities: Money market funds Time deposits and certificates of deposit Total Included in Cash and cash equivalents Included in Other current assets Total 2023 and June 30, 2023: 2023 (Dollars in millions) Due in less than 1 year Due in 1 to 5 years Due in 6 to 10 years Thereafter Total (Dollars in millions) Available-for-sale securities: Money market funds Time deposits and certificates of deposit Total Included in Cash and cash equivalents Included in Other current assets Total (Dollars in millions) Cash and cash equivalents Restricted cash included in Other current assets Total cash, cash equivalents, and restricted cash shown in the Statements of Cash Flows (Dollars in millions) Raw materials and components Work-in-process Finished goods (Dollars in millions) Property, equipment and leasehold improvements Accumulated depreciation and amortization (Dollars in millions) Dividends payable Other accrued expenses Total (Dollars in millions) Balance at June 30, 2017 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCI Other comprehensive income (loss) Balance at December 29, 2017 Balance at July 1, 2016 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCI Other comprehensive income (loss) Balance at December 30, 2016 Fiscal Year Remainder of 2018 2019 2020 2021 2022 Thereafter Total related to share-based compensation expense. (Dollars in millions) Cash and cash equivalents Accounts receivable, net Inventories Other current andnon-current assets Property, plant and equipment Intangible assets Goodwill Total assets Accounts payable, accrued expenses and other Total liabilities Total (Dollars in millions) Existing technology Customer relationships Trade names Total amortizable intangible assets acquired In-process research and development Total acquired identifiable intangible assets (Dollars in millions) Balance at June 30, 2017 Goodwill acquired Goodwill disposed Foreign currency translation effect Balance at December 29, 2017 The (Dollars in millions) Existing technology Customer relationships Trade name Other intangible assets Total amortizable other intangible assets (Dollars in millions) Existing technology Customer relationships Trade name Other intangible assets Total amortizable other intangible assets (Dollars in millions) Remainder of 2018 2019 2020 2021 2022 Thereafter Total (Dollars in millions) Restructuring charges Cash payments Adjustments $119 million at June 30, 2023, 2023. As of September 29, 2023, the amount of existing net losses related to cash flow hedges recorded in AOCI included a net loss of $14 million that is expected to be reclassified to earnings within twelve months. contracts as of September 29, 2023 and June 30, 2023. All of the foreign currency forward exchange contracts mature within 12 months. (Dollars in millions) Derivatives Not Designated as Hedging Instruments Foreign currency forward exchange contracts Total return swap (Dollars in millions) Derivatives Designated as Hedging Instruments Foreign currency forward exchange contracts Derivatives Not Designated as Hedging Instruments Foreign currency forward exchange contracts Total return swap (Dollars in millions) Assets: Money market funds Time deposits Total cash equivalents Restricted cash and investments: Money market funds Time deposits and certificates of deposit Total assets (Dollars in millions) Assets: Cash and cash equivalents Other current assets Total assets (Dollars in millions) Assets: Money market funds Time deposits Total cash equivalents Restricted cash and investments: Money market funds Time deposits and certificates of deposit Total assets (Dollars in millions) Assets: Cash and cash equivalents Other current assets Total assets Contents (Dollars in millions) 3.75% Senior Notes due November 2018 4.25% Senior Notes due March 2022 4.75% Senior Notes due June 2023 4.875% Senior Notes due March 2024 4.75% Senior Notes due January 2025 4.875% Senior Notes due June 2027 5.75% Senior Notes due December 2034 Less: debt issuance costs Long-term debt, net of debt issuance costs Less: current portion of long-term debt Long-term debt, less current portion 2023. Constitution. limit approved by the Board of Directors. The following table sets (In millions) Repurchases of ordinary shares Tax withholding related to vesting of equity awards Total 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 Contents (Dollars in millions) Balance, beginning of period Warranties issued Repairs and replacements Changes in liability forpre-existing warranties, including expirations Balance, end of period (In millions, except per share data) Numerator: Net income Number of shares used in per share calculations: Total shares for purposes of calculating basic net income per share Weighted-average effect of dilutive securities: Employee equity award plans Total shares for purpose of calculating diluted net income per share Net income per share: Basic Diluted 2022. vigorously defend these cases. 2023.PAGE NO. 36PART II383838383838Item 6.3940(Unaudited) December 29,
2017 June 30,
2017 ASSETS $ 2,556 $ 2,539 1,055 1,199 1,014 982 285 321 4,910 5,041 1,762 1,875 1,238 1,238 222 281 402 609 216 224 $ 8,750 $ 9,268 LIABILITIES AND EQUITY $ 1,620 $ 1,626 183 237 111 113 560 — 639 650 3,113 2,626 125 120 12 15 123 122 4,316 5,021 7,689 7,904 6,246 6,152 (11 ) (17 ) (5,174 ) (4,771 ) 1,061 1,364 $ 8,750 $ 9,268 The information as of June 30, 2017 was derived from the Company’s audited Consolidated Balance Sheet as of June 30, 2017. September 29, 2023 June 30, 2023 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 795 $ 786 Accounts receivable, net 521 621 Inventories 1,052 1,140 Other current assets 268 358 Total current assets 2,636 2,905 Property, equipment and leasehold improvements, net 1,652 1,706 Goodwill 1,237 1,237 Deferred income taxes 1,087 1,117 Other assets, net 584 591 Total Assets $ 7,196 $ 7,556 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 1,511 $ 1,603 Accrued employee compensation 88 100 Accrued warranty 84 78 Current portion of long-term debt — 63 Accrued expenses 790 748 Total current liabilities 2,473 2,592 Long-term accrued warranty 92 90 Other non-current liabilities 667 685 Long-term debt, less current portion 5,666 5,388 Total Liabilities 8,898 8,755 Commitments and contingencies (See Notes 10, 12 and 13) Shareholders’ Deficit: Ordinary shares and additional paid-in capital 7,338 7,373 Accumulated other comprehensive (loss) income (15) 98 Accumulated deficit (9,025) (8,670) Total Shareholders’ Deficit (1,702) (1,199) Total Liabilities and Shareholders’ Deficit $ 7,196 $ 7,556 For the Three Months Ended For the Six Months Ended December 29,
2017 December 30,
2016 December 29,
2017 December 30,
2016 $ 2,914 $ 2,894 $ 5,546 $ 5,691 2,037 2,003 3,933 3,999 250 305 513 620 142 155 287 308 19 28 41 57 33 33 84 115 2,481 2,524 4,858 5,099 433 370 688 592 6 1 13 2 (61 ) (50 ) (122 ) (100 ) (7 ) (11 ) (20 ) (11 ) (62 ) (60 ) (129 ) (109 ) 371 310 559 483 212 13 219 19 $ 159 $ 297 $ 340 $ 464 $ 0.55 $ 1.00 $ 1.18 $ 1.56 0.55 1.00 1.17 1.55 288 296 289 297 291 298 291 299 $ 0.63 $ 0.63 $ 1.26 $ 1.26 For the Three Months Ended September 29, 2023 September 30, 2022 Revenue $ 1,454 $ 2,035 Cost of revenue 1,305 1,553 Product development 171 234 Marketing and administrative 105 129 Amortization of intangibles — 3 Restructuring and other, net 2 9 Total operating expenses 1,583 1,928 (Loss) income from operations (129) 107 Interest income 2 1 Interest expense (84) (71) Net gain recognized from termination of interest rate swap 104 — Net loss recognized from early redemption of debt (29) — Other, net (11) (10) Other expense, net (18) (80) (Loss) income before income taxes (147) 27 Provision for (benefit from) income taxes 37 (2) Net (loss) income $ (184) $ 29 Net (loss) income per share: Basic $ (0.88) $ 0.14 Diluted $ (0.88) $ 0.14 Number of shares used in per share calculations: Basic 208 208 Diluted 208 210 For the Three Months Ended For the Six Months Ended December 29,
2017 December 30,
2016 December 29,
2017 December 30,
2016 $ 159 $ 297 $ 340 $ 464 — (2 ) — (3 ) — — — 1 — (2 ) — (2 ) — — — — — — — — — — — — — — — — — — — — — — — — 2 (7 ) 6 (6 ) 2 (9 ) 6 (8 ) $ 161 $ 288 $ 346 $ 456 For the Three Months Ended September 29, 2023 September 30, 2022 Net (loss) income $ (184) $ 29 Other comprehensive income (loss), net of tax: Change in net unrealized (losses) gains on cash flow hedges: Net unrealized (losses) gains arising during the period (22) 32 (Gains) losses reclassified into earnings (92) 5 Net change (114) 37 Change in unrealized components of post-retirement plans: Net unrealized gains arising during the period — 1 Net change — 1 Foreign currency translation adjustments 1 (1) Total other comprehensive (loss) income, net of tax (113) 37 Comprehensive (loss) income $ (297) $ 66 For the Six Months Ended December 29,
2017 December 30,
2016 $ 340 $ 464 318 391 59 73 — 9 204 3 3 18 145 110 (32 ) (140 ) 59 170 (54 ) 70 3 69 42 19 — (9 ) 1,087 1,247 (201 ) (235 ) 2 (1 ) — 6 (11 ) (4 ) (210 ) (234 ) (152 ) — (21 ) (24 ) (361 ) (248 ) (366 ) (188 ) 35 47 (865 ) (413 ) 5 (12 ) 17 588 2,543 1,132 $ 2,560 $ 1,720 For the Three Months Ended September 29, 2023 September 30, 2022 OPERATING ACTIVITIES Net (loss) income $ (184) $ 29 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 76 135 Share-based compensation 25 29 Deferred income taxes 28 (5) Net loss on redemption and repurchase of debt 7 — Other non-cash operating activities, net (50) 13 Changes in operating assets and liabilities: Accounts receivable, net 100 434 Inventories 88 (41) Accounts payable (70) (300) Accrued employee compensation (12) (146) Accrued expenses, income taxes and warranty 54 4 Other assets and liabilities 65 93 Net cash provided by operating activities 127 245 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (70) (133) Proceeds from the sale of assets — 1 Purchases of investments — (1) Net cash used in investing activities (70) (133) FINANCING ACTIVITIES Redemption and repurchase of debt (1,288) — Dividends to shareholders (145) (147) Repurchases of ordinary shares — (408) Taxes paid related to net share settlement of equity awards (25) (39) Proceeds from issuance of long-term debt 1,500 600 Proceeds from issuance of ordinary shares under employee stock plans 35 29 Other financing activities, net (126) (1) Net cash (used in) provided by financing activities (49) 34 Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash 1 — Increase in cash, cash equivalents and restricted cash 9 146 Cash, cash equivalents and restricted cash at the beginning of the period 788 617 Cash, cash equivalents and restricted cash at the end of the period $ 797 $ 763 STATEMENTSTATEMENTS OF SHAREHOLDERS’ EQUITYSixThree Months Ended DecemberSeptember 29, 2017 Number
of
Ordinary
Shares Par Value
of Shares Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Total 292 $ — $ 6,152 $ (17 ) $ (4,771 ) $ 1,364 340 340 6 6 4 35 35 (10 ) (361 ) (361 ) (1 ) (21 ) (21 ) (361 ) (361 ) 59 59 285 $ — $ 6,246 $ (11 ) $ (5,174 ) $ 1,061 Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Balance at June 30, 2023 207 $ — $ 7,373 $ 98 $ (8,670) $ (1,199) Net loss (184) (184) Other comprehensive loss (113) (113) Issuance of ordinary shares under employee share plans 2 35 35 Capped calls related to the issuance of convertible notes (95) (95) Tax withholding related to vesting of restricted share units — (25) (25) Dividends to shareholders ($0.70 per ordinary share) (146) (146) Share-based compensation 25 25 Balance at September 29, 2023 209 $ — $ 7,338 $ (15) $ (9,025) $ (1,702) Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Balance at July 1, 2022 210 $ — $ 7,190 $ 36 $ (7,117) $ 109 Net income 29 29 Other comprehensive income 37 37 Issuance of ordinary shares under employee share plans 2 29 29 Repurchases of ordinary shares (5) (400) (400) Tax withholding related to vesting of restricted share units (1) (39) (39) Dividends to shareholders ($0.70 per ordinary share) (145) (145) Share-based compensation 29 29 Balance at September 30, 2022 206 $ — $ 7,248 $ 73 $ (7,672) $ (351) (the(“STX”) and its subsidiaries (collectively, unless the context otherwise indicates, the “Company”) is a leading provider of data storage technology and infrastructure 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 (“SSD”) and their related controllers, solid state hybrid drives (“SSHD”SSDs”) and storage subsystems.Hard disk drivessubsystems and offers storage solutions such as a scalable edge-to-cloud mass data platform that includes data transfer shuttles and a storage-as-a-service cloud.Disk drivesHDDs 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 data centerHDD storage architecture, solid-state storage devicesarchitectures, SSDs use NAND flash memory integrated circuit assemblies as memory to store data with most SSDs using NAND-based flash memory. In addition to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a large hard disk drive and an SSD cache to improve performance of frequently accessed data.mission criticalmass capacity storage and nearline applicationslegacy markets. Mass capacity storage involves well-established use cases, such as hyperscale data centers and public clouds as well as emerging use cases. Legacy markets are those that the Company continues to sell to but does not plan to invest in enterprise serverssignificantly. The Company’s HDD and storage systems; edge compute / client compute applications, where its products are designed primarily for desktopSSD product portfolio includes Serial Advanced Technology Attachment (“SATA”), Serial Attached SCSI (“SAS”) and mobile computing; and edgenon-compute /client non-compute applications, where its products are designed forNon-Volatile Memory Express (“NVMe”) based designs to support a wide variety of end user devices such as portable external storage systems, surveillance systems, network-attached storage (“NAS”), digital video recorders (“DVRs”)mass capacity and gaming consoles.cloud systems and solutions extend innovation from the device into the information infrastructure, onsite and in the cloud. Its portfolio includes modularstorage subsystems for enterprises, cloud service providers (“CSPs”), scale-out storage servers and original equipment manufacturers (“OEM”OEMs”). Engineered for modularity, mobility, capacity and performance, these solutions include the Company’s enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage systemswithin existing environments or create new ecosystems from the ground up in a secure, cost-effective manner.scale-outsecure 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 and a storage-as-a-service cloud offering that provides frictionless mass capacity storage servers.condensed consolidated financial statementsCondensed 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.generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statementsCondensed Consolidated Financial Statements and accompanying notes. 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 condensed consolidated financial statements reflect, in the opinion of management, all material adjustments necessary to present fairly the condensed consolidated financial position, results of operations, comprehensive income, cash flows and shareholders’ equity for the periods presented. Such adjustments are of a normal and recurring nature. Certain prior period amounts in the condensed consolidated financial statements and notes to the condensed consolidated financial statements have been reclassified to conform to the current period’s presentation.2017,2023 are included in its Annual Report onForm 10-K, as filed with the United StatesU.S. Securities and Exchange Commission (“SEC”) on August 4, 2017.2023. The Company believes that the disclosures included in thethese unaudited condensed consolidated financial statements,Condensed Consolidated Financial Statements, when read in conjunction with its Consolidated Financial Statements as of June 30, 2017,2023, and the notes thereto, are adequate to make the information presented not misleading.and six months ended DecemberSeptember 29, 2017,2023 are not necessarily indicative of the results of operations to be expected for any subsequent interim period inor for the Company’s fiscal year ending June 29, 2018. 28, 2024.and six months ended DecemberSeptember 29, 20172023 and the three and six months ended DecemberSeptember 30, 20162022 consisted of 13 weeksweeks. Fiscal years 2024 and 26 weeks, respectively. Fiscal year 2018 will be comprised of2023 both comprise 52 weeks and will end on June 29, 2018.28, 2024 and June 30, 2023, respectively. The fiscal quarters ended December 29, 2017, September 29, 2017,2023, June 30, 2023 and DecemberSeptember 30, 2016,2022, are also referred to herein as the “December 2017“September 2023 quarter”, the “June 2023 quarter” and the “September 20172022 quarter”, and the “December 2016 quarter”, respectively.Theresignificantmaterial changes into the Company’s significant accounting policies. Please refer topolicies disclosed in Note 11. Basis of Presentation and Summary of Significant Accounting Policies of “Financial Statements and Supplementary Data” contained in Part II, Item 88. of the Company’s Annual Report onForm 10-K for the fiscal year ended June 30, 2017,2023, as filed with the SEC on August 4, 2017 for a discussion2023.the Company’s other significant accounting policies.Recently Issued Accounting PronouncementsIn May 2014, August 2015, April 2016, May 2016 and December 2016, the Financial Accounting Standards Board (“FASB”) issuedASU 2014-09 (ASC Topic 606), Revenueits fixed assets on an ongoing basis. Effective from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016-10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing,ASU 2016-12 (ASC Topic 606) Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, andASU 2016-20 (ASC Topic 606) Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, respectively. ASC Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is required to adopt the guidance in the first quarter of fiscal 2019.year 2024, the Company changed the useful lives of certain manufacturing equipment from a range of three to seven years to a range of three to ten years based on its review of technology product roadmap. The effect of this change in estimate increased the net income and diluted earnings per share by approximately standard may be applied retrospectively to all prior periods presented, or retrospectively withASU requires disclosure of key terms of the outstanding supplier finance programs and a cumulative adjustment to retained earningsroll forward of the related obligations. The Company adopted this guidance in the year of adoption (“modified retrospective transition approach”). Based on its assessment, the Company plans to adopt the new revenue standard in the first quarter of fiscal 2019, utilizing the modified retrospective method of transition. While management has not yet completed its assessment of the impact of adopting this new standard on the Company’s consolidated financial statements, the Company expects theended September 29, 2023. The adoption of the new standard will result in the recognition of revenues generally uponshipment (sell-in basis) for sales of products to certain direct retail customers and customers in certain indirect retail channels which are currently being recognized on a sell-through basis. Accordingly, the Company will need to estimate variable consideration (e.g. rebates) related to customer incentives on these arrangements. These changes arethis ASU did not expected to have a material impact on the Company’s condensed consolidated financial statements.In January 2016, the FASB issuedASU 2016-01 (ASCSubtopic 825-10),Condensed Consolidated Financial Instruments—Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The Company is required to adopt the guidance in the first quarter of fiscal 2019. Early adoption is permitted for only certain portions of the ASU. The Company expects to elect the measurement alternative for measurement of equity investments, defined as cost, less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “Price Changes”) until the equity investments’ fair value becomes readily determinable. The amount of the impact to equity investments will depend on any Price Changes observed after adoption in the first quarter of fiscal 2019.In February 2016, the FASB issuedASU 2016-02 (ASC Topic 842), Leases. The ASU amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet asa right-of-use asset and corresponding lease liability, measured at the present value of the lease payments. The Company is required to adopt the guidance in the first quarter of fiscal 2020. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.In January 2017, the FASB issuedASU 2017-01 (ASC Topic 805), Business Combination: Clarifying the Definition of a Business. The amendments in this ASU change the definition of a business to assist with evaluating when a set of transferred assets and activities is a business. The Company plans to adopt the guidance in the first quarter of fiscal 2019. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.In May 2017, the FASB issuedASU 2017-09 (ASC Topic 718), Stock Compensation: Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company plans to adopt the guidance in the first quarter of fiscal 2019. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.Recently Adopted Accounting PronouncementsIn July 2015, the FASB issuedASU 2015-11 (ASC Topic 330), Inventory: Simplifying the Measurement of Inventory. The amendments in this ASU require inventory measurement at the lower of cost and net realizable value. This ASU became effective and was adopted by the Company in the September 2017 quarter on a prospective basis. The adoption of this guidance had no material impact on the Company’s condensed consolidated financial statements and disclosures.In March 2016, the FASB issuedASU 2016-09 (ASC Topic 718), Stock Compensation—Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU are intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax consequences, classification on the consolidated statement of cash flows and treatment of forfeitures. This ASU became effective and was adopted by the Company in the September 2017 quarter. Upon adoption, excess tax benefits or deficiencies from share-based award activity are reflected in the condensed consolidated statements of operations as a component of the provision for income taxes, whereas they previously were recognized in the Shareholder’s equity in the condensed consolidated balance sheets. The Company also elected to continue to account for share-based compensation expense net of estimated forfeitures. The adoption of this ASU resulted in an increase in deferred tax assets relating to net operating losses of approximately $0.6 billion, offset by an equivalent increase in the valuation allowance with no impact to retained earnings. The adoption of this guidance had no material impact on the Company’s condensed consolidated financial statements and disclosures.In October 2016, the FASB issuedASU 2016-16 (ASC Topic 740), Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. The amendments in this ASU require the recognition of the income tax consequences for intra-entity transfers of assets other than inventory when the transfer occurs. The Company elected to adopt this ASU in the September 2017 quarter on a modified retrospective basis with no material impact on the Company’s condensed consolidated financial statements and disclosures.2.Balance Sheet InformationInvestmentsDecemberSeptember 29, 2017: Amortized
Cost Unrealized
Gain/(Loss) Fair
Value $ 674 $ — $ 674 390 — 390 $ 1,064 $ — $ 1,064 $ 1,060 4 $ 1,064 September 29, 2023 June 30, 2023 (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 $ 121 $ — $ 121 $ 73 $ — $ 73 Time deposits and certificates of deposit 1 — 1 1 — 1 Other debt securities 15 — 15 16 — 16 Total $ 137 $ — $ 137 $ 90 $ — $ 90 Included in Cash and cash equivalents $ 120 $ 72 Included in Other current assets 2 2 Included in Other assets, net 15 16 Total $ 137 $ 90 DecemberSeptember 29, 2017,2023 and June 30, 2023, the Company’s Other current assets included $4 $2 million in restricted cash and investmentsequivalents held as collateral at banks for various performance obligations.DecemberSeptember 29, 2017,2023 and June 30, 2023, the CompanyCompany had no materialavailable-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined that no impairment related to credit losses for available-for-sale debt securities were other-than-temporarily impaired as of DecemberSeptember 29, 2017.DecemberSeptember 29, 2017,2023, by remaining contractual maturity were as follows: Amortized
Cost Fair
Value $ 1,064 $ 1,064 — — — — — — $ 1,064 $ 1,064 The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of June 30, 2017: Amortized
Cost Unrealized
Gain/(Loss) Fair
Value $ 594 $ — $ 594 584 — 584 $ 1,178 $ — $ 1,178 $ 1,174 4 $ 1,178 As of June 30, 2017, the Company’s Other current assets included $4 million in restricted cash and investments held as collateral at banks for various performance obligations.As of June 30, 2017, the Company had no materialavailable-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined noavailable-for-sale securities were other-than-temporarily impaired as of June 30, 2017.(Dollars in millions) Amortized Cost Fair Value Due in less than 1 year $ 122 $ 122 Due in 1 to 5 years 15 15 Due in 6 to 10 years — — Thereafter — — Total $ 137 $ 137 December 29,
2017 June 30,
2017 December 30,
2016 July 1,
2016 $ 2,556 $ 2,539 $ 1,716 $ 1,125 4 4 4 7 $ 2,560 $ 2,543 $ 1,720 $ 1,132 (Dollars in millions) September 29, 2023 June 30, 2023 September 30, 2022 July 1, 2022 Cash and cash equivalents $ 795 $ 786 $ 761 $ 615 Restricted cash included in Other current assets 2 2 2 2 Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows $ 797 $ 788 $ 763 $ 617 sheetsheets item: December 29,
2017 June 30,
2017 $ 303 $ 350 296 257 415 375 $ 1,014 $ 982 (Dollars in millions) September 29, 2023 June 30, 2023 Raw materials and components $ 243 $ 241 Work-in-process 657 682 Finished goods 152 217 Total inventories $ 1,052 $ 1,140 (Dollars in millions) September 29, 2023 June 30, 2023 Vendor receivables $ 109 $ 167 Other current assets 159 191 Total $ 268 $ 358 December 29,
2017 June 30,
2017 $ 9,422 $ 9,633 (7,660 ) (7,758 ) $ 1,762 $ 1,875 (Dollars in millions) September 29, 2023 June 30, 2023 Property, equipment and leasehold improvements $ 10,260 $ 10,267 Accumulated depreciation and amortization (8,608) (8,561) Property, equipment and leasehold improvements, net $ 1,652 $ 1,706 sheetsheets item: December 29,
2017 June 30,
2017 $ 179 $ 184 460 466 $ 639 $ 650 (Dollars in millions) September 29, 2023 June 30, 2023 Dividends payable $ 146 $ 145 Other accrued expenses 644 603 Total $ 790 $ 748 (Loss) (“AOCI”) Unrealized
Gains (Losses)
on Cash Flow
Hedges Unrealized
Gains (Losses)
on Marketable
Securities Unrealized
Gains (Losses)
on Post-
Retirement
Plans Foreign
Currency
Translation
Adjustments Total $ — $ — $ (5 ) $ (12 ) $ (17 ) — — — 6 6 — — — — — — — — 6 6 $ — $ — $ (5 ) $ (6 ) $ (11 ) $ (1 ) $ — $ (7 ) $ (17 ) $ (25 ) (3 ) — — (6 ) (9 ) 1 — — — 1 (2 ) — — (6 ) (8 ) $ (3 ) $ — $ (7 ) $ (23 ) $ (33 ) 3.DebtShort-Term Borrowings(Dollars in millions) Unrealized Gains/(Losses) on Cash Flow Hedges Unrealized Gains/(Losses) on Post-Retirement Plans Foreign Currency Translation Adjustments Total Balance at June 30, 2023 $ 103 $ (4) $ (1) $ 98 Other comprehensive income before reclassifications (22) — — (22) Amounts reclassified from AOCI (92) — 1 (91) Other comprehensive loss (114) — 1 (113) Balance at September 29, 2023 $ (11) $ (4) $ — $ (15) Balance at July 1, 2022 $ 51 $ (14) $ (1) $ 36 Other comprehensive income before reclassifications 32 1 — 33 Amounts reclassified from AOCI 5 — (1) 4 Other comprehensive income 37 1 (1) 37 Balance at September 30, 2022 $ 88 $ (13) $ (2) $ 73 credit agreement entered intofollowing table provides details of the Company’s debt as of September 29, 2023 and June 30, 2023:
_____________________________(Dollars in millions) September 29, 2023 June 30, 2023 $ 479 $ 479 504 504 467 465 163 163 500 500 275 275 72 72 500 500 750 750 489 489 1,500 — Term Loans — 430 — 430 — 430 5,699 5,487 Less: unamortized debt issuance costs (33) (36) Debt, net of debt issuance costs 5,666 5,451 Less: current portion of long-term debt — (63) Long-term debt, less current portion $ 5,666 $ 5,388 the Company and its subsidiary Seagate HDD Cayman on January 18, 2011 and subsequently amended (the “Revolving Credit Facility”) provides the Company with a $700 million senior secured revolving credit facility. The term of the Revolving Credit Facility is through January 15, 2020, provided that if the Company does not have Investment Grade Ratings (as defined in the Revolving Credit Facility) on August 15, 2018, then the maturity date will be August 16, 2018 unless certain extension conditions have been satisfied. The loans made under the Revolving Credit Facility will bear interest at a rate of LIBOR plus a variable margin that will be determined based on the corporate credit rating of the Company. The Company and certain of its material subsidiaries fully and unconditionally guarantee the Revolving Credit Facility. The Revolving Credit Facility is available for cash borrowings, subject to compliance with certain covenants and other customary conditions to borrowing, and for the issuance of letters of credit up to asub-limit of $75 million.The Revolving Credit Facility, as amended, includes three financial covenants: (1) minimum cash, cash equivalents and marketable securities; (2) a fixed charge coverage ratio; and (3) a net leverage ratio. On April 27, 2016, the Revolving Credit Agreement was amended in order to increase the allowable net leverage ratio to allow for higher net leverage levels. The Company was in compliance with the modified covenants as of December 29, 2017 and expects to be in compliance for the next 12 months.As of December 29, 2017, no borrowings had been drawn or letters of credit utilized under the Revolving Credit Facility.Long-Term Debt$800 million Aggregate Principal Amount of 3.75% Senior Notes due November 2018 (the “2018 Notes”). The interest on the 2018 Notes is payable semi-annually on May 15 and November 15 of each year. The issuer under the 2018 Notes is (“Seagate HDD Cayman,HDD”), and the obligations under the 2018 Notesthese notes are fully and unconditionally guaranteed, on a senior unsecured basis, by the Company. During the threeSeagate Technology Unlimited Company (“STUC”)six months ended December 29, 2017, the Company repurchased $128 millionSTX.$150related Capped Call Transactions2018initial purchasers to purchase additional notes. The 2028 Notes respectively, for cash at a premium to their principal amount, plus accrued and unpaid interest. The Company recorded a loss of approximately $2 millionwill mature on repurchases during the three and six months ended December 29, 2017 which is included in Other, net on the Condensed Consolidated Statements of Operations. The remainder of the 2018 Notes are classified as Current portion of long-term debt on the Company’s Condensed Consolidated Balance Sheet at December 29, 2017.$750 million Aggregate Principal Amount of 4.25% Senior Notes due March 2022 (the “2022 Notes”). TheJune 1, 2028, with interest on the 2022 Notes is payable semi-annually on March 1 and September 1 of each year. year, commencing March 1, 2024.issuerentire outstanding principal amount of Term Loans A1, A2 and A3 were repaid from the proceeds of the 2028 Notes issuance. The exchange was accounted for as a debt extinguishment and the Company recorded a net loss of $29 million, which was included in the Net loss recognized from early redemption of debt in the Company’s Condensed Consolidated Statements of Operations for the first quarter of fiscal year 2024. In connection with the repayment of Term Loans, the Company terminated its interest rate swap agreements. Refer to “Note 6. Derivative Financial Instruments” for more details.2022indenture with respect to the 2028 Notes. On or after March 1, 2028, the 2028 Notes are convertible at any time at the option of the holders until the close of business on the second scheduled trading day immediately preceding the maturity date, unless the 2028 Notes have been previously redeemed or repurchased by Seagate HDD. Upon exchange of the 2028 Notes, Seagate HDD will pay cash up to the aggregate principal amount of 2028 Notes to be exchanged and will pay or cause to be delivered, as the case may be, cash, ordinary shares of the Company or a combination of cash and ordinary shares of the Company, at Seagate HDD’s election, in respect of any remainder of the exchange obligation in excess of such principal amount. The initial exchange rate for the 2028 Notes is 12.1253 ordinary shares per $1,000 principal amount of 2028 Notes.Cayman,may redeem the 2028 Notes at its option, in whole but not in part, if Seagate HDD or the Guarantors have, or on the next interest payment date would, become obligated to pay to the holder of any Note additional amounts as a result of certain tax-related events at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date; provided that Seagate HDD may only redeem the Notes if: (x) Seagate HDD or the relevant Guarantor cannot avoid these obligations by taking commercially reasonable measures available to Seagate HDD or such Guarantor; and (y) Seagate HDD delivers to the Trustee an opinion of outside legal counsel of recognized standing in the relevant taxing jurisdiction attesting to such tax-related event and obligation to pay additional amounts.obligations underaggregate face amount of certain letters of credit exceeds 25% of the 2022 Notes are fully and unconditionally guaranteed, on a senior unsecured basis, bythen outstanding revolving commitments in effect (the “Testing Condition”) as of the Company.$1 billion Aggregate Principal Amountlast day of 4.75% Senior Notes duethe fiscal quarter. The maximum permitted total leverage ratio for each fiscal quarter ending after June 2023 (the “2023 Notes”).27, 2025 is 4.00 to 1.00.oncoverage ratio is 2.25 to 1.00 for the 2023 Notes is payable semi-annually on June 1 and December 1 of each year. The issuer underfiscal quarter ending September 29, 2023. For 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 the Company.$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 the Company.$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 the Company.$700 million Aggregate Principal Amount of 4.875% Senior Notes due June 2027 (the “2027 Notes”). The interest on the 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 the Company.$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 the Company.Atfiscal quarters ending December 29, 2017,2023 and March 29, 2024, the minimum interest coverage ratio covenant will not apply. For the fiscal quarters ending June 28, 2024 until June 27, 2025, the minimum interest coverage ratio is 2.25 to 1.00, and applies only to the extent that the Testing Condition is satisfied as of the last day of the fiscal quarter. The minimum interest coverage ratio is 3.25 to 1.00 for each fiscal quarter ending after June 27, 2025. Amount $ — 560 — — 750 3,613 $ 4,923 4.Income TaxesFiscal Year Principal Amount Remainder of 2024 $ — 2025 479 2026 — 2027 505 2028 1,500 Thereafter 3,245 Total $ 5,729 provisionsprovision of $212$37 million and $219 million infor the three and six months ended DecemberSeptember 29, 2017, respectively.2023. The income tax provision included approximately $33 million of net discrete expense, primarily associated with an increase in the Company’s valuation allowance to account for the impacts of new tax guidance which clarifies the treatment of specified research and experimental expenditures issued by the U.S. Treasury Department under Internal Revenue Code Section 174 during the September 2023 quarter, partially offset by excess tax benefits related to share-based compensation expense. The Company will have income taxes payable based on profits generated in various jurisdictions.and six months ended December 29, 2017September 30, 2022 included approximately $197$7 million of net discrete tax expense,benefit, primarily associated with the revaluation of U.S. deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act on December 22, 2017, partially offset by the recognition of previously unrecognizedexcess tax benefits associated with the expiration of certain statutes of limitation.and six months ended DecemberSeptember 29, 20172023 and September 30, 2022 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 (i) tax benefits related tonon-U.S. (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) a reduction in the net U.S. deferred tax assets associated with revaluation to a lower U.S. tax rate.During the six months ended December 29, 2017, the Company’s unrecognized tax benefits excluding interest and penalties increased by approximately $1 million to $75 million. The unrecognized tax benefits that, if recognized, would impact the effective tax rate were $75 million at December 29, 2017, subject to certain future changesincrease in valuation allowance. During the 12 months beginning December 30, 2017, the Company expects that its unrecognized tax benefits could be reduced by approximately $2 million, primarily as a result of the expiration of certain statutes of limitation.an income tax provisionrestructuring and other, net of $13$2 million and $19 million in the three and six months ended December 30, 2016, respectively. The income tax provision for the six months ended December 30, 2016 included approximately $4 million of net discrete tax benefits, primarily associated with the release of tax reserves associated with the expiration of certain statutes of limitation and prior year tax adjustments.The Company’s income tax provision recorded for the three and six months ended December 30, 2016 differed from the provision from 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 (i) tax benefits related tonon-U.S. earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) a decrease in valuation allowance for certain deferred tax assets.On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law in the United States. The Act significantly revises U.S. corporate income tax law by, among other things, lowering U.S. corporate income tax rates from 35% to 21%, implementing a territorial tax system and imposing a tax on deemed repatriated earnings ofnon-U.S. subsidiaries. The Act’s new international rules, including the Global IntangibleLow-Taxed Income, the Foreign Derived Intangible Income and the Base Erosion Anti-Avoidance Tax, are not expected to have a material impact on the Company’s financial statements. However, these assessments are based on preliminary review and analysis of the Act and are subject to change as the Company continues to evaluate these highly complex rules as additional interpretive guidance is issued.Pursuant to SEC Staff Accounting Bulletin (SAB) 118 (regarding the application of ASC 740 associated with the enactment of the Act), the Company recorded a provisional tax expense of approximately $208$9 million, for the three months ended DecemberSeptember 29, 2017 tore-measure its U.S. deferred tax assets at2023 and September 30, 2022, respectively on the newly enacted 21% tax rate. The tax expense is provisional because the Company continues to evaluate the impact of various domestic and international provisions of the Act as well as the impact of additional guidance that may be provided. This provisional tax expense increased the Company’s effective tax rate for the three months ended December 29, 2017 to approximately 56%. Many of the other U.S. tax changes are not expected to impact the Company’s tax expense in the short-term due the Company’s large net operating loss and tax credit carryovers.5.AcquisitionsDot Hill Systems Corp.On October 6, 2015, the Company acquired all of the outstanding shares of Dot Hill Systems Corp. (“Dot Hill”), a supplier of software and hardware storage systems. The Company paid $9.75 per share, or $674 million, in cash for the acquisition. The acquisition of Dot Hill further expands the Company’sOEM-focused cloud storage systems business and advances the Company’s strategic efforts.The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: Amount $ 40 48 21 7 10 252 364 742 (68 ) (68 ) $ 674 The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized: Fair Value Weighted-
Average
Amortization
Period $ 164 5.0 years 71 7.0 years 3 5.0 years 238 5.5 years 14 $ 252 The recognized goodwill, which is not deductible for income tax purposes, is primarily attributable to cost synergies expected to arise after the acquisition and the benefits the Company expects to derive from enhanced market opportunities.6.Goodwill and Other Intangible AssetsGoodwillThe changes in the carrying amount of goodwill for the six months ended December 29, 2017, are as follows: Amount $ 1,238 — (1 ) 1 $ 1,238 Other Intangible AssetsOther intangible assets consist primarily of existing technology, customer relationships and trade names acquired in business combinations. Intangibles are amortized on a straight-line basis over the respective estimated useful lives of the assets. Amortization is charged to Operating expenses in the Condensed Consolidated Statements of Operations.carrying value of other intangible assets subject to amortization, excluding fully amortized intangible assets, as of December 29, 2017, is set forth in the following table: Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount Weighted-Average
Remaining Useful Life $ 279 $ (138 ) $ 141 3.2 years 105 (50 ) 55 4.3 years 17 (11 ) 6 1.7 years 36 (16 ) 20 2.2 years $ 437 $ (215 ) $ 222 3.2 years The carrying value of other intangible assets subject to amortization, excluding fully amortized intangible assets, as of June 30, 2017 is set forth in the following table: Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount Weighted-Average
Remaining Useful Life $ 280 $ (112 ) $ 168 3.6 years 487 (395 ) 92 3.4 years 27 (19 ) 8 2.1 years 29 (16 ) 13 2.6 years $ 823 $ (542 ) $ 281 3.4 years For the three and six months ended December 29, 2017, the amortization expense of other intangible assets were $33 million and $69 million, respectively. For the three and six months ended December 30, 2016, the amortization expense of other intangible assets was $42 million and $84 million, respectively. As of December 29, 2017, expected amortization expense for other intangible assets for each of the next five fiscal years and thereafter is as follows: Amount $ 40 71 53 25 17 16 $ 222 7.Restructuring and Exit CostsFor the three and six months ended December 29, 2017, the Company recordedCompany’s restructuring charges of approximately $33 million and $84 million, respectively,plans are comprised primarily of charges related to workforce reduction costs, including severance and facilityother one-time termination benefits, facilities and other exit costs associated with the restructuring of its workforce during the fiscal year.costs. The Company’s significant restructuring plans are described below. All restructuring charges are reported in Restructuring and other, net on the Condensed Consolidated StatementsDecember 8, 2017,October 24, 2022, the Company committed to aan October 2022 restructuring plan (the “December 2017“October 2022 Plan”) to reduce its cost structure. The December 2017structure to better align the Company’s operational needs to current economic conditions while continuing to support the long-term business strategy. On March 29, 2023, in light of further deteriorating economic conditions, the Company committed to an expansion of the October 2022 Plan included reducing the Company’sto further reduce its global headcount by approximately 500480 employees to a total reduction of approximately 3,480 employees. This expanded plan included aligning its business plan to near-term market conditions, along with other cost saving measures. The December 2017October 2022 Plan is expected to bewas substantially completed by the end of fiscal year 2018.July 20172023.July 25, 2017,April 20, 2023, the Company committed to aan April 2023 restructuring plan (the “July 2017“April 2023 Plan”) to further reduce its cost structure.structure in response to changes in macroeconomic and business conditions. The July 2017April 2023 Plan included reducingwas intended to align the Company’s global headcount by approximately 600 employees.operational needs with the near-term demand environment while continuing to support the long-term business strategy. The July 2017April 2023 Plan was largely completed by the end of the September 2017 quarter.March 2017 Plan -On March 9, 2017, the Company committed to a restructuring plan (the “March 2017 Plan”) in connection with the continued consolidation of its global footprint. The Company closed its design center in Korea, resulting in the reduction of the Company’s headcount by approximately 300 employees. The March 2017 Plan was largelysubstantially completed by the end of fiscal year 2017.July 2016 Plan - On July 11, 2016,2023.Company committed to aCompany’s restructuring plan (the “July 2016 Plan”) for continued consolidationactivities under its active restructuring plans:April 2023 Plan October 2022 Plan Other Plans (Dollars in millions) Workforce Reduction Costs Facilities and Other Exit Costs Workforce Reduction Costs Facilities and Other Exit Costs Workforce Reduction Costs Facilities and Other Exit Costs Total Accrual balances at June 30, 2023 $ 108 $ — $ 1 $ 5 $ 1 $ 4 $ 119 Restructuring charges — — — — 3 — 3 Cash payments (87) — (1) — (1) — (89) Adjustments (1) — — — — — (1) Accrual balances at September 29, 2023 $ 20 $ — $ — $ 5 $ 3 $ 4 $ 32 Total costs incurred inception to date as of September 29, 2023 $ 144 $ 3 $ 104 $ 7 $ 66 $ 13 $ 337 Total expected charges to be incurred as of September 29, 2023 $ — $ — $ — $ — $ — $ 1 $ 1 its global footprint across Asia, EMEA$32 million at September 29, 2023, $30 million was included in Accrued expenses and the Americas. The July 2016 Plan included reducing worldwide headcount by approximately 6,500 employees. The July 2016 Plan$2 million was largely completed by the end of the December 2017 quarter.In addition, during fiscal year 2017, the Company committed to sell certain land and buildings primarily in Asia as part of the March 2017 and July 2016 plans, which accordingly met the criteria to be classified as assets held for sale and were reclassified to Other current assets at that time. These assets remained included in Other current assets onnon-current liabilities in the Company’s Condensed Consolidated Balance Sheet asSheets. Of the accrued restructuring balance of December 29, 2017. December 2017 Plan July 2017 Plan March 2017 Plan July 2016 Plan Other Plans Workforce
Reduction
Costs Facilities
and
Other
Exit
Costs Workforce
Reduction
Costs Facilities
and
Other
Exit
Costs Workforce
Reduction
Costs Facilities
and
Other
Exit
Costs Workforce
Reduction
Costs Facilities
and
Other
Exit
Costs Workforce
Reduction
Costs Facilities
and
Other
Exit
Costs Total Accrual balances at June 30, 2017 $ — $ — $ — $ — $ — $ — $ 22 $ 2 $ 6 $ 13 $ 43 27 — 38 4 — — 1 9 2 — 81 (3 ) — (35 ) (3 ) — — (21 ) (11 ) (7 ) — (80 ) — — (1 ) — 2 — 2 — — — 3 Accrual balances at December 29, 2017 $ 24 $ — $ 2 $ 1 $ 2 $ — $ 4 $ — $ 1 $ 13 $ 47 Total costs incurred to date as of December 29, 2017 $ 27 $ — $ 37 $ 4 $ 31 $ 3 $ 82 $ 29 $ 228 $ 51 $ 492 Total expected charges to be incurred as of December 29, 2017 $ 3 $ 7 $ — $ — $ — $ 1 $ 1 $ 4 $ — $ 3 $ 19 Restructuring charges for the three months ended December 29, 2017 $ 27 $ — $ (1 ) $ — $ 1 $ — $ 2 $ 3 $ 1 $ — $ 33 8.Derivative Financial InstrumentsTheFrom 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 theon its Condensed Consolidated Balance Sheets at fair value. The changes in the fair value of thehighly effective portions of designated cash flow hedges are recorded in Accumulated other comprehensive lossAOCI until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedgesor are not assessed to be highly effective are adjusted to fair value through earnings. The Company had no outstandingamount of net unrealized loss on cash flow hedges was $14 million as of DecemberSeptember 29, 20172023 and the amount of net unrealized gain on cash flow hedges was $12 million as of June 30, 2017.dedesignatesde-designates its cash flow hedges when the forecasted hedged transactions are realizedaffect 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 lossAOCI on the Company’s Condensed Consolidated Balance Sheets are reclassified immediately into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings.Company did not recognize anyfollowing 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 months ended September 29, 2023:Location of Gain/(Loss) Recognized in Income on Derivatives Amount of Gain/(Loss) Recognized in Income on Derivatives Foreign currency forward exchange contracts Other, net $ (6) Total return swap Operating expenses (3)
_____________________________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) Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) Foreign currency forward exchange contracts $ (7) Cost of revenue $ (1) Other, net $ — Interest rate swap (15) Interest expense 11 Net gain recognized from termination of interest rate swap 104 gains or losses related togain recognized into earnings as a result of the lossdiscontinuance of hedge designation on discontinued cash flow hedgesinterest rate swap during the three and six months ended DecemberSeptember 29, 2017.As2023.December 29, 2017the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and Junethe Condensed Consolidated Statements of Operations for the three months ended September 30, 2017,2022:Location of Gain/(Loss) Recognized in Income on Derivatives Amount of Gain/(Loss) Recognized in Income on Derivatives Foreign currency forward exchange contracts Other, net $ (10) Total return swap Operating expenses (8) 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) Foreign currency forward exchange contracts $ (20) Cost of revenue $ (7) Other, net $ (1) Interest rate swap 52 Interest expense 2 Interest expense — does not haveuses to hedge the foreign currency exposure on forecasted expenditures denominated in currencies other than the U.S. dollar. The Company also enters into foreign currency forward contracts with contractual maturities of less than one month, which are designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities. 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.contracts. As of September 29, 2023 (Dollars in millions) Contracts Designated as Hedges Contracts Not Designated as Hedges Singapore Dollar $ 154 $ 154 Thai Baht 112 19 Chinese Renminbi 53 13 British Pound Sterling 43 20 Total $ 362 $ 206 As of June 30, 2023 (Dollars in millions) Contracts Designated as Hedges Contracts Not Designated as Hedges Singapore Dollar $ 195 $ 161 Thai Baht 129 16 Chinese Renminbi 64 12 British Pound Sterling 57 8 Total $ 445 $ 197 Non-qualified Deferred Compensation Plan—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 SDCPSDCP’s liabilities. The Company pays a floating rate, based on LIBORSOFR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP liabilitySDCP’s liabilities due to changes in the value of the investment options made by employees. As of DecemberSeptember 29, 2017,2023, the notional investments underlying the TRS amounted to $117 million. The$101 million and the contract term of the TRS is through January 2019 and is2024, settled on a monthly basis, therefore limiting counterparty performance risk. The Company did not designate the TRS as a hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of the SDCPSDCP’s liabilities.AsCompany had no outstanding foreign currency forward exchange contracts and theCompany’s derivative instruments measured at gross fair value of the TRSas reflected in the Condensed Consolidated Balance Sheets respectively, is immaterial.The following tables show the effectas of the Company’s derivative instruments on the Condensed Consolidated Statement of Comprehensive IncomeSeptember 29, 2023 and the Condensed Consolidated Statement of Operations for the three and six months ended December 29, 2017. Location of Gain or
(Loss) Recognized in
Income on Derivatives Amount of Gain or
(Loss) Recognized in
Income on Derivatives For the Three Months For the Six Months Other, net $ — $ — Operating expenses 4 7 The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statement of Comprehensive Income and the Condensed Consolidated Statement of Operations for the three and six months ended DecemberJune 30, 2016: Amount of
Gain or
(Loss)
Recognized
in OCI on
Derivatives
(Effective
Portion) Location of
Gain or (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion) Amount of
Gain or
(Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion) Location of
Gain or (Loss)
Recognized in
Income on
Derivatives
(Ineffective
Portion and
Amount Excluded
from
Effectiveness
Testing) Amount of
Gain
or (Loss)
Recognized in
Income
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing) (a) For the
Three
Months For the
Six
Months For the
Three
Months For the
Six
Months For the
Three
Months For the
Six
Months $ (2 ) $ (3 ) Cost of revenue $ — $ (1 ) Cost of revenue $ — $ — Location of Gain or
(Loss) Recognized in
Income on Derivatives Amount of Gain or
(Loss) Recognized in
Income on Derivatives For the Three Months For the Six Months Other, net $ (2 ) $ (3 ) Operating expenses 1 $ 4 (a)The amountAs of gain or (loss) recognizedSeptember 29, 2023Derivative Assets Derivative Liabilities (Dollars in income related to the ineffective portion of themillions)Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging relationships and the amount excluded from the assessment of hedge effectiveness were less than $1 million for the three and six months ended December 30, 2016.instruments:Foreign currency forward exchange contracts Other current assets $ — Accrued expenses $ (14) Derivatives not designated as hedging instruments: Foreign currency forward exchange contracts Other current assets — Accrued expenses (4) Total derivatives $ — $ (18) 9.Fair ValueAs of June 30, 2023 Derivative Assets Derivative Liabilities (Dollars in millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Foreign currency forward exchange contracts Other current assets $ 2 Accrued expenses $ (10) Interest rate swap Other current assets 20 Accrued expenses — Derivatives not designated as hedging instruments: Foreign currency forward exchange contracts Other current assets — Accrued expenses (1) Total return swap Other current assets 1 Accrued expenses — Total derivatives $ 23 $ (11) reflectsreflect 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:September 29, 2023 June 30, 2023 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 $ 120 $ — $ — $ 120 $ 72 $ — $ — $ 72 Total cash equivalents 120 — — 120 72 — — 72 Restricted cash and investments: Money market funds 1 — — 1 1 — — 1 Time deposits and certificates of deposit — 1 — 1 — 1 — 1 Other debt securities — — 15 15 — — 16 16 Derivative assets — — — — — 23 — 23 Total assets $ 121 $ 1 $ 15 $ 137 $ 73 $ 24 $ 16 $ 113 Liabilities: Derivative liabilities $ — $ 18 $ — $ 18 $ — $ 11 $ — $ 11 Total liabilities $ — $ 18 $ — $ 18 $ — $ 11 $ — $ 11 September 29, 2023 June 30, 2023 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 $ 120 $ — $ — $ 120 $ 72 $ — $ — $ 72 Other current assets 1 1 — 2 1 24 — 25 Other assets, net — — 15 15 — — 16 16 Total assets $ 121 $ 1 $ 15 $ 137 $ 73 $ 24 $ 16 $ 113 Liabilities: Accrued expenses $ — $ 18 $ — $ 18 $ — $ 11 $ — $ 11 Total liabilities $ — $ 18 $ — $ 18 $ — $ 11 $ — $ 11 December 29, 2017: Fair Value Measurements at Reporting Date Using Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total
Balance $ 673 $ — $ — $ 673 — 387 — 387 673 387 — 1,060 1 — — 1 — 3 — 3 $ 674 $ 390 $ — $ 1,064 Fair Value Measurements at Reporting Date Using Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total
Balance $ 673 $ 387 $ — $ 1,060 1 3 — 4 $ 674 $ 390 $ — $ 1,064 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 June 30, 2017: Fair Value Measurements at Reporting Date Using Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total
Balance $ 593 $ — $ — $ 593 — 581 — 581 593 581 — 1,174 1 — — 1 — 3 — 3 $ 594 $ 584 $ — $ 1,178 Fair Value Measurements at Reporting Date Using Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total
Balance $ 593 $ 581 $ — $ 1,174 1 3 — 4 $ 594 $ 584 $ — $ 1,178 valuesvalue of all of its cash equivalents. For the cash equivalents and short-term investments in the Company’s portfolio, multiple pricing sources are generally available. The pricing service uses inputs from multiple industry standardindustry-standard data providers or other third partythird-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 DecemberSeptember 29, 2017,2023, 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 consolidated financial statementsCondensed 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.As of December 29, 2017 and June 30, 2017, the Company had no Level 3 assets or liabilities measured at fair value on a recurring basis.objectives. These strategic investments primarily include cost basis investments representing those whereobjectives, which are accounted for either under the Company does not have the ability to exercise significant influence as well as equity method investments representing those whereor the Company does havemeasurement alternative. Investments under the ability to exercise significant influence but does not have control. These investmentsmeasurement alternative are included in Other assets, netrecorded at cost, less impairment and adjusted for qualifying observable price changes on a prospective basis. If measured at fair value in the Condensed Consolidated Balance Sheets, these investments would generally be classified in Level 3 of the fair value hierarchy.periodically analyzedaccounted for under the measurement alternative, there was no adjustment for the three months ended September 29, 2023. The Company recorded a net gain of $3 million for the three months ended September 30, 2022, which remained unrealized as of September 30, 2022, related to determine whether or not there are indicatorsupward adjustments due to observable price changes. As of impairment. TheSeptember 29, 2023 and June 30, 2023, the carrying value of the Company’s strategic investments at December 29, 2017 and June 30, 2017 totaled $129under the measurement alternative was $89 million and $125$88 million, respectively, and consisted primarilyrespectively.privately held equity securities without a readily determinable fair value.For the three and six months ended December 29, 2017, the Company did not have any equity investments accounted for under the cost method that were other-than-temporarily impaired and did not record any impairment charges. For the six months ended December 30, 2016, the Company determined that a certain equity investment accounted for under the cost method was other-than-temporarily impaired, and recognized a charge of $25 million in order to write down the carrying amount of the investment to zero. Since there was no active market for the equity securities of the investee, the Company estimated fair value of the investee by analyzing the underlying cash flows and future prospects of the investee. These amounts were recorded in Other, net in the Condensed Consolidated Statements of Operations. The Company did not record any impairment charges in the three months ended December 30, 2016.As of December 29, 2017 and June 30, 2017, the Company had $77 million held for sale assets included in Other current assets on the Condensed Consolidated Balance Sheets, which primarily consisted of $37 million of land and building in Korea and $26 million of land and building in China, with the remainder of the balance comprised of property at other locations (collectively, the “properties”). The respective properties to be sold met the criteria to be classified as held for sale during the quarters ended March 31, 2017 and June 30, 2017. Depreciation related to the properties ceased as of the date these were determined to be held for sale. During fiscal year 2017, the Company recorded impairment charges of $35 million to write down the carrying amount of such properties to their estimated fair values less costs to sell. The impairment charges were recorded in Operating expenses in the Condensed Consolidated Statement of Operations. No additional impairment charges related to these properties were recorded during the three and six months period ended December 29, 2017. The fair values were measured with the assistance of third-party valuation models which used inputs such as comparable market data for similar land sale transactions adjusted for differences in comparable properties to derive the estimated fair value of the subject properties and the cost approach valuation techniques for buildings as part of the analysis. The fair value measurement was categorized as Level 3 as significant unobservable inputs were used in the valuation analysis. December 29, 2017 June 30, 2017 Carrying
Amount Estimated
Fair Value Carrying
Amount Estimated
Fair Value $ 560 $ 567 $ 710 $ 726 748 758 748 765 951 972 951 987 497 504 497 511 975 961 975 984 695 668 695 698 489 473 489 488 $ 4,915 $ 4,903 $ 5,065 $ 5,159 (39 ) — (44 ) — $ 4,876 $ 4,903 $ 5,021 $ 5,159 (560 ) (567 ) — — $ 4,316 $ 4,336 $ 5,021 $ 5,159 10.Equity September 29, 2023 June 30, 2023 (Dollars in millions) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 4.75% Senior Notes due January 2025 $ 479 $ 468 $ 479 $ 472 4.875% Senior Notes due June 2027 504 477 504 484 3.50% Senior Notes due June 2028 1,500 1,550 — — 4.091% Senior Notes due June 2029 467 426 465 436 3.125% Senior Notes due July 2029 163 126 163 126 8.25% Senior Notes due December 2029 500 514 500 522 4.125% Senior Notes due January 2031 275 220 275 227 3.375% Senior Notes due July 2031 72 51 72 53 8.50% Senior Notes due July 2031 500 513 500 524 9.625% Senior Notes due December 2032 750 808 750 830 5.75% Senior Notes due December 2034 489 411 489 438 SOFR Based Term Loan A1 due September 2025 — — 430 426 SOFR Based Term Loan A2 due July 2027 — — 430 420 SOFR Based Term Loan A3 due July 2027 — — 430 413 $ 5,699 $ 5,564 $ 5,487 $ 5,371 Less: unamortized debt issuance costs (33) — (36) — Debt, net of debt issuance costs $ 5,666 $ 5,564 $ 5,451 $ 5,371 Less: current portion of debt, net of debt issuance costs — — (63) (62) Long-term debt, less current portion, net of debt issuance costs $ 5,666 $ 5,564 $ 5,388 $ 5,309 capitalcapital is $13,500 and consists of 1,250,000,000 ordinary shares, par value $0.00001, of which 284,573,784209,181,031 shares were outstanding as of DecemberSeptember 29, 2017,2023, and 100,000,000 preferred shares, par value $0.00001, of which none were issued or outstanding as of DecemberSeptember 29, 2017.— - Holders of ordinary shares are entitled to receive dividends aswhen and whenas declared by the Company’s board of directors (the “Board of Directors”). Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of preferred shares, any remaining assets of the Company 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.— - The Company may issue preferred shares in one 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.On April 22, 2015, the Board of Directors authorized the Company to repurchase $2.5 billion of its outstanding ordinary shares.Articles of Association.DecemberSeptember 29, 2017, $0.92023, $1.9 billion remained available for repurchase under the existing repurchase authorization limit.forthfsixthree months ended DecemberSeptember 29, 2017: Number of Shares
Repurchased Dollar Value of Shares
Repurchased 10 $ 361 1 21 11 $ 382 11.Share-based Compensation(In millions) Number of Shares Repurchased Dollar Value of Shares Repurchased Tax withholding related to vesting of equity awards — 25 Total — $ 25 Company recorded approximately $27 millionfollowing table provides information about disaggregated revenue by sales channel and $59 million of share-based compensation expense during the three and six months ended December 29, 2017, respectively. The Company recorded approximately $33 million and $73 million of share-based compensation expense during the three and six months ended December 30, 2016, respectively.12.GuaranteesIndemnifications to Officers and DirectorsOn May 4, 2009, Seagate Technology, an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Seagate-Cayman”), then the parent company, entered into a new form of indemnification agreement (the “Revised Indemnification Agreement”) with its officers and directors of Seagate-Cayman and its subsidiaries (each, an “Indemnitee”). The Revised Indemnification Agreement provides indemnification in addition to any of Indemnitee’s indemnification rights under Seagate-Cayman’s Articles of Association, 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 Seagate-Cayman or any of its subsidiaries, arising out of his or her service as a director, officer, employee or agent of Seagate-Cayman or any of its subsidiaries or of any other entity to which he or she provides services at Seagate-Cayman’s request. However, an Indemnitee shall not be indemnified under the Revised Indemnification Agreement for (i) any fraud or dishonesty in the performance of Indemnitee’s duty to Seagate-Cayman or the applicable subsidiary of Seagate- Cayman 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 Seagate-Cayman or the applicable subsidiary of Seagate-Cayman. In addition, the Revised Indemnification Agreement provides that Seagate-Cayman will advance expenses incurred by an Indemnitee in connection with enforcement of the Revised 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.On July 3, 2010, pursuant to a corporate reorganization, the common shareholders of Seagate-Cayman became ordinary shareholders of Seagate Technology plc (the “Company”) and Seagate-Cayman became a wholly owned subsidiary of the Company, as described more fully in the Current Report on Form8-K filed by the Company on July 6, 2010 (the “Redomestication”). On July 27, 2010, in connection with the Redomestication, the Company, as sole shareholder of Seagate-Cayman, approved a form of deed of indemnity (the “Deed of Indemnity”), which providesgeographical region for the indemnification by Seagate-Cayman of any director, officer, employee or agent of theCompany’s single reportable segment:
_____________________________For the Three Months Ended (Dollars in millions) September 29, 2023 September 30, 2022 Revenues by Channel OEMs $ 1,032 $ 1,545 Distributors 266 299 Retailers 156 191 Total $ 1,454 $ 2,035 Asia Pacific $ 811 $ 801 Americas 455 936 EMEA 188 298 Total $ 1,454 $ 2,035 Seagate-Cayman or any subsidiary of the Company (each, a “Deed Indemnitee”), in addition to any of a Deed Indemnitee’s indemnification rights under the Company’s Articles of Association, applicable law or otherwise, with a similar scope to the Revised Indemnification Agreement. Seagate-Cayman entered into the Deed of Indemnity with certain Deed Indemnitees effective as of July 3, 2010 and continues to enter into the Deed of Indemnity with additional Deed Indemnitees from time to time.thesethe Company’s 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.pay. Historically, the Company has not made any significant indemnification payments under such agreements andanaccompanying condensed consolidated financial statementsCompany’s Condensed Consolidated Financial Statements with respect to these indemnification obligations.Intellectual Property Indemnification ObligationsThe Company has entered into agreements with customers and suppliers that include limited intellectual property indemnification obligations that are customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a resultthird party intellectual property claims arising from these transactions. The nature of the intellectual property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to its customers and suppliers. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying condensed consolidated financial statements with respect to these indemnification obligations.and six months ended DecemberSeptember 29, 20172023 and DecemberSeptember 30, 20162022 were as follows: For the Three Months Ended For the Six Months Ended December 29,
2017 December 30,
2016 December 29,
2017 December 30,
2016 $ 230 $ 216 $ 233 $ 206 40 34 75 65 (27 ) (29 ) (54 ) (59 ) (7 ) 1 (18 ) 10 $ 236 $ 222 $ 236 $ 222 13.Earnings Per Share For the Three Months Ended (Dollars in millions) September 29, 2023 September 30, 2022 Balance, beginning of period $ 168 $ 148 Warranties issued 13 13 Repairs and replacements (18) (24) Changes in liability for pre-existing warranties, including expirations 13 12 Balance, end of period $ 176 $ 149 stockshare units and performance-based share units and shares to be purchased under the Employee Stock Purchase Plan (“ESPP”).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 (loss) income per share attributable to the shareholders of the Company: For the Three Months Ended For the Six Months Ended December 29,
2017 December 30,
2016 December 29,
2017 December 30,
2016 $ 159 $ 297 $ 340 $ 464 288 296 289 297 3 2 2 2 291 298 291 299 $ 0.55 $ 1.00 $ 1.18 $ 1.56 $ 0.55 $ 1.00 $ 1.17 $ 1.55 The anti-dilutive shares For the Three Months Ended (In millions, except per share data) September 29, 2023 September 30, 2022 Numerator: Net (loss) income $ (184) $ 29 Number of shares used in per share calculations: Total shares for purposes of calculating basic net (loss) income per share 208 208 Weighted-average effect of dilutive securities: Employee equity award plans — 2 Total shares for purposes of calculating diluted net (loss) income per share 208 210 Net (loss) income per share: Basic $ (0.88) $ 0.14 Diluted $ (0.88) $ 0.14 1 million and 26 million for the three and six months ended DecemberSeptember 29, 2017, respectively,2023, and 1 million and 2 millionwere not material for the three and six months ended DecemberSeptember 30, 2016, respectively.14.Legal, Environmental and Other ContingenciesIntellectual Property 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 infringe 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 Seagate 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 judgmentof 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 Seagate because Seagate’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 judgmentof non-infringement by Compaq’s accused products as toclaims 7-15 of the ‘473 patent; 4) reversed the district court’s summary judgmentof 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.Enova Technology Corporation v. Seagate Technology (US) Holdings, Inc., et al.On June 5, 2013, Enova Technology Corporation (“Enova”) filed a complaint against Seagate Technology (US) Holdings, Inc. and Seagate Technology LLC in the U.S. District Court for the District of Delaware alleging infringement of U.S. Patent No. 7,136,995 (the “‘995 patent”), “Cryptographic Device,” and U.S. Patent No. 7,900,057 (the “‘057 patent”), “Cryptographic Serial ATA Apparatus and Method.” The Company believes the claims are without merit and intends to vigorously defend this case. On April 27, 2015, the district court ordered a stay of the case, in view of proceedings regarding the ‘995 and ‘057 patents before the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. On September 2, 2015, PTAB issued its final written decision thatclaims 1-15 of the ‘995 patent are held unpatentable. On December 18, 2015, PTAB issued its final written decisions thatclaims 1-32 and 40-53 of the ‘057 patent are held unpatentable. On February 4, 2016, PTAB issued its final written decision thatclaims 33-39 of the ‘057 patent are held unpatentable. Enova appealed PTAB’s decisions on the ‘995 patent and the ‘057 patent to the U.S. Court of Appeals for the Federal Circuit. On March 20, 2017, the court of appeals issued its judgment affirming PTAB’s decision on the ‘995 patent. On September 6, 2017, the court of appeals issued its judgment affirming PTAB’s decision on the ‘057 patent. On November 27, 2017, Enova filed a petition for writ of certiorari with the U.S. Supreme Court challenging the court of appeals’ decision on the ‘057 Patent. The Supreme Court has not yet ruled on this petition. The district court case remains stayed. In view of the uncertainty regarding the amount of damages, if any, that could be awarded 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.Methods.Methods,” seeking damages as well as additional relief. The district court entered judgement in favor of Seagate on April 19, 2022. The parties filed post-trial motions with the district court in May 2022. On November 22, 2022, the court denied all pending post-trial motions. Lambeth Magnetic Structures LLC filed a notice of appeal to the Federal Circuit on December 20, 2022. A hearing date has not been set. The Company believes the claims asserted in the complaintclaims are without merit and intends to vigorously defend this case.its claim constructiona ruling on October 18, 2017. Nothat Seagate’s antitrust claims can proceed as to suspension assemblies that enter the United States but not as to suspension assembles that do not enter the United States. On July 28, 2023, the judge initiated a reconsideration of this ruling and requested further briefing. A trial date has not been set.viewre Seagate Technology Holdings plc Securities Litigation. A putative class action lawsuit alleging violations of the uncertainty regardingfederal securities laws, UA Local 38 Defined Contribution Pension Plan, et al. v. Seagate Technology Holdings PLC, et al., was filed on July 10, 2023, in the amountU.S. District Court for the Northern District of damages, if any, that could be awarded in this matter, the Company does not believeCalifornia against Seagate Technology Holdings plc, Dr. William D. Mosley, and Gianluca Romano. The complaint alleges that it is currently possible to determine a reasonable estimatesecurities class action on behalf of all purchasers of Seagate common stock between September 15, 2020 and October 25, 2022, inclusive, and asserts claims under Sections 10(b) and 20(a) of the possible rangeSecurities Exchange Act of loss related1934 and Rule 10b5-1. The complaint seeks unspecified monetary damages and other relief. A second action, Public Employees’ Retirement System of Mississippi v. Seagate Technology Holdings plc, William David Mosley, and Gianluca Romano, was filed on July 26, 2023, asserting similar claims. The cases were consolidated on September 25, 2023. An amended complaint was filed on October 19, 2023. The Company believes that the asserted claims are without merit and intends to this matter.European UnionEU REACH Directive (Registration, Evaluation, Authorization, and Restriction of Chemicals, EC 1907/2006) also restricts substances of very high concern (“SVHCs”) in products. If the Company or its suppliers failsfail 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.Themayexpects to 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.Investmentacquire preferred equity securities.Ontotal $184 million, $223 million, $1.5 billion and $739 million for fiscal years 2025, 2026, 2027, and 2028, respectively.28, 2017,29, 2023, the Company entered into an Equity Commitment Letter (“ECL”)recorded order cancellation fees of $118 million to terminate certain purchase commitments related to the purchase of inventory components and equipment, which were reflected under Cost of revenue on its Condensed Consolidated Statements of Operations. As of September 29, 2023, cumulative unpaid order cancellation fees on the Condensed Consolidated Balance Sheet were $151 million, with a consortium$133 million in Accrued expenses and $18 million in Accounts payable, all of investors led by Bain Capital Private Equity for the acquisition of Toshiba Memory Corporation (“TMC”). The ECL contemplates that, upon the closing of the acquisition, the Company orwhich is expected to be paid within one of its subsidiaries would purchase up to JPY 139.5 billion (approximately USD 1.24 billion based on an exchange rate as of December 29, 2017), of a newly issuednon-convertible preferred equity security of a newly formed company, K. K. Pangea, for the purpose of acquiring TMC. The closing of the acquisition is subject to regulatory approvals and other closing conditions.January 29, 2018,October 26, 2023, the Company’s Board of Directors announceddeclared a quarterly cash dividend of $0.63$0.70 per share, which will be payable on April 4, 2018January 9, 2024 to shareholders of record as of the close of business on MarchDecember 21, 2018.ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Some of the statements and assumptions included in this
except as required by law.
Our Company
We are a leading provider of data storage technology and solutions. Our principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, we produce a broad range of data storage products including solid state drives (“SSD”) and their related controllers, solid state hybrid drives (“SSHD”) and storage subsystems.
Hard disk drives are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. Disk drives continue to be the primary medium of mass data storage due to their performance attributes, high quality and cost effectiveness. Complementing existing data center storage architecture, solid-state storage devices use integrated circuit assemblies as memory to store data with most SSDs using NAND-based flash memory. In addition to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a large hard disk drive and an SSD cache to improve performance of frequently accessed data.
Our products are designed for mission critical and nearline applications in enterprise servers and storage systems; edge compute / client compute applications, where our products are designed primarily for desktop and mobile computing; and edgenon-compute /client non-compute applications, where our products are designed for a wide variety of end user devices such as portable external storage systems, surveillance systems, network-attached storage (“NAS”), digital video recorders (“DVRs”) and gaming consoles.
Our cloud systems and solutions extend innovation from the device into the information infrastructure, onsite and in the cloud. Our portfolio includes modular original equipment manufacturer (“OEM”) storage systemsand scale-out storage servers.
September 2023 quarter.
Highlights of events in the September 2023 quarter that impacted our financial position.the uncertainties and business risks, see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
(Dollars in millions) | December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Revenue | $ | 2,914 | $ | 2,632 | $ | 2,894 | $ | 5,546 | $ | 5,691 | ||||||||||
Cost of revenue | 2,037 | 1,896 | 2,003 | 3,933 | 3,999 | |||||||||||||||
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Gross margin | 877 | 736 | 891 | 1,613 | 1,692 | |||||||||||||||
Product development | 250 | 263 | 305 | 513 | 620 | |||||||||||||||
Marketing and administrative | 142 | 145 | 155 | 287 | 308 | |||||||||||||||
Amortization of intangibles | 19 | 22 | 28 | 41 | 57 | |||||||||||||||
Restructuring and other, net | 33 | 51 | 33 | 84 | 115 | |||||||||||||||
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Income from operations | 433 | 255 | 370 | 688 | 592 | |||||||||||||||
Other expense, net | (62 | ) | (67 | ) | (60 | ) | (129 | ) | (109 | ) | ||||||||||
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Income before income taxes | 371 | 188 | 310 | 559 | 483 | |||||||||||||||
Provision for income taxes | 212 | 7 | 13 | 219 | 19 | |||||||||||||||
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Net income | $ | 159 | $ | 181 | $ | 297 | $ | 340 | $ | 464 | ||||||||||
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| December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Revenue | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Cost of revenue | 70 | 72 | 69 | 71 | 70 | |||||||||||||||
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Gross margin | 30 | 28 | 31 | 29 | 30 | |||||||||||||||
Product development | 9 | 10 | 11 | 9 | 11 | |||||||||||||||
Marketing and administrative | 5 | 5 | 5 | 5 | 6 | |||||||||||||||
Amortization of intangibles | — | 1 | 1 | 1 | 1 | |||||||||||||||
Restructuring and other, net | 1 | 2 | 1 | 2 | 2 | |||||||||||||||
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Income from operations | 15 | 10 | 13 | 12 | 10 | |||||||||||||||
Other expense, net | (3 | ) | (3 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||||
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Income before income taxes | 12 | 7 | 11 | 10 | 8 | |||||||||||||||
Provision for income taxes | 7 | — | 1 | 4 | — | |||||||||||||||
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Net income | 5 | % | 7 | % | 10 | % | 6 | % | 8 | % | ||||||||||
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| (Dollars in millions) | September 29, 2023 | June 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||
| Revenue | $ | 1,454 | $ | 1,602 | $ | 2,035 | ||||||||||||||||||||||||||
| Cost of revenue | 1,305 | 1,298 | 1,553 | |||||||||||||||||||||||||||||
| Gross profit | 149 | 304 | 482 | |||||||||||||||||||||||||||||
| Product development | 171 | 172 | 234 | |||||||||||||||||||||||||||||
| Marketing and administrative | 105 | 114 | 129 | |||||||||||||||||||||||||||||
| Amortization of intangibles | — | — | 3 | |||||||||||||||||||||||||||||
| Restructuring and other, net | 2 | (8) | 9 | |||||||||||||||||||||||||||||
| (Loss) income from operations | (129) | 26 | 107 | |||||||||||||||||||||||||||||
| Other expense, net | (18) | (111) | (80) | |||||||||||||||||||||||||||||
| (Loss) income before income taxes | (147) | (85) | 27 | |||||||||||||||||||||||||||||
| Provision for (Benefit from) income taxes | 37 | 7 | (2) | |||||||||||||||||||||||||||||
| Net (loss) income | $ | (184) | $ | (92) | $ | 29 | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| September 29, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||
| Cost of revenue | 90 | 81 | 76 | |||||||||||||||||||||||||||||
| Gross margin | 10 | 19 | 24 | |||||||||||||||||||||||||||||
| Product development | 12 | 11 | 12 | |||||||||||||||||||||||||||||
| Marketing and administrative | 7 | 7 | 7 | |||||||||||||||||||||||||||||
| Amortization of intangibles | — | — | — | |||||||||||||||||||||||||||||
| Restructuring and other, net | — | — | — | |||||||||||||||||||||||||||||
| Operating margin | (9) | 1 | 5 | |||||||||||||||||||||||||||||
| Other expense, net | (1) | (7) | (4) | |||||||||||||||||||||||||||||
| (Loss) income before income taxes | (10) | (6) | 1 | |||||||||||||||||||||||||||||
| Provision for income taxes | 3 | — | — | |||||||||||||||||||||||||||||
| Net (loss) income | (13) | % | (6) | % | 1 | % | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| September 29, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||
| Revenues by Channel (%) | ||||||||||||||||||||||||||||||||
| OEMs | 71 | % | 74 | % | 76 | % | ||||||||||||||||||||||||||
| Distributors | 18 | % | 14 | % | 15 | % | ||||||||||||||||||||||||||
| Retailers | 11 | % | 12 | % | 9 | % | ||||||||||||||||||||||||||
Revenues by Geography (%) (1) | ||||||||||||||||||||||||||||||||
| Asia Pacific | 56 | % | 59 | % | 39 | % | ||||||||||||||||||||||||||
| Americas | 31 | % | 29 | % | 46 | % | ||||||||||||||||||||||||||
| EMEA | 13 | % | 12 | % | 15 | % | ||||||||||||||||||||||||||
| Revenues by Market (%) | ||||||||||||||||||||||||||||||||
| Mass capacity | 70 | % | 61 | % | 68 | % | ||||||||||||||||||||||||||
| Legacy | 19 | % | 25 | % | 19 | % | ||||||||||||||||||||||||||
| Other | 11 | % | 14 | % | 13 | % | ||||||||||||||||||||||||||
| HDD Exabytes Shipped by Market | ||||||||||||||||||||||||||||||||
| Mass capacity | 79 | 75 | 104 | |||||||||||||||||||||||||||||
| Legacy | 11 | 16 | 14 | |||||||||||||||||||||||||||||
| Total | 90 | 91 | 118 | |||||||||||||||||||||||||||||
| HDD Price per Terabyte | $ | 14 | $ | 15 | $ | 15 | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
ASPs (per unit) | $ | 68 | $ | 64 | $ | 67 | $ | 66 | $ | 67 | ||||||||||
Exabytes Shipped | 88 | 70 | 68 | 158 | 135 | |||||||||||||||
Revenues by Channel (%) | ||||||||||||||||||||
OEMs | 67 | % | 67 | % | 66 | % | 67 | % | 68 | % | ||||||||||
Distributors | 17 | % | 17 | % | 18 | % | 17 | % | 18 | % | ||||||||||
Retailers | 16 | % | 16 | % | 16 | % | 16 | % | 14 | % | ||||||||||
Revenues by Geography (%) | ||||||||||||||||||||
Americas | 26 | % | 26 | % | 30 | % | 26 | % | 32 | % | ||||||||||
EMEA | 19 | % | 18 | % | 19 | % | 18 | % | 17 | % | ||||||||||
Asia Pacific | 55 | % | 56 | % | 51 | % | 56 | % | 51 | % | ||||||||||
Comparedcompared to the December 2016June 2023 quarter, revenue in the December 2017 quarter increased modestly primarily due to increaselower market demand in exabytes shipped, offsetlegacy markets and our non-HDD products that were impacted by price erosion.
Revenue for the six months ended December 2017 quarter decreased by $145 million from the six months ended December 2016 quarter as a result of price erosion,macroeconomic conditions, partially offset by an improved product mix.
increase in mass capacity exabytes shipped.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
(Dollars in millions) | December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Cost of revenue | $ | 2,037 | $ | 1,896 | $ | 2,003 | $ | 3,933 | $ | 3,999 | ||||||||||
Gross margin | 877 | 736 | 891 | 1,613 | 1,692 | |||||||||||||||
Gross margin percentage | 30 | % | 28 | % | 31 | % | 29 | % | 30 | % | ||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | September 29, 2023 | June 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||
| Cost of revenue | $ | 1,305 | $ | 1,298 | $ | 1,553 | ||||||||||||||||||||||||||
| Gross profit | 149 | 304 | 482 | |||||||||||||||||||||||||||||
| Gross margin | 10 | % | 19 | % | 24 | % | ||||||||||||||||||||||||||
Compareda decrease of $9 million in depreciation expense as a result of change in useful lives of certain capital equipment.
mix.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
(Dollars in millions) | December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Product development | $ | 250 | $ | 263 | $ | 305 | $ | 513 | $ | 620 | ||||||||||
Marketing and administrative | 142 | 145 | 155 | 287 | 308 | |||||||||||||||
Amortization of intangibles | 19 | 22 | 28 | 41 | 57 | |||||||||||||||
Restructuring and other, net | 33 | 51 | 33 | 84 | 115 | |||||||||||||||
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Operating expenses | $ | 444 | $ | 481 | $ | 521 | $ | 925 | $ | 1,100 | ||||||||||
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| (Dollars in millions) | September 29, 2023 | June 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||
| Product development | $ | 171 | $ | 172 | $ | 234 | ||||||||||||||||||||||||||
| Marketing and administrative | 105 | 114 | 129 | |||||||||||||||||||||||||||||
| Amortization of intangibles | — | — | 3 | |||||||||||||||||||||||||||||
| Restructuring and other, net | 2 | (8) | 9 | |||||||||||||||||||||||||||||
| Operating expenses | $ | 278 | $ | 278 | $ | 375 | ||||||||||||||||||||||||||
Comparedlease expense and a $3 million increase in supply costs.
Compared to corresponding six months ended December 2016 quarter, product development expense decreased by $107 million primarily due to a $47 million decrease in salaries and employee benefits as a result of the restructuring of our workforce in prior periods, a $36 million decrease due to related operational efficiencies and a $24 million decrease in variable compensation and share-based compensation expenses.
Marketing and administrative expense. Marketing and administrative expense for the December 2017 quarter decreased by $3 million from the September 20172022 quarter, primarily due to a $38 million decrease in salariescompensation and relatedother employee benefits from the reduction in headcount as a result of theour restructuring of our workforceplans and temporary salary reduction, and a $27 million decrease in prior periods,depreciation expense, partially offset by ana $6 million increase in variable compensationlease expense.
Compared to the December 2016 quarter,
Compared to corresponding six months ended December 2016 quarter, marketing and administrative expense decreased by $21 million primarilytravel expenses due to a $13 million decrease in salariescost saving measures.
Amortization of intangibles. Amortization of intangibles for the three and six months ended December 2017 quarter decreased by $3 million, $9 million and $16 million respectively, from the three months ended September 2017 quarter and the three and six months ended December 2016 quarter due to certain intangible assets reaching the end of their useful life.
other, net.
Restructuring and other, netplan.
workforce.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
(Dollars in millions) | December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Other expense, net | $ | (62 | ) | $ | (67 | ) | $ | (60 | ) | $ | (129 | ) | $ | (109 | ) | |||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | September 29, 2023 | June 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||
| Other Expense, net | $ | (18) | $ | (111) | $ | (80) | ||||||||||||||||||||||||||
Compared to December 2016 quarter,
Other expense, net
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | September 29, 2023 | June 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||||||
| Provision for (benefit from) income taxes | $ | 37 | $ | 33 | $ | (2) | ||||||||||||||||||||||||||
Income Taxes
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
(Dollars in millions) | December 29, 2017 | September 29, 2017 | December 30, 2016 | December 29, 2017 | December 30, 2016 | |||||||||||||||
Provision for income taxes | $ | 212 | $ | 7 | $ | 13 | $ | 219 | $ | 19 | ||||||||||
next twelve months beginning September 30, 2023.
related to share-based compensation expense.
During the six months ended December 2017 quarter, our unrecognized tax benefits excluding interest and penalties increased by approximately $1 million to $75 million. The unrecognized tax benefits that, if recognized, would impact the effective tax rate were $75 million at December 29, 2017, subject to certain future changesincrease in valuation allowance. During the twelve months beginning December 30, 2017, we expect that our unrecognized tax benefits could be reduced by approximately $2 million, primarily as a result of the expiration of certain statutes of limitation.
Our income tax provision recorded for the six months ended December 2016 quarter included approximately $4 million of net discrete tax benefits, primarily associated with the release of tax reserves associated with the expiration of certain statutes of limitation.
Our income tax provision recorded for the three and six months ended December 2016 quarter differed from the provision from 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 (i) tax benefits related tonon-U.S. earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) a decrease in valuation allowance for certain deferred tax assets.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law in the United States. The Act significantly revises U.S. corporate income tax law by, among other things, lowering corporate income tax rates from 35% to 21%, implementing a territorial tax system and imposing a tax on deemed repatriated earnings ofnon-U.S. subsidiaries. The Act’s new international rules, including the Global IntangibleLow-Taxed Income, the Foreign Derived Intangible Income and the Base Erosion Anti-Avoidance Tax, are not expected to have a material impact on our financial statements. However, these assessments are based on preliminary review and analysis of the Act and are subject to change as we continue to evaluate these highly complex rules as additional interpretive guidance is issued.
Pursuant to SEC Staff Accounting Bulletin (SAB) 118 (regarding the application of ASC 740 associated with the enactment of the Act), we recorded a provisional tax expense of approximately $208 million for the three months ended December 29, 2017 tore-measure our U.S. deferred tax assets at the newly enacted 21% tax rate. The tax expense is provisional because we continue to evaluate the impact of various domestic and international provisions of the Act as well as the impact of additional guidance that may be provided. This provisional tax expense increased our effective tax rate for the three months ended December 29, 2017 to approximately 56%. Many of the other U.S. tax changes are not expected to impact our tax expense in the short-term due to our large net operating loss and tax credit carryovers.
from the values reported as of September 29, 2023. For additional information on risks and factors that could impact our ability to fund our operations and meet our cash requirements, see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.
(Dollars in millions) | December 29, 2017 | June 30, 2017 | Change | |||||||||
Cash and cash equivalents | $ | 2,556 | $ | 2,539 | $ | 17 | ||||||
| (Dollars in millions) | September 29, 2023 | June 30, 2023 | Change | |||||||||||||||||
| Cash and cash equivalents | $ | 795 | $ | 786 | $ | 9 | ||||||||||||||
$70 million.
improvements.forin investing activities for the sixthree months ended DecemberSeptember 29, 20172023 was $210$70 million, which was primarily attributableattributable to the payments for the purchase of property, equipment and leasehold improvements of $201 million.Cashactivitiesactivities of $865$49 million for the sixthree months ended DecemberSeptember 29, 20172023 was primarily attributable to the following activities:3661.3 billion redemption of term loans;payments;payments;
For additional information on risks and factors that could impact our ability to fund our operations and meet our cash requirements, including the pandemic, among others, see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q. September 29, 2023, future interest payments on this outstanding debt are estimated to be approximately $2.3 billion, of which $325 million is expected to be paid within one year. 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. 2023. (Dollars in millions) Contractual Cash Obligations: Long-term debt Interest payments on debt Purchase obligations(2) Operating leases(1) Capital expenditures Other funding requirements(3) Subtotal Commitments: Letters of credit or bank guarantees Total may selectively pursue strategic alliances, acquisitions, joint ventures and investments, which may require additional capital. 2023. (Dollars in millions, except percentages) Assets Cash equivalents: Fixed rate Average interest rate Total fixed income Average interest rate Debt Fixed rate Average interest rate 2023. 2023 counterparties, and may increase the cost of such capital. our business. In addition, intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, which may cause actual results to differ materially from our expectations. Some of the actions that we face from time-to-time seek injunctions against the sale of our products and/or substantial monetary damages, which, if granted or awarded, could materially harm our business, financial condition and operating results our Constitution. The timing of purchases will depend upon prevailing market conditions, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time. (In millions, except average price paid per share) September 30, 2017 through October 27, 2017 October 28, 2017 through November 24, 2017 November 25, 2017 through December 29, 2017 Total SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY Executive Vice President Cash Requirements and CommitmentsDecemberSeptember 29, 2017 consisted2023 consist of: (1) approximately $2.6 billionapproximately $795 million in cash and cash equivalents, (2) cash we expect to generate from operations and (3) a $700 million senior revolving credit facility.As of December 29, 2017, no borrowings had been drawn$1.5 billion available for borrowing under the revolving credit facility or had beenof the Tenth Amendment (the “Revolving Credit Facility”).this credit facility.the Revolving Credit Facility. The line of creditRevolving Credit Facility is available for borrowings, subject to compliance with financial covenants and other customary conditions to borrowing.The credit agreement that governs revolving credit facility, as amended, includes three financial covenants: (1) minimum cash, cash equivalentsinterest coverage ratio and marketable securities; (2) a fixed charge coverage ratio; and (3) atotal net leverage ratio. On April 28, 2016, the Revolving Credit Agreement was amended in order to increase the allowable net leverage ratio to adjust for our current financial liquidity position. The term of the revolving credit facilityCompany is through January 15, 2020 provided that if we do not have Investment Grade Ratings (as defined in the revolving credit facility) on August 15, 2018, then the maturity date will be August 16, 2018 unless certain extension conditions have been satisfied. We were in compliance with the modified covenants as of DecemberSeptember 29, 20172023. We continue to evaluate our debt portfolio and expectstructure to comply with our financial debt covenants.in compliancesufficient to fund our operations and meet our cash requirements for at least 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. Our ability to fund theseliquidity requirements beyond 12 months 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.2018,ended June 30, 2023, except for the purchase obligations and long-term debt obligations.capital expenditures$1.1 billion of these short-term commitments to be lesspaid within one year and expect $2.6 billion of these long-term commitments to be paid thereafter.5%one year. As of revenue.Dividends declared in Refer to “Item 1. Financial Statements—December 2017 quarter ended March 31, 2023, related to BIS’ allegations of $179 millionviolations of the U.S. EAR, which were subsequently resolved by the Settlement Agreement in April 2023. As part of the Settlement Agreement with BIS, quarterly payments of $15 million will be made over the course of five years beginning October 31, 2023, of which $60 million is expected to be paid on January 3, 2018. The Company’swithin one year and $240 million thereafter. Refer to “Item 1. Financial Statements—Note 12. Legal, Environmental and Other Contingencies” for more details.announceddeclared dividends of $0.70 per share, totaling $146 million, which was paid on October 10, 2023. On October 26, 2023, our Board of Directors declared a quarterly cash dividend of $0.63$0.70 per share, payable on January 29, 2018, which is payable on April 4, 20189, 2024 to shareholders of record at the close of business on MarchDecember 21, 2018.purchases.purchases, tender offers, or other means, including through the use of derivative transactions. As of DecemberSeptember 29, 2017, $0.92023, $1.9 billion remainedremained available for repurchase under our existing repurchase authorization limit. We may limit or terminate the repurchase program at any time. All repurchases are effected as redemptions in accordance with the Company’s Articles of Association.Contractual Obligations and CommitmentsOur contractual cash obligations and commitments as of December 29, 2017, have been summarized in the table below: Fiscal Year(s) Total Remainder of
2018 2019-2020 2021-2022 Thereafter $ 4,923 $ — $ 560 $ 750 $ 3,613 1,720 115 430 420 755 764 764 — — — 122 9 25 13 75 127 116 10 1 — 24 12 12 — — 7,680 1,016 1,037 1,184 4,443 107 15 91 1 — $ 7,787 $ 1,031 $ 1,128 $ 1,185 $ 4,443 (1)Includes total future minimum rent expense undernon-cancelable leases for both occupied and vacated facilities (rent expense is shown net of sublease income).(2)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.(3)Consists of funding requirements related to strategic commitments.On September 28, 2017,our Constitution.entered into an Equity Commitment Letter (“ECL”) with a consortium of investors led by Bain Capital Private Equity for the acquisition of Toshiba Memory Corporation (“TMC”). The ECL contemplates that, upon the closing of the acquisition, we would purchase up to JPY 139.5 billion (approximately USD 1.24 billion based on an exchange rate as of December 29, 2017), of a newlyissued non-convertible preferred equity security of a newly formed company, K. K. Pangea, for the purpose of acquiring TMC. The closing of the acquisition is subject to regulatory approvals and other closing conditions.As of December 29, 2017, we had a liability for unrecognized tax benefits and an accrual for the payment of related interest totaling $11 million, none of which is expectedexpect capital expenditures to be settled within one year. Outsidelower than fiscal year 2023. We require substantial amounts of one year,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 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 or otherwise. In addition, we are unable to make a reasonably reliable estimate of when cash settlement with a taxing authority will occur.Since our fiscal year ended June 30, 2017,“Management’s“Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our Annual Report onForm 10-K for the fiscal year ended June 30, 2017,2023, as filed with the SEC on August 4, 2017,2023, for a discussion of our critical accounting policies and estimates.Policies”Policies” for information regarding the effect of new accounting pronouncements on our financial statements.ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKDecemberSeptember 29, 2017,2023, we hadno available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The CompanyWe determinedno impairment related to credit losses for available-for-sale debt securities were other-than-temporarily impaired as of DecemberSeptember 29, 2017. We currently do not use derivative financial instruments in our investment portfolio.fixed-ratefixed rate debt obligations. Weobligations, which we enter into these debt obligations to supportfor general corporate purposes including capital expenditures and working capital needs.DecemberSeptember 29, 2017. Fiscal Years Ended 2018 2019 2020 2021 2022 Thereafter Total Fair Value at
December 29, 2017 $ 1,064 $ — $ — $ — $ — $ — $ 1,064 $ 1,064 1.49 % 1.49 % $ 1,064 $ — $ — $ — $ — $ — $ 1,064 $ 1,064 1.49 % 1.49 % $ — $ 560 $ — $ — $ 750 $ 3,613 $ 4,923 $ 4,903 3.75 % 4.25 % 4.93 % 4.69 % Fiscal Years Ended Total Fair Value at September 29, 2023 (Dollars in millions, except
percentages)2024 2025 2026 2027 2028 Thereafter Assets Money market funds, time deposits and certificates of deposit Floating rate $ 122 $ — $ — $ — $ — $ — $ 122 $ 122 Average interest rate 5.39 % 5.39 % Other debt securities Fixed rate $ — $ — $ — $ 15 $ — $ — $ 15 $ 15 Debt Fixed rate $ — $ 479 $ — $ 505 $ 1,500 $ 3,245 $ 5,729 $ 5,564 Average interest rate — % 4.75 % — % 4.88 % 3.50 % 6.88 % 5.64 % At this time, we have not identified any material exposure associated with the changes as a result of the British vote to exit the European Union.changeschange in fair value of these hedges arecontracts is recognized in earnings in the same period as the gains and losses from the remeasurement of the assets and liabilities. TheseAll foreign currency forward exchange contracts are not designated as hedging instruments under ASC 815,Derivativesmature within 12 months.Hedging.We had no outstanding foreign currency forward exchange contracts asa net gain of December 29, 2017.We evaluate hedging effectiveness prospectively and retrospectively and record any ineffective portion of the hedging instruments$104 million in Cost of revenue, onInterest expense and Net gain recognized from termination of interest rate swap, respectively, related to the Condensed Consolidated Statements of Operations. We did not have any material net gains (losses) recognized in Cost of revenue for cash flow hedges due to hedge ineffectiveness orde-designation on discontinued cash flow hedges during the three and six months ended December2017.(Dollars in millions, except weighted-average contract rate) Notional Amount Weighted-Average Contract Rate Foreign currency forward exchange contracts: Singapore Dollar $ 308 $ 1.34 $ (5) Thai Baht 131 $ 33.90 (10) Chinese Renminbi 66 $ 6.89 (2) British Pound Sterling 63 $ 0.80 (1) Total $ 568 $ (18) transaction costs andability to raise capital, our ability to execute transactions with various counterparties.Seagate Deferred Compensation Plan (the “SDCP”). non-qualified deferred compensation plan—the SDCP.Total Return Swap (“TRS”)TRS agreement in order to manage the equity market risks associated with the SDCP liabilities. We pay a floating rate, based on LIBORSOFR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP liabilityliabilities due to changes in the value of the investment options made by employees. See “Part I, Item 1. Financial Statements—Note 8.6. Derivative Financial Instruments”Instruments” of this Quarterly Report onForm 10-Q.ITEM 4.CONTROLS AND PROCEDURESAn was performed 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 were(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective as of DecemberSeptember 29, 2017. 2023. DecemberSeptember 29, 2017,2023, 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.14.12. Legal, Environmental and Other Contingencies”Contingencies” of this Quarterly Report onForm 10-Q.ITEM 1A. RISK FACTORSThereno materialadversely affected by reduced, delayed, loss of or canceled purchases by, one or more of our key customers, including large hyperscale data center companies and CSPs.the descriptionor violation of the risk factors associated withthese laws could have a material adverse effect on our business, previously disclosedresults of operations, financial condition and cash flows.Part I, Item 1A, “Risk Factors” inU.S. trade policy, including the imposition of sanctions or tariffs and the resulting consequences, may have a material adverse impact on our Annual Report onForm 10-K for the year ended June 30, 2017. In additionbusiness and results of operations.the other information set forth in this report, you should carefully consider the risk factors discussed inIntellectual Property and Other Proprietary RightsAnnual Report onForm 10-K as theyintellectual property rights, which could materiallyadversely affect our business, financial condition and results of operations.The Risk Factorsonly risks facing us. Additional risksreliability of our products may make it more difficult for us to effectively compete with our competitors.uncertaintiesmore advanced technologies in the volumes and timeframes that are required to meet customer demand. We are transitioning to key areal density recording technologies that use HAMR technology to increase HDD capacities. If our transitions to more advanced technologies, including the transition to HDDs utilizing HAMR technology, require development and production cycles that are longer than anticipated or if we otherwise fail to implement new HDD technologies successfully, we may lose sales and market share, which could significantly harm our financial results.currently knownsuccessful, our future results of operations may be adversely affected.currently deemare prohibited from selling to, could be difficult to replace. In line with industry practice, new key customers usually require that we pass a lengthy and rigorous qualification process. Accordingly, it may be difficult or costly for us to attract new key customers. Additionally, our customers’ demand for our products may fluctuate due to factors beyond our control. If any of our key customers unexpectedly reduce, delay or cancel orders, our revenues and results of operations may be materially adversely affected.immaterial alsoadversely affected by:results.ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSthe Company’s Articles of Association.On April 22, 2015, the Board of Directors authorized the Company to repurchase $2.5 billion of its outstanding ordinary shares.DecemberSeptember 29, 2017, $0.92023, $1.9 billion remained available for repurchaserepurchases under the existing repurchase authorization limit.authorization. There is no expiration date on this authorization.DecemberSeptember 29, 2017,2023, including statutory tax withholdings related to vesting of employee equity awards: Total
Number of
Shares
Repurchased Average
Price
Paid
per
Share 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 — $ 34.02 — $ 1,084 — 39.59 — 1,084 5.0 39.21 5.0 888 5.0 $ 39.17 5.0 $ 888 ITEM 3.DEFAULTS UPON SENIOR SECURITIESNone.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.ITEM 5.OTHER INFORMATIONNot applicableITEM 6.EXHIBITSSee Exhibit Index on the page to this Quarterly Report for a list of exhibits to this Quarterly Report, which Exhibit Index is incorporated herein by reference.EXHIBIT INDEXExhibitPeriodDescriptionTotal Number of ExhibitShares Repurchased as Part of Publicly Announced Plans or Programs 3.1Constitution of Seagate Technology Public Limited Company, as amended and restated by Special Resolution dated October 19, 2016, filed as Exhibit 3.1 to the Company’s current report on Form8-K filed on October 24, 2016 and incorporated herein by reference. 3.2July 1, 2023 through July 28, 2023Certificate of Incorporation of the Company, filed as Exhibit 3.2 to the Company’s annual report on Form10-K filed on August 20, 2010 and incorporated herein by reference.— — — $ 1,921 July 29, 2023 through August 25, 2023 — — — 1,921 August 26, 2023 through September 29, 2023 — — — 1,897 Total — — Incorporated by Reference Exhibit No. Description of Exhibit Form File No. Exhibit Filing Date Filed Herewith 3.1 10-K 001-31560 3.1 8/6/2021 3.2 S-8 001-31560 4.1 10/20/2021 4.1 8-K 001-31560 4.1 9/13/2023 4.2 8-K 001-31560 4.2 9/13/2023 10.1 8-K 001-31560 10.1 9/8/2023 10.2 8-K 001-31560 10.2 9/8/2023 10.3 X 31.1 X 31.2 X 32.1† X 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. +Filed herewith.†101.DEFThe certifications attached as Exhibit 32.1 that accompany thisForm 10-Q are not deemed filed with the SecuritiesInline XBRL Taxonomy Extension Definition Linkbase. 104 Inline XBRL Cover page and Exchange Commission and are not to be incorporated by reference into any filing of Seagate Technology 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 thisForm 10-Q, irrespective of any general incorporation language contained in such filing.Exhibit 101.*Management contract or compensatory plan or arrangement.DATE: October 27, 2023 BY: /s/ Gianluca Romano Gianluca Romano DATE: January 29, 2018 BY:/s/ WILLIAM D. MOSLEYWilliam D. MosleyChief Executive Officer and Director(Principal Executive Officer)SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANYDATE: January 29, 2018 BY:/s/ DAVID H. MORTON, JR.David H. Morton, Jr. Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)40