Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 27, 2013 | Oct. 23, 2013 | |
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 27-Sep-13 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | WDC | |
Entity Registrant Name | WESTERN DIGITAL CORP | |
Entity Central Index Key | 106040 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 236,317,992 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $4,869 | $4,309 |
Accounts receivable, net | 1,791 | 1,793 |
Inventories | 1,244 | 1,188 |
Other current assets | 357 | 308 |
Total current assets | 8,261 | 7,598 |
Property, plant and equipment, net | 3,638 | 3,700 |
Goodwill | 2,051 | 1,954 |
Other intangible assets, net | 616 | 605 |
Other non-current assets | 240 | 179 |
Total assets | 14,806 | 14,036 |
Current liabilities: | ||
Accounts payable | 2,061 | 1,990 |
Arbitration Award Reserve | 719 | 706 |
Accrued expenses | 406 | 480 |
Employee-related Liabilities, Current | 388 | 453 |
Accrued warranty | 123 | 114 |
Short-term Debt | 500 | 0 |
Current portion of long-term debt | 230 | 230 |
Total current liabilities | 4,427 | 3,973 |
Long-term debt | 1,668 | 1,725 |
Other liabilities | 458 | 445 |
Total liabilities | 6,553 | 6,143 |
Commitments and contingencies (Notes 4 and 5) | ||
Shareholders' equity: | ||
Preferred stock, $.01 par value; authorized - 5 shares; issued and outstanding - none | 0 | 0 |
Common stock, $.01 par value; authorized - 450 shares; issued - 261 shares; outstanding - 236 and 237 shares, respectively | 3 | 3 |
Additional paid-in capital | 2,205 | 2,188 |
Accumulated other comprehensive income (loss) | -19 | -35 |
Retained earnings | 7,183 | 6,749 |
Treasury stock - common shares at cost; 25 shares and 24 shares, respectively | -1,119 | -1,012 |
Total shareholders' equity | 8,253 | 7,893 |
Total liabilities and shareholders' equity | $14,806 | $14,036 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 27, 2013 | Jun. 28, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, authorized | 450,000,000 | 450,000,000 |
Common stock, issued | 261,000,000 | 261,000,000 |
Common stock, outstanding | 236,000,000 | 237,000,000 |
Treasury stock, shares | 25,000,000 | 24,000,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Income Statement [Abstract] | ||
Revenue, net | $3,804 | $4,035 |
Cost of revenue | 2,716 | 2,842 |
Gross margin | 1,088 | 1,193 |
Operating expenses: | ||
Research and development | 401 | 396 |
Selling, general and administrative | 132 | 179 |
Arbitration Award Provision | 13 | 0 |
Employee termination benefits and other charges | 0 | 26 |
Total operating expenses | 546 | 601 |
Operating income | 542 | 592 |
Other income (expense): | ||
Interest income | 3 | 2 |
Interest and other expense | -13 | -16 |
Total other expense, net | -10 | -14 |
Income before income taxes | 532 | 578 |
Income tax provision | 37 | 59 |
Net income | $495 | $519 |
Income per common share: | ||
Basic | $2.10 | $2.11 |
Diluted | $2.05 | $2.06 |
Weighted average shares outstanding: | ||
Basic | 236 | 246 |
Diluted | 242 | 252 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Statement of Other Comprehensive Income [Abstract] | ||
Net income | $495 | $519 |
Other comprehensive income (loss), net of tax: | ||
Net unrealized gains on cash flow hedges | 16 | 28 |
Change in net actuarial gains | 0 | 1 |
Other comprehensive income | 16 | 29 |
Total comprehensive income | $511 | $548 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Cash flows from operating activities | ||
Net income | $495 | $519 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 312 | 313 |
Stock-based compensation | 42 | 39 |
Deferred income taxes | -10 | -12 |
Gain On Insurance Recovery | -65 | 0 |
Changes in: | ||
Accounts receivable, net | 25 | 413 |
Inventories | -21 | -94 |
Accounts payable | 29 | -67 |
Increase Decrease In Arbitration Award Reserve | 13 | 0 |
Accrued expenses | -52 | -72 |
Increase (Decrease) in Employee Related Liabilities | -65 | -41 |
Other assets and liabilities | -23 | -62 |
Net cash provided by operating activities | 680 | 936 |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | -136 | -382 |
Acquisitions, net | -263 | -9 |
Payments for (Proceeds from) Other Investing Activities | 39 | 0 |
Net cash used in investing activities | -360 | -391 |
Cash flows from financing activities | ||
Issuance of stock under employee stock plans | 22 | 35 |
Taxes paid on vested stock awards under employee stock plans | -22 | -7 |
Excess tax benefits from employee stock plans | 7 | 32 |
Repurchases of common stock | -150 | -218 |
Dividends to shareholders | -59 | 0 |
Proceeds from (Repayments of) Short-term Debt | 500 | 0 |
Repayment of debt | -58 | -58 |
Net cash provided by (used in) financing activities | 240 | -216 |
Net increase (decrease) in cash and cash equivalents | 560 | 329 |
Cash and cash equivalents, beginning of period | 4,309 | 3,208 |
Cash and cash equivalents, end of period | 4,869 | 3,537 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 63 | 37 |
Cash paid for interest | 11 | 13 |
Supplemental disclosure of non-cash financing activities: | ||
Accrual of cash dividend declared | $59 | $61 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Sep. 27, 2013 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation |
The accounting policies followed by Western Digital Corporation (the “Company”) are set forth in Part II, Item 8, Note 1 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended June 28, 2013. In the opinion of management, all adjustments necessary to fairly state the unaudited condensed consolidated financial statements have been made. All such adjustments are of a normal, recurring nature. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 28, 2013. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. | |
On July 10, 2013, the Company acquired VeloBit, Inc. ("VeloBit") and on September 12, 2013, the Company completed its acquisition of sTec, Inc. (“sTec”). These acquisitions are further described in Note 11 below. In connection with the acquisitions, VeloBit and sTec became indirect wholly-owned subsidiaries of the Company. VeloBit and sTec’s results of operations since the dates of acquisition are included in the condensed consolidated financial statements. | |
Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented. However, actual results could differ materially from these estimates. |
Supplemental_Financial_Stateme
Supplemental Financial Statement Data | 3 Months Ended | |||||||||||||||
Sep. 27, 2013 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Supplemental Financial Statement Data | 2. Supplemental Financial Statement Data | |||||||||||||||
Inventories; Property, Plant and Equipment; and Other Intangible Assets | ||||||||||||||||
September 27, | June 28, | |||||||||||||||
2013 | 2013 | |||||||||||||||
(in millions) | ||||||||||||||||
Inventories: | ||||||||||||||||
Raw materials and component parts | $ | 208 | $ | 167 | ||||||||||||
Work-in-process | 579 | 575 | ||||||||||||||
Finished goods | 457 | 446 | ||||||||||||||
Total inventories | $ | 1,244 | $ | 1,188 | ||||||||||||
Property, plant and equipment: | ||||||||||||||||
Property, plant and equipment | $ | 7,764 | $ | 7,616 | ||||||||||||
Accumulated depreciation | (4,126 | ) | (3,916 | ) | ||||||||||||
Property, plant and equipment, net | $ | 3,638 | $ | 3,700 | ||||||||||||
Other intangible assets: | ||||||||||||||||
Other intangible assets | $ | 1,011 | $ | 948 | ||||||||||||
Accumulated amortization | (395 | ) | (343 | ) | ||||||||||||
Other intangible assets, net | $ | 616 | $ | 605 | ||||||||||||
Warranty | ||||||||||||||||
The Company records an accrual for estimated warranty costs when revenue is recognized. The Company generally warrants its products for a period of one to five years. The warranty provision considers estimated product failure rates and trends, estimated replacement costs, estimated repair costs which include scrap costs, and estimated costs for customer compensatory claims related to product quality issues, if any. A statistical warranty tracking model is used to help prepare estimates and assist the Company in exercising judgment in determining the underlying estimates. The statistical tracking model captures specific detail on hard drive reliability, such as factory test data, historical field return rates, and costs to repair by product type. Management’s judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited field experience with those products upon which to base warranty estimates. Management reviews the warranty accrual quarterly for products shipped in prior periods and which are still under warranty. Any changes in the estimates underlying the accrual may result in adjustments that impact current period gross profit and income. Such changes are generally a result of differences between forecasted and actual return rate experience and costs to repair. If actual product return trends, costs to repair returned products or costs of customer compensatory claims differ significantly from estimates, future results of operations could be materially affected. Changes in the warranty accrual were as follows (in millions): | ||||||||||||||||
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
September 27, | September 28, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Warranty accrual, beginning of period | $ | 187 | $ | 260 | ||||||||||||
Warranty liability assumed as a result of acquisition (see Note 11) | 3 | — | ||||||||||||||
Charges to operations | 40 | 46 | ||||||||||||||
Utilization | (49 | ) | (60 | ) | ||||||||||||
Changes in estimate related to pre-existing warranties | 14 | (16 | ) | |||||||||||||
Warranty accrual, end of period | $ | 195 | $ | 230 | ||||||||||||
The long-term portion of the warranty accrual classified in other liabilities was $72 million at September 27, 2013 and $73 million at June 28, 2013. | ||||||||||||||||
Other Comprehensive Income (Loss) | ||||||||||||||||
Other comprehensive income (loss) refers to revenue, expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) is comprised of unrealized gains and losses on foreign exchange contracts and actuarial gains and losses related to pensions. The income tax impact on components of other comprehensive income is immaterial for all periods presented. | ||||||||||||||||
The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the three months ended September 27, 2013 (in millions): | ||||||||||||||||
Actuarial Pension Gains (Losses) | Foreign Currency Translation Gains (Losses) | Unrealized Gains (Losses) on Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Beginning balance | $ | 11 | $ | — | $ | (46 | ) | $ | (35 | ) | ||||||
Other comprehensive income before reclassifications | — | — | (11 | ) | (11 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | 27 | 27 | ||||||||||||
Net current-period other comprehensive income | — | — | 16 | 16 | ||||||||||||
Ending balance | $ | 11 | $ | — | $ | (30 | ) | $ | (19 | ) | ||||||
The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the three months ended September 28, 2012 (in millions): | ||||||||||||||||
Actuarial Pension Gains (Losses) | Foreign Currency Translation Gains (Losses) | Unrealized Gains (Losses) on Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Beginning balance | $ | (3 | ) | $ | 4 | $ | (16 | ) | $ | (15 | ) | |||||
Other comprehensive income before reclassifications | 1 | — | 31 | 32 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | (3 | ) | (3 | ) | ||||||||||
Net current-period other comprehensive income | 1 | — | 28 | 29 | ||||||||||||
Ending balance | $ | (2 | ) | $ | 4 | $ | 12 | $ | 14 | |||||||
Income_per_Common_Share
Income per Common Share | 3 Months Ended | |||||||
Sep. 27, 2013 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Income per Common Share | 3. Income per Common Share | |||||||
The Company computes basic income per common share using net income and the weighted average number of common shares outstanding during the period. Diluted income per common share is computed using net income and the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include certain dilutive outstanding employee stock options, rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”) and restricted stock unit awards (“RSUs”). | ||||||||
The following table illustrates the computation of basic and diluted income per common share (in millions, except per share data): | ||||||||
Three Months | ||||||||
Ended | ||||||||
September 27, | September 28, | |||||||
2013 | 2012 | |||||||
Net income | $ | 495 | $ | 519 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 236 | 246 | ||||||
Employee stock options and other | 6 | 6 | ||||||
Diluted | 242 | 252 | ||||||
Income per common share: | ||||||||
Basic | $ | 2.1 | $ | 2.11 | ||||
Diluted | $ | 2.05 | $ | 2.06 | ||||
Anti-dilutive potential common shares excluded* | 1 | 3 | ||||||
* | For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive. |
Debt
Debt | 3 Months Ended |
Sep. 27, 2013 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt |
On March 8, 2012 (the “HGST Closing Date”), the Company, in its capacity as the parent entity and guarantor, Western Digital Technologies, Inc. (“WDT”), a wholly owned subsidiary of the Company, and Western Digital Ireland, Ltd. (“WDI”), an indirect wholly owned subsidiary of the Company, entered into a five-year credit agreement (the “Credit Facility”) with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and certain other participating lenders (collectively, the “Lenders”). The Credit Facility provided for $2.8 billion of unsecured loan facilities consisting of a $2.3 billion term loan facility and a $500 million revolving credit facility. The only borrower under the term loan facility is WDI and the revolving credit facility is available to both WDI and WDT (WDI and WDT are referred to as “the Borrowers”). The Borrowers may elect to expand the Credit Facility by up to an additional $500 million if existing or new lenders provide additional term or revolving commitments. The obligations of the Borrowers under the Credit Facility are guaranteed by the Company and the Company’s material domestic subsidiaries, and the obligations of WDI under the Credit Facility are also guaranteed by WDT. During the three months ended September 27, 2013, WDT borrowed $500 million under the revolving credit facility. | |
The term loans and the revolving credit loans may be prepaid in whole or in part at any time without premium or penalty, subject to certain conditions. As of September 27, 2013, the term loan facility and revolving credit facility had a variable interest rate of 2.18% and a total remaining outstanding balance of $2.4 billion. The Company is required to make principal payments on the term loan facility totaling $230 million a year for fiscal 2014 through fiscal 2016, and the remaining $1.3 billion balance (subject to adjustment to reflect prepayments or an increase to its term loan facility) is due and payable in full on March 8, 2017. The outstanding amount of the revolving credit facility is also required to be repaid by March 8, 2017. The Company intends to repay the revolving credit facility within one year; therefore, the outstanding balance of $500 million under the revolving credit facility is classified as a current liability on the condensed consolidated balance sheet. | |
The Credit Facility requires the Company to comply with a leverage ratio and an interest coverage ratio calculated on a consolidated basis for the Company and its subsidiaries. In addition, the Credit Facility contains customary covenants, including covenants that limit or restrict, subject to certain exceptions, the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merge, consolidate or dispose of substantially all of its assets, and enter into certain speculative hedging arrangements and make any material change in the nature of its business. Upon the occurrence of an event of default under the Credit Facility, the administrative agent at the request, or with the consent, of the Required Lenders (as defined in the Credit Facility) may cease making loans, terminate the Credit Facility and declare all amounts outstanding to be immediately due and payable, require the cash collateralization of letters of credit and/or exercise all other rights and remedies available to it, the Lenders and the letter of credit issuer. The Credit Facility specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and a change of control default. As of September 27, 2013, the Company was in compliance with all covenants. |
Legal_Proceedings
Legal Proceedings | 3 Months Ended |
Sep. 27, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 5. Legal Proceedings |
When the Company becomes aware of a claim or potential claim, the Company assesses the likelihood of any loss or exposure. The Company discloses information regarding each material claim where the likelihood of a loss contingency is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, the Company discloses an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible losses is not material to the Company’s financial position, results of operations or cash flows. Unless otherwise stated below, for each of the matters described below, the Company has either recorded an accrual for losses that are probable and reasonably estimable or has determined that, while a loss is reasonably possible (including potential losses in excess of the amounts accrued by the Company), a reasonable estimate of the amount of loss or range of possible losses with respect to the claim or in excess of amounts already accrued by the Company cannot be made. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. | |
Solely for purposes of this footnote, “WD” refers to Western Digital Corporation or one or more of its subsidiaries excluding HGST prior to the HGST Closing Date. HGST refers to Hitachi Global Storage Technologies Holdings Pte. Ltd. or one or more of its subsidiaries as of the HGST Closing Date, and “the Company” refers to Western Digital Corporation and all of its subsidiaries on a consolidated basis including HGST. | |
Intellectual Property Litigation | |
On June 20, 2008, plaintiff Convolve, Inc. (“Convolve”) filed a complaint in the Eastern District of Texas against WD, HGST, and one other company alleging infringement of U.S. Patent Nos. 6,314,473 and 4,916,635. The complaint sought unspecified monetary damages and injunctive relief. On October 10, 2008, Convolve amended its complaint to allege infringement of only the ‘473 patent. The ‘473 patent allegedly relates to interface technology to select between certain modes of a disk drive’s operations relating to speed and noise. A trial in the matter began on July 18, 2011 and concluded on July 26, 2011 with a verdict against WD and HGST in an amount that is not material to the Company’s financial position, results of operations or cash flows. WD and HGST have filed post-trial motions challenging the verdict and will evaluate their options for appeal after the Court rules on the post-trial motions. | |
On December 7, 2009, plaintiff Nazomi Communications (“Nazomi”) filed a complaint in the Eastern District of Texas against WD and seven other companies alleging infringement of U.S. Patent Nos. 7,080,362 and 7,225,436. Nazomi dismissed the Eastern District of Texas suit after filing a similar complaint in the Central District of California on February 8, 2010. The case was subsequently transferred to the Northern District of California on October 14, 2010. The complaint seeks injunctive relief and unspecified monetary damages, fees and costs. The asserted patents allegedly relate to processor cores capable of Java hardware acceleration. In August 2012, the Court dismissed WD on summary judgment for non-infringement. Nazomi filed a notice of appeal on January 16, 2013. The Federal Circuit hearing for the appeal is scheduled for November 4, 2013. WD intends to continue to defend itself vigorously in this matter. | |
On August 1, 2011, plaintiff Guzik Technical Enterprises (“Guzik”) filed a complaint in the Northern District of California against WD and various of its subsidiaries alleging infringement of U.S. Patent Nos. 6,023,145 and 6,785,085, breach of contract and misappropriation of trade secrets. The complaint seeks injunctive relief and unspecified monetary damages, fees and costs. The patents asserted by Guzik allegedly relate to devices used to test hard disk drive heads and media. WD has filed counterclaims against Guzik for patent infringement of U.S. Patent Nos. 5,844,420; 5,640,089; 6,891,696; and 7,480,116. The patents asserted by WD relate to devices and methods used in the testing of hard disk drive heads and media. WD intends to defend itself vigorously in this matter. | |
On July 9, 2012, Siemens Aktiengesellschaft (“Siemens”) filed a complaint in German court alleging patent infringement of European patent no. EP 674769, which claims an artificial antiferromagnetic (AAF) (aka, synthetic antiferromagnetic) structure for giant magneto-resistive (GMR) sensors. On March 14-15, 2013, the Company filed a response of noninfringement and also filed a separate nullity action. Siemens separately served WD on July 15, 2013. WD responded on September 6, 2013. Siemens' response is due on December 31, 2013. The Company’s rejoinder will then be due on February 28, 2014. The oral hearing will be on March 11, 2014. The Company intends to defend itself vigorously in this matter. | |
On April 29, 2013, plaintiffs Charles C. Freeney III et al. filed a complaint in the Eastern District of Texas against WD alleging infringement of U.S. Patent No. 7,110,744. The complaint seeks injunctive relief and unspecified monetary damages, fees and costs. The patent allegedly relates to WD’s AC router products. WD intends to defend itself vigorously in this matter. | |
On September 5, 2013, plaintiff Lake Cherokee Hard Drive Technologies, LLC (“Lake Cherokee”) filed a complaint in the Eastern District of Texas against: Marvell Asia PTE, Ltd., Samsung Semiconductor, Inc., Seagate Tech. LLC, Seagate Tech. Int’l., Toshiba Corp., Toshiba Am. Elec. Components, Toshiba Am. Inf. Sys., Inc., Toshiba Am. Inf. Equip. (Philippines), Inc., and Western Digital Technologies, Inc. alleging infringement of US Patent Nos. 5,844,738 and 5,978,162. Lake Cherokee alleges that WD’s hard disk drive products that contain Marvell read channel systems-on-a-chip (SOCs) infringe its ’738 and ’162 patents. The complaint seeks unspecified monetary damages, fees and costs. The Company intends to defend itself vigorously in this matter. | |
On September 5, 2013, plaintiff Lake Cherokee filed a complaint in the Eastern District of Texas against: Marvell Semiconductor, Inc., Marvell Asia PTE, Ltd., Dell Inc., and Western Digital Technologies, Inc. alleging infringement of US Patent No. 5,583,706. Lake Cherokee alleges that WD’s hard disk drive products that contain Marvell read channel systems-on-a-chip (SOCs) infringe its ’706 patent. The complaint seeks an injunction, unspecified monetary damages, fees and costs. The Company intends to defend itself vigorously in this matter. | |
On September 9, 2013, plaintiff Garnet Digital, LLC filed a complaint in the Eastern District of Texas against Western Digital Technologies, Inc., alleging infringement of US Patent No. 5,379,421. Garnet Digital alleges that the Company’s WD TV Live product infringes the ’421 patent. The complaint seeks unspecified monetary damages, fees and costs. The Company intends to defend itself vigorously in this matter. | |
Seagate Matter | |
On October 4, 2006, plaintiff Seagate Technology LLC (“Seagate”) filed an action in the District Court of Hennepin County, Minnesota, naming as defendants WD and one of its now former employees previously employed by Seagate. The complaint in the action alleged claims based on supposed misappropriation of trade secrets and sought injunctive relief and unspecified monetary damages, fees and costs. On June 19, 2007, WD’s former employee filed a demand for arbitration with the American Arbitration Association. A motion to stay the litigation as against all defendants and to compel arbitration of all Seagate’s claims was granted on September 19, 2007. On September 23, 2010, Seagate filed a motion to amend its claims and add allegations based on the supposed misappropriation of additional confidential information, and the arbitrator granted Seagate’s motion. The arbitration hearing commenced on May 23, 2011 and concluded on July 11, 2011. | |
On November 18, 2011, the sole arbitrator ruled in favor of WD in connection with five of the eight alleged trade secrets at issue, based on evidence that such trade secrets were known publicly at the time the former employee joined WD. Based on a determination that the employee had fabricated evidence, the arbitrator then concluded that WD had to know of the fabrications. As a sanction, the arbitrator precluded any evidence or defense by WD disputing the validity, misappropriation, or use of the three remaining alleged trade secrets by WD, and entered judgment in favor of Seagate with respect to such trade secrets. Using an unjust enrichment theory of damages, the arbitrator issued an interim award against WD in the amount of $525 million plus pre-award interest at the Minnesota statutory rate of 10% per year. In his decision with respect to these three trade secrets, the arbitrator did not question the relevance, veracity or credibility of any of WD’s ten expert and fact witnesses (other than WD’s former employee), nor the authenticity of any other evidence WD presented. On January 23, 2012, the arbitrator issued a final award adding pre-award interest in the amount of $105.4 million for a total final award of $630.4 million. On January 23, 2012, WD filed a petition in the District Court of Hennepin County, Minnesota to have the final arbitration award vacated. A hearing on the petition to vacate was held on March 1, 2012. | |
On October 12, 2012, the District Court of Hennepin County, Minnesota vacated, in full, the $630.4 million final arbitration award. Specifically, the Court confirmed the arbitration award with respect to each of the five trade secret claims that WD and the former employee had won at the arbitration and vacated the arbitration award with respect to the three trade secret claims that WD and the former employee had lost at the arbitration. The Court ordered that a rehearing be held concerning those three alleged trade secret claims before a new arbitrator. | |
On October 30, 2012, Seagate initiated an appeal of the Court’s decision with the Minnesota Court of Appeals. On July 22, 2013, the Minnesota Court of Appeals reversed the District Court’s decision and remanded for entry of an order and judgment confirming the arbitration award. The Company strongly disagrees with the decision of the Court of Appeals and believes that the District Court’s decision was correct. On August 20, 2013, the Company filed a petition for review with the Minnesota Supreme Court and, on October 15, 2013, the Company was informed that the Minnesota Supreme Court granted the Company’s petition. The order of the Minnesota Supreme Court provides that the parties will file briefs with the Minnesota Supreme Court, and the Minnesota Supreme Court will subsequently set the matter for argument. The Company will continue to vigorously defend itself in this matter. In light of uncertainties with respect to this matter, the Company recorded an accrual of $681 million for this matter in its financial statements in the fourth quarter of fiscal 2013 and recorded additional interest totaling $13 million in the three months ended September 27, 2013, which is included within charges related to arbitration award in the condensed consolidated statement of income. This amount is in addition to the $25 million previously accrued in the fourth quarter of fiscal 2011. The total amount accrued of $719 million represents the amount of the final arbitration award, plus interest accrued on the initial arbitration award at the statutory rate of 10% from January 24, 2012 through September 27, 2013. | |
Other Matters | |
In the normal course of business, the Company is subject to other legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these other matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these other matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from these other matters could differ materially from those projected. |
Income_Taxes
Income Taxes | 3 Months Ended |
Sep. 27, 2013 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes |
The Company’s income tax provision for the three months ended September 27, 2013 was $37 million as compared to $59 million in the prior-year period. The differences between the effective tax rate and the U.S. Federal statutory rate are primarily due to tax holidays in Malaysia, the Philippines, Singapore and Thailand that expire at various dates from 2014 through 2025 and the current year generation of income tax credits. | |
In the three months ended September 27, 2013, the Company recorded a net increase of $7 million in its liability for unrecognized tax benefits. As of September 27, 2013, the Company had a recorded liability for unrecognized tax benefits of approximately $247 million. Interest and penalties recognized on such amounts were not material to the condensed consolidated financial statements during the three months ended September 27, 2013. | |
The Internal Revenue Service (“IRS”) completed its field examination of the Company’s federal income tax returns for fiscal years 2006 and 2007 and issued Revenue Agent Reports (“RARs”) that proposed adjustments to income before income taxes of approximately $970 million primarily related to transfer pricing and intercompany payable balances. The Company disagreed with the proposed adjustments and filed a protest with the IRS Appeals Office. In June 2013, the Company reached an agreement with the IRS to resolve the transfer pricing issue. This agreement resulted in a decrease in the amount of net operating loss and tax credits realized, but did not have an impact on the Company’s consolidated statements of income. The proposed adjustment relating to intercompany payable balances for fiscal years 2006 and 2007 will be addressed in conjunction with the IRS’s examination of the Company’s fiscal years 2008 and 2009, which commenced in January 2012. In addition, in January 2012, the IRS commenced an examination of the 2007 fiscal period ended September 5, 2007 of Komag, Incorporated, which was acquired by the Company on September 5, 2007. In February 2013, the IRS commenced an examination of calendar years 2010 and 2011 of HGST, which was acquired by the Company on March 8, 2012. | |
The Company believes that adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. As of September 27, 2013, it is not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months. Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information or settlements relating to the examination of the Company’s tax returns. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Sep. 27, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | 7. Fair Value Measurements | |||||||||||||||
Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels: | ||||||||||||||||
Level 1. Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||
Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 27, 2013, and indicates the fair value hierarchy of the valuation techniques utilized to determine such value (in millions): | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,158 | $ | — | $ | — | $ | 2,158 | ||||||||
Foreign exchange contracts | — | 5 | — | 5 | ||||||||||||
Auction-rate securities | — | — | 14 | 14 | ||||||||||||
Total assets at fair value | $ | 2,158 | $ | 5 | $ | 14 | $ | 2,177 | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 41 | $ | — | $ | 41 | ||||||||
Total liabilities at fair value | $ | — | $ | 41 | $ | — | $ | 41 | ||||||||
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 28, 2013, and indicates the fair value hierarchy of the valuation techniques utilized to determine such value (in millions): | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 1,227 | $ | — | $ | — | $ | 1,227 | ||||||||
Auction-rate securities | — | — | 14 | 14 | ||||||||||||
Total assets at fair value | $ | 1,227 | $ | — | $ | 14 | $ | 1,241 | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 57 | $ | — | $ | 57 | ||||||||
Total liabilities at fair value | $ | — | $ | 57 | $ | — | $ | 57 | ||||||||
Money Market Funds. The Company’s money market funds are funds that invest in U.S. Treasury and U.S. Government Agency securities and are recorded within cash and cash equivalents in the condensed consolidated balance sheets. Money market funds are valued based on quoted market prices. | ||||||||||||||||
Auction-Rate Securities. The Company’s auction-rate securities have maturity dates through 2050, are primarily backed by insurance products and are accounted for as available-for-sale securities. These investments are classified as long-term investments and recorded within other non-current assets in the condensed consolidated balance sheets. Auction-rate securities are valued by a third party using trade information related to the secondary market. | ||||||||||||||||
Foreign Exchange Contracts. The Company’s foreign exchange contracts are short-term contracts to hedge the Company’s foreign currency risk. Foreign exchange contracts are classified within other current assets and liabilities in the condensed consolidated balance sheets. For contracts that have a right of offset by its individual counterparties under master netting arrangements, the Company presents its foreign exchange contracts on a net basis by counterparty in the condensed consolidated balance sheets. For more information on the Company's foreign exchange contracts, see Note 8 below. Foreign exchange contracts are valued using an income approach that is based on a present value of future cash flows model. The market-based observable inputs for the model include forward rates and credit default swap rates. | ||||||||||||||||
In the three months ended September 27, 2013, there were no transfers between levels and no changes in Level 3 financial assets measured on a recurring basis. | ||||||||||||||||
The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value for all periods presented because of the short-term maturity of these assets and liabilities. The carrying amount of debt approximates fair value because of its variable interest rate. |
Foreign_Exchange_Contracts
Foreign Exchange Contracts | 3 Months Ended | |||||||||||||||||||||||
Sep. 27, 2013 | ||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||
Foreign Exchange Contracts | 8. Foreign Exchange Contracts | |||||||||||||||||||||||
Although the majority of the Company’s transactions are in U.S. dollars, some transactions are based in various foreign currencies. The Company purchases short-term, foreign exchange contracts to hedge the impact of foreign currency exchange fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs denominated in foreign currencies. The purpose of entering into these hedging transactions is to minimize the impact of foreign currency fluctuations on the Company’s results of operations. These contract maturity dates do not exceed 12 months. All foreign exchange contracts are for risk management purposes only. The Company does not purchase foreign exchange contracts for trading purposes. As of September 27, 2013, the Company had outstanding foreign exchange contracts with commercial banks for British Pound Sterling, Euro, Japanese Yen, Malaysian Ringgit, Philippine Peso, Singapore Dollar and Thai Baht, which were designated as either cash flow or fair value hedges. | ||||||||||||||||||||||||
If the derivative is designated as a cash flow hedge, the effective portion of the change in fair value of the derivative is initially deferred in other comprehensive income (loss), net of tax and presented within cash flow from operations. These amounts are subsequently recognized into earnings when the underlying cash flow being hedged is recognized into earnings. Recognized gains and losses on foreign exchange contracts entered into for manufacturing-related activities are reported in cost of revenue. Hedge effectiveness is measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the underlying exposure’s terminal value. The Company determined the ineffectiveness associated with its cash flow hedges to be immaterial to the condensed consolidated financial statements for the three months ended September 27, 2013 and September 28, 2012. | ||||||||||||||||||||||||
A change in the fair value of fair value hedges is recognized in earnings in the period incurred and is reported as a component of operating expenses. All fair value hedges were determined to be effective. The fair value and the changes in fair value on these contracts were immaterial to the condensed consolidated financial statements during the three months ended September 27, 2013 and September 28, 2012. | ||||||||||||||||||||||||
As of September 27, 2013, the net amount of unrealized losses with respect to the Company’s foreign exchange contracts that is expected to be reclassified into earnings within the next 12 months was $30 million. In addition, as of September 27, 2013, the Company did not have any foreign exchange contracts with credit-risk-related contingent features. The Company opened $1.0 billion and $769 million and closed $1.4 billion and $1.1 billion, in foreign exchange contracts in the three months ended September 27, 2013 and September 28, 2012, respectively. The fair value and balance sheet location of such contracts were as follows (in millions): | ||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
27-Sep-13 | 28-Jun-13 | 27-Sep-13 | 28-Jun-13 | |||||||||||||||||||||
Derivatives Designated as | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | ||||||||||||||||
Hedging Instruments | Location | Value | Location | Value | Location | Value | Location | Value | ||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 5 | Other current assets | $ | — | Accrued expenses | $ | 41 | Accrued expenses | $ | 57 | ||||||||||||
The following table presents the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized in the condensed consolidated balance sheet as of September 27, 2013 (in millions): | ||||||||||||||||||||||||
Gross Amounts not Offset in the Balance Sheet | ||||||||||||||||||||||||
Derivatives Designated as | Gross Amounts of Recognized Assets/ (Liabilities) | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets/ (Liabilities) Presented in the Balance Sheet | Financial Instruments | Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Financial assets | $ | 11 | $ | (6 | ) | $ | 5 | $ | — | $ | — | $ | 5 | |||||||||||
Financial liabilities | (47 | ) | 6 | (41 | ) | — | — | (41 | ) | |||||||||||||||
Total Derivative Instruments | $ | (36 | ) | $ | — | $ | (36 | ) | $ | — | $ | — | $ | (36 | ) | |||||||||
The following table presents the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized in the condensed consolidated balance sheet as of June 28, 2013 (in millions): | ||||||||||||||||||||||||
Gross Amounts not Offset in the Balance Sheet | ||||||||||||||||||||||||
Derivatives Designated as | Gross Amounts of Recognized Assets/ (Liabilities) | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets/ (Liabilities) Presented in the Balance Sheet | Financial Instruments | Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Financial assets | $ | 10 | $ | (10 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Financial liabilities | (67 | ) | 10 | (57 | ) | — | — | (57 | ) | |||||||||||||||
Total Derivative Instruments | $ | (57 | ) | $ | — | $ | (57 | ) | $ | — | $ | — | $ | (57 | ) | |||||||||
The impact on the condensed consolidated financial statements was as follows (in millions): | ||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in | Location of | Amount of Gain (Loss) Reclassified | ||||||||||||||||||||||
Accumulated OCI on Derivatives | Gain (Loss) | From Accumulated OCI into Income | ||||||||||||||||||||||
Reclassified | ||||||||||||||||||||||||
from | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Derivatives in Cash | Three | Three | OCI into | Three | Three | |||||||||||||||||||
Flow Hedging Relationships | Months | Months | Income | Months | Months | |||||||||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Foreign exchange contracts | $ | (11 | ) | $ | 31 | Cost of revenue | $ | (27 | ) | $ | 3 | |||||||||||||
The total net realized transaction and foreign exchange contract currency gains and losses were not material to the condensed consolidated financial statements during the three months ended September 27, 2013 and September 28, 2012. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||
Sep. 27, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-Based Compensation | 9. Stock-Based Compensation | ||||||||||||
In connection with the acquisition of sTec, the Company assumed all of the unvested RSUs outstanding under sTec’s stock plans as of the acquisition date. In addition, the Company assumed all of the stock options outstanding under sTec’s stock plans as of the acquisition date with the exception of any unvested, unexercised and outstanding stock options that had an exercise price greater than the merger consideration as defined in the merger agreement. The assumed stock options and RSUs were converted into equivalent stock options and RSUs with respect to shares of the Company’s common stock using an equity award exchange ratio (see Note 11). | |||||||||||||
Stock-based Compensation Expense | |||||||||||||
During the three months ended September 27, 2013, the Company recognized in expense $21 million for stock-based compensation related to the vesting of options issued under the Company’s stock plans and the ESPP, as compared to $25 million in the prior-year period. The tax benefit realized as a result of the aforementioned stock-based compensation expense was $5 million and $7 million in the three months ended September 27, 2013 and September 28, 2012, respectively. As of September 27, 2013, total compensation cost related to unvested stock options and ESPP rights issued to employees but not yet recognized was $120 million and will be amortized on a straight-line basis over a weighted average service period of approximately 2.3 years. | |||||||||||||
During the three months ended September 27, 2013, the Company recognized in expense $21 million for stock-based compensation related to the vesting of awards of RSUs issued under the Company's stock plans, as compared to $14 million in the prior-year period. The tax benefit realized as a result of the aforementioned stock-based compensation expense was $4 million in both the three months ended September 27, 2013 and September 28, 2012. As of September 27, 2013, the aggregate unamortized fair value of all unvested RSUs was $144 million, which will be recognized on a straight-line basis over a weighted average vesting period of approximately 2.0 years. RSUs include performance stock unit awards (“PSUs”). The effect of PSUs was immaterial to the condensed consolidated financial statements in the three months ended September 27, 2013 and September 28, 2012. | |||||||||||||
During the three months ended September 27, 2013, the Company recognized in expense $4 million related to adjustments to market value as well as the vesting of stock appreciation rights (“SARs”), as compared to $12 million in the prior-year period. The tax benefit realized as a result of the aforementioned SARs expense was $1 million and $3 million in the three months ended September 27, 2013 and September 28, 2012, respectively. The SARs will be settled in cash upon exercise. As a result, the Company had a total liability of $48 million related to SARs included in accrued expenses in the condensed consolidated balance sheet as of September 27, 2013. In addition, as of September 27, 2013, total compensation cost related to unvested SARs issued to employees but not yet recognized was $8 million and will be recognized on a straight-line basis over a weighted average service period of approximately 0.6 years. | |||||||||||||
Stock Option Activity | |||||||||||||
The following table summarizes stock option activity under the Company’s stock option plans (in millions, except per share amounts and remaining contractual lives): | |||||||||||||
Number | Weighted | Weighted | Aggregate | ||||||||||
of | Average | Average | Intrinsic | ||||||||||
Shares | Exercise | Remaining | Value | ||||||||||
Price | Contractual | ||||||||||||
Per | Life | ||||||||||||
Share | (in years) | ||||||||||||
Options outstanding at June 28, 2013 | 11.9 | $ | 29.47 | ||||||||||
Granted | 1.6 | 68.4 | |||||||||||
Assumed in acquisition | 0.4 | 117.41 | |||||||||||
Exercised | (0.7 | ) | 30.14 | ||||||||||
Canceled or expired | (0.1 | ) | 29.93 | ||||||||||
Options outstanding at September 27, 2013 | 13.1 | $ | 36.77 | 4.4 | $ | 380 | |||||||
Exercisable at September 27, 2013 | 5.9 | $ | 32.6 | 3.1 | $ | 205 | |||||||
Vested and expected to vest after September 27, 2013 | 12.9 | $ | 36.51 | 4.4 | $ | 377 | |||||||
If an option has an exercise price that is less than the quoted price of the Company’s common stock at the particular time, the aggregate intrinsic value of that option at that time is calculated based on the difference between the exercise price of the underlying options and the quoted price of the Company’s common stock at that time. As of September 27, 2013, the Company had options outstanding to purchase an aggregate of 11.2 million shares with an exercise price below the quoted price of the Company’s stock on that date resulting in an aggregate intrinsic value of $380 million at that date. During the three months ended September 27, 2013, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $27 million, determined as of the date of exercise, as compared to $55 million in the prior-year period. | |||||||||||||
RSU Activity | |||||||||||||
The following table summarizes RSU activity under the Company's stock plans (in millions, except weighted average grant date fair value): | |||||||||||||
Number | Weighted Average | ||||||||||||
of Shares | Grant-Date | ||||||||||||
Fair Value | |||||||||||||
RSUs outstanding at June 28, 2013 | 3.6 | $ | 35.82 | ||||||||||
Granted | 1.3 | 68.41 | |||||||||||
Assumed in acquisition | 0.2 | 62.73 | |||||||||||
Vested | (0.9 | ) | 29.73 | ||||||||||
RSUs outstanding at September 27, 2013 | 4.2 | $ | 48.39 | ||||||||||
Expected to vest after September 27, 2013 | 4 | $ | 48.13 | ||||||||||
The fair value of each RSU is the market price of the Company’s stock at the date of grant. RSUs are generally payable in an equal number of shares of the Company’s common stock at the time of vesting of the units. The grant-date fair value of the shares underlying the RSU awards at the date of grant was $88 million in the three months ended September 27, 2013. These amounts are being recognized to expense over the corresponding vesting periods. For purposes of valuing these awards, the Company has assumed a forfeiture rate of 3.3%, based on a historical analysis indicating forfeitures for these types of awards. | |||||||||||||
SARs Activity | |||||||||||||
The share-based compensation liability for SARs is recognized for the portion of fair value for which service has been rendered at the reporting date. The share-based liability is remeasured at each reporting date, using a binomial option-pricing model, through the requisite service period. As of September 27, 2013, 1.0 million SARs were outstanding with a weighted average exercise price of $7.89. There were no SARs granted and all other SARs activity was immaterial to the condensed consolidated financial statements for the three months ended September 27, 2013. | |||||||||||||
Fair Value Disclosure — Binomial Model | |||||||||||||
The fair value of stock options granted is estimated using a binomial option-pricing model. The binomial model requires the input of highly subjective assumptions. The Company uses historical data to estimate exercise, employee termination, and expected stock price volatility within the binomial model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of stock options granted was estimated using the following weighted average assumptions: | |||||||||||||
Three Months Ended | |||||||||||||
September 27, | September 28, | ||||||||||||
2013 | 2012 | ||||||||||||
Suboptimal exercise factor | 2.06 | 1.9 | |||||||||||
Range of risk-free interest rates | 0.10% to 2.02% | 0.17% to 1.04% | |||||||||||
Range of expected stock price volatility | 0.31 to 0.50 | 0.44 to 0.53 | |||||||||||
Weighted average expected volatility | 0.43 | 0.49 | |||||||||||
Post-vesting termination rate | 3.09% | 2.08% | |||||||||||
Dividend yield | 1.58% | 2.58% | |||||||||||
Fair value | $24.00 | $15.63 | |||||||||||
The weighted average expected term of the Company’s stock options granted during the three months ended September 27, 2013 was 5.0 years, compared to 4.0 years in the comparative prior-year period. | |||||||||||||
Fair Value Disclosure — Black-Scholes-Merton Model | |||||||||||||
The fair value of ESPP purchase rights issued is estimated at the date of grant of the purchase rights using the Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model requires the input of highly subjective assumptions such as the expected stock price volatility and the expected period until options are exercised. Purchase rights under the current ESPP are granted on either June 1st or December 1st of each year. ESPP activity was immaterial to the condensed consolidated financial statements for the three months ended September 27, 2013 and September 28, 2012. | |||||||||||||
Stock Repurchase Program | |||||||||||||
On May 21, 2012, the Company announced that the Board of Directors authorized an additional $1.5 billion for the repurchase of its common stock through May 18, 2017. On September 13, 2012, the Company announced that the Board of Directors authorized an additional $1.5 billion for the repurchase of its common stock and the extension of its stock repurchase program until September 13, 2017. The Company repurchased 2.3 million shares for a total cost of $150 million during the three months ended September 27, 2013. The remaining amount available to be purchased under the Company’s stock repurchase program as of September 27, 2013 was $1.8 billion. The Company may continue to repurchase its stock as it deems appropriate and market conditions allow. Repurchases under the stock repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. The Company expects stock repurchases to be funded principally by operating cash flows. | |||||||||||||
Dividends to Shareholders | |||||||||||||
On September 13, 2012, the Company announced that its Board of Directors had authorized the adoption of a quarterly cash dividend policy. Under the cash dividend policy, holders of the Company’s common stock receive dividends when and as declared by the Company’s Board of Directors. In the three months ended September 27, 2013, the Company declared a cash dividend of $0.25 per share of the Company’s common stock to shareholders of record as of September 30, 2013, totaling $59 million, which was paid on October 15, 2013. The Company may modify, suspend or cancel its cash dividend policy in any manner and at any time. |
Pensions_and_Other_Postretirem
Pensions and Other Post-retirement Benefit Plans | 3 Months Ended | |||||||
Sep. 27, 2013 | ||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||
Pensions and Other Post-retirement Benefit Plans | 10. Pensions and Other Post-retirement Benefit Plans | |||||||
The Company’s principal pension and other post-retirement benefit plans are in Japan. All pension and other post-retirement benefit plans outside of the Company’s Japanese plans were immaterial to the Company’s condensed consolidated financial statements for the three months ended September 27, 2013 and September 28, 2012. The expected long-term rate of return on the Japanese plan assets is 3.5%. | ||||||||
The following table presents the unfunded status of the benefit obligations and Japanese plan assets (in millions): | ||||||||
September 27, | June 28, | |||||||
2013 | 2013 | |||||||
Benefit obligation | $ | 238 | $ | 234 | ||||
Fair value of plan assets | (172 | ) | (167 | ) | ||||
Unfunded status | $ | 66 | $ | 67 | ||||
The following table presents the unfunded amounts as recognized on the Company’s condensed consolidated balance sheets (in millions): | ||||||||
September 27, | June 28, | |||||||
2013 | 2013 | |||||||
Current liabilities | $ | 1 | $ | 1 | ||||
Non-current liabilities | 65 | 66 | ||||||
Net amount recognized | $ | 66 | $ | 67 | ||||
The net periodic benefit cost of the Company’s pension plans was not material to the condensed consolidated financial statements for the three months ended September 27, 2013 and September 28, 2012. The Company’s expected employer contribution for its Japanese defined benefit pension plans is $13 million in fiscal 2014. |
Acquisition
Acquisition | 3 Months Ended | |||
Sep. 27, 2013 | ||||
Business Combinations [Abstract] | ||||
Acquisition | 11. Acquisitions | |||
Acquisition of sTec | ||||
On September 12, 2013, the Company completed its acquisition of sTec, a provider of enterprise solid-state drives. As a result of the acquisition, sTec was integrated into the Company's HGST subsidiary and became a wholly owned indirect subsidiary of the Company. The purchase price of the acquisition was approximately $336 million, consisting of $325 million which was funded with available cash and $11 million related to the fair value of stock options and RSUs assumed. The Company identified and recorded the assets acquired and liabilities assumed at their estimated fair values at the date of acquisition, and allocated the remaining value of $86 million to goodwill. The values assigned to the acquired assets and liabilities are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q, and may be adjusted as we complete our fair value analyses. Such amounts may be adjusted during the measurement period of up to 12 months from the date of the acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in material adjustments to goodwill. The preliminary purchase price allocation was as follows (in millions): | ||||
September 12, | ||||
2013 | ||||
Tangible assets acquired and liabilities assumed: | ||||
Cash | $ | 77 | ||
Accounts receivable | 12 | |||
Inventories | 35 | |||
Other current assets | 14 | |||
Property, plant and equipment | 44 | |||
Other non-current assets | 47 | |||
Accounts payable | (10 | ) | ||
Accrued liabilities | (22 | ) | ||
Other non-current liabilities | (5 | ) | ||
Intangible assets | 58 | |||
Goodwill | 86 | |||
Total | $ | 336 | ||
In-process research and development of $15 million that is included within intangible assets relates to projects associated with next generation PCIe products. The remaining intangible assets of $43 million primarily relates to existing technology that will be amortized to cost of revenue over the weighted average useful life of 3.5 years. | ||||
The $86 million of goodwill recognized is primarily attributable to the benefits the Company expects to derive from augmenting HGST's existing solid-state storage capabilities and accelerating its ability to expand its participation in the growing area of enterprise solid-state drives ("SSDs"). None of the goodwill is expected to be deductible for tax purposes. The impact to revenue and net income attributable to sTec was immaterial to the Company’s condensed consolidated financial statements for the three months ended September 27, 2013. | ||||
Acquisition of VeloBit | ||||
On July 10, 2013, the Company acquired VeloBit, a privately held provider of high-performance storage I/O optimization software. As a result of the acquisition, VeloBit was fully integrated into the Company's HGST subsidiary and became a wholly owned indirect subsidiary of the Company. The acquisition is intended to build on HGST's strategy to enhance the overall value of datacenter storage by integrating HGST SSDs with software. The impact of the acquisition was not material to the Company's condensed consolidated financial statements. |
Employee_Termination_Benefits_
Employee Termination Benefits and Other Charges | 3 Months Ended |
Sep. 27, 2013 | |
Postemployment Benefits [Abstract] | |
Employee Termination Benefits and Other Charges | 12. Employee Termination Benefits and Other Charges |
During 2013, the Company incurred charges of $138 million to realign its operations with anticipated market demand. These charges consisted of $109 million of employee termination benefits, $14 million of asset impairment charges and $15 million of other charges and were classified as operating expenses and included within employee termination benefits and other charges in the consolidated statements of income. At June 28, 2013, the Company had a liability of $46 million related to employee termination benefits and other charges. In the three months ended September 27, 2013, the Company settled $9 million of contract termination charges and paid out $18 million of employee termination benefits. As a result, the Company's liability related to employee termination benefits and other charges totaled $19 million at September 27, 2013. The remaining liabilities are expected to be primarily settled by the second quarter of fiscal 2014. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Sep. 27, 2013 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 13. Recent Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”). The new standard requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. The Company adopted this pronouncement in the first quarter of fiscal 2014. Since ASU 2013-02 related only to the presentation and disclosure of information, it did not have a material effect on the Company’s condensed consolidated financial statements. | |
In July 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"). The new standard requires the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the condensed consolidated balance sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2013, which for the Company is the first quarter of fiscal 2015. The Company is currently evaluating the impact ASU 2013-11 will have to its condensed consolidated balance sheets. |
Subsequent_Event_Subsequent_Ev
Subsequent Event Subsequent Event (Notes) | 3 Months Ended |
Sep. 27, 2013 | |
Subsequent Events [Abstract] | |
Subsequent Event | 14. Subsequent Event |
On October 17, 2013, the Company acquired Virident Systems, Inc. ("Virident"), a provider of server-side flash storage solutions for virtualization, database, cloud computing and webscale applications. Virident is being integrated into HGST, a wholly owned subsidiary of the Company. The acquisition price is estimated to be approximately $685 million and was funded with available cash. The acquisition is expected to further HGST's strategy to address the rapidly changing needs of enterprise customers by delivering intelligent storage solutions that maximize application performance by leveraging the tightly coupled server, storage and network resources of today’s converged datacenter infrastructures. Based upon the timing of the acquisition subsequent to the end of the Company's first quarter of fiscal 2014, the initial accounting for the business combination is incomplete at this time and the Company is in the process of determining the fair values of the net assets acquired and goodwill resulting from the acquisition. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Sep. 27, 2013 | |
Accounting Policies [Abstract] | |
Use of Estimates and Assumption | Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented. However, actual results could differ materially from these estimates. |
Supplemental_Financial_Stateme1
Supplemental Financial Statement Data (Tables) | 3 Months Ended | |||||||||||||||
Sep. 27, 2013 | ||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||
Inventories; Property, Plant and Equipment; and Other Intangible Assets | ||||||||||||||||
September 27, | June 28, | |||||||||||||||
2013 | 2013 | |||||||||||||||
(in millions) | ||||||||||||||||
Inventories: | ||||||||||||||||
Raw materials and component parts | $ | 208 | $ | 167 | ||||||||||||
Work-in-process | 579 | 575 | ||||||||||||||
Finished goods | 457 | 446 | ||||||||||||||
Total inventories | $ | 1,244 | $ | 1,188 | ||||||||||||
Property, plant and equipment: | ||||||||||||||||
Property, plant and equipment | $ | 7,764 | $ | 7,616 | ||||||||||||
Accumulated depreciation | (4,126 | ) | (3,916 | ) | ||||||||||||
Property, plant and equipment, net | $ | 3,638 | $ | 3,700 | ||||||||||||
Other intangible assets: | ||||||||||||||||
Other intangible assets | $ | 1,011 | $ | 948 | ||||||||||||
Accumulated amortization | (395 | ) | (343 | ) | ||||||||||||
Other intangible assets, net | $ | 616 | $ | 605 | ||||||||||||
Changes in Warranty Accrual | Changes in the warranty accrual were as follows (in millions): | |||||||||||||||
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
September 27, | September 28, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Warranty accrual, beginning of period | $ | 187 | $ | 260 | ||||||||||||
Warranty liability assumed as a result of acquisition (see Note 11) | 3 | — | ||||||||||||||
Charges to operations | 40 | 46 | ||||||||||||||
Utilization | (49 | ) | (60 | ) | ||||||||||||
Changes in estimate related to pre-existing warranties | 14 | (16 | ) | |||||||||||||
Warranty accrual, end of period | $ | 195 | $ | 230 | ||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the three months ended September 28, 2012 (in millions): | |||||||||||||||
Actuarial Pension Gains (Losses) | Foreign Currency Translation Gains (Losses) | Unrealized Gains (Losses) on Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Beginning balance | $ | (3 | ) | $ | 4 | $ | (16 | ) | $ | (15 | ) | |||||
Other comprehensive income before reclassifications | 1 | — | 31 | 32 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | (3 | ) | (3 | ) | ||||||||||
Net current-period other comprehensive income | 1 | — | 28 | 29 | ||||||||||||
Ending balance | $ | (2 | ) | $ | 4 | $ | 12 | $ | 14 | |||||||
The following table illustrates the changes in the balances of each component of accumulated other comprehensive income for the three months ended September 27, 2013 (in millions): | ||||||||||||||||
Actuarial Pension Gains (Losses) | Foreign Currency Translation Gains (Losses) | Unrealized Gains (Losses) on Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | |||||||||||||
Beginning balance | $ | 11 | $ | — | $ | (46 | ) | $ | (35 | ) | ||||||
Other comprehensive income before reclassifications | — | — | (11 | ) | (11 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | 27 | 27 | ||||||||||||
Net current-period other comprehensive income | — | — | 16 | 16 | ||||||||||||
Ending balance | $ | 11 | $ | — | $ | (30 | ) | $ | (19 | ) | ||||||
Income_per_Common_Share_Tables
Income per Common Share (Tables) | 3 Months Ended | |||||||
Sep. 27, 2013 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Computation of Basic and Diluted Income Per Common Share | The following table illustrates the computation of basic and diluted income per common share (in millions, except per share data): | |||||||
Three Months | ||||||||
Ended | ||||||||
September 27, | September 28, | |||||||
2013 | 2012 | |||||||
Net income | $ | 495 | $ | 519 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 236 | 246 | ||||||
Employee stock options and other | 6 | 6 | ||||||
Diluted | 242 | 252 | ||||||
Income per common share: | ||||||||
Basic | $ | 2.1 | $ | 2.11 | ||||
Diluted | $ | 2.05 | $ | 2.06 | ||||
Anti-dilutive potential common shares excluded* | 1 | 3 | ||||||
* | For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Sep. 27, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 27, 2013, and indicates the fair value hierarchy of the valuation techniques utilized to determine such value (in millions): | |||||||||||||||
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,158 | $ | — | $ | — | $ | 2,158 | ||||||||
Foreign exchange contracts | — | 5 | — | 5 | ||||||||||||
Auction-rate securities | — | — | 14 | 14 | ||||||||||||
Total assets at fair value | $ | 2,158 | $ | 5 | $ | 14 | $ | 2,177 | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 41 | $ | — | $ | 41 | ||||||||
Total liabilities at fair value | $ | — | $ | 41 | $ | — | $ | 41 | ||||||||
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 28, 2013, and indicates the fair value hierarchy of the valuation techniques utilized to determine such value (in millions): | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
Reporting Date Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 1,227 | $ | — | $ | — | $ | 1,227 | ||||||||
Auction-rate securities | — | — | 14 | 14 | ||||||||||||
Total assets at fair value | $ | 1,227 | $ | — | $ | 14 | $ | 1,241 | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 57 | $ | — | $ | 57 | ||||||||
Total liabilities at fair value | $ | — | $ | 57 | $ | — | $ | 57 | ||||||||
Foreign_Exchange_Contracts_Tab
Foreign Exchange Contracts (Tables) | 3 Months Ended | |||||||||||||||||||||||
Sep. 27, 2013 | ||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||
Fair Value and Balance Sheet Location of Contracts | The fair value and balance sheet location of such contracts were as follows (in millions): | |||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
27-Sep-13 | 28-Jun-13 | 27-Sep-13 | 28-Jun-13 | |||||||||||||||||||||
Derivatives Designated as | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | ||||||||||||||||
Hedging Instruments | Location | Value | Location | Value | Location | Value | Location | Value | ||||||||||||||||
Foreign exchange contracts | Other current assets | $ | 5 | Other current assets | $ | — | Accrued expenses | $ | 41 | Accrued expenses | $ | 57 | ||||||||||||
Offsetting Assets and Liabilities [Table Text Block] | The following table presents the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized in the condensed consolidated balance sheet as of September 27, 2013 (in millions): | |||||||||||||||||||||||
Gross Amounts not Offset in the Balance Sheet | ||||||||||||||||||||||||
Derivatives Designated as | Gross Amounts of Recognized Assets/ (Liabilities) | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets/ (Liabilities) Presented in the Balance Sheet | Financial Instruments | Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Financial assets | $ | 11 | $ | (6 | ) | $ | 5 | $ | — | $ | — | $ | 5 | |||||||||||
Financial liabilities | (47 | ) | 6 | (41 | ) | — | — | (41 | ) | |||||||||||||||
Total Derivative Instruments | $ | (36 | ) | $ | — | $ | (36 | ) | $ | — | $ | — | $ | (36 | ) | |||||||||
The following table presents the gross amounts of the Company's derivative instruments, amounts offset due to master netting arrangements with the Company's various counterparties, and the net amounts recognized in the condensed consolidated balance sheet as of June 28, 2013 (in millions): | ||||||||||||||||||||||||
Gross Amounts not Offset in the Balance Sheet | ||||||||||||||||||||||||
Derivatives Designated as | Gross Amounts of Recognized Assets/ (Liabilities) | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets/ (Liabilities) Presented in the Balance Sheet | Financial Instruments | Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||
Financial assets | $ | 10 | $ | (10 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Financial liabilities | (67 | ) | 10 | (57 | ) | — | — | (57 | ) | |||||||||||||||
Total Derivative Instruments | $ | (57 | ) | $ | — | $ | (57 | ) | $ | — | $ | — | $ | (57 | ) | |||||||||
Gains (Losses) of Derivatives in Cash Flow Hedging Relationships | The impact on the condensed consolidated financial statements was as follows (in millions): | |||||||||||||||||||||||
Amount of Gain (Loss) Recognized in | Location of | Amount of Gain (Loss) Reclassified | ||||||||||||||||||||||
Accumulated OCI on Derivatives | Gain (Loss) | From Accumulated OCI into Income | ||||||||||||||||||||||
Reclassified | ||||||||||||||||||||||||
from | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Derivatives in Cash | Three | Three | OCI into | Three | Three | |||||||||||||||||||
Flow Hedging Relationships | Months | Months | Income | Months | Months | |||||||||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Foreign exchange contracts | $ | (11 | ) | $ | 31 | Cost of revenue | $ | (27 | ) | $ | 3 | |||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||
Sep. 27, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock Option Activity | The following table summarizes stock option activity under the Company’s stock option plans (in millions, except per share amounts and remaining contractual lives): | ||||||||||||
Number | Weighted | Weighted | Aggregate | ||||||||||
of | Average | Average | Intrinsic | ||||||||||
Shares | Exercise | Remaining | Value | ||||||||||
Price | Contractual | ||||||||||||
Per | Life | ||||||||||||
Share | (in years) | ||||||||||||
Options outstanding at June 28, 2013 | 11.9 | $ | 29.47 | ||||||||||
Granted | 1.6 | 68.4 | |||||||||||
Assumed in acquisition | 0.4 | 117.41 | |||||||||||
Exercised | (0.7 | ) | 30.14 | ||||||||||
Canceled or expired | (0.1 | ) | 29.93 | ||||||||||
Options outstanding at September 27, 2013 | 13.1 | $ | 36.77 | 4.4 | $ | 380 | |||||||
Exercisable at September 27, 2013 | 5.9 | $ | 32.6 | 3.1 | $ | 205 | |||||||
Vested and expected to vest after September 27, 2013 | 12.9 | $ | 36.51 | 4.4 | $ | 377 | |||||||
Restricted Stock Unit | The following table summarizes RSU activity under the Company's stock plans (in millions, except weighted average grant date fair value): | ||||||||||||
Number | Weighted Average | ||||||||||||
of Shares | Grant-Date | ||||||||||||
Fair Value | |||||||||||||
RSUs outstanding at June 28, 2013 | 3.6 | $ | 35.82 | ||||||||||
Granted | 1.3 | 68.41 | |||||||||||
Assumed in acquisition | 0.2 | 62.73 | |||||||||||
Vested | (0.9 | ) | 29.73 | ||||||||||
RSUs outstanding at September 27, 2013 | 4.2 | $ | 48.39 | ||||||||||
Expected to vest after September 27, 2013 | 4 | $ | 48.13 | ||||||||||
Fair Value of Stock Options Granted | The fair value of stock options granted was estimated using the following weighted average assumptions: | ||||||||||||
Three Months Ended | |||||||||||||
September 27, | September 28, | ||||||||||||
2013 | 2012 | ||||||||||||
Suboptimal exercise factor | 2.06 | 1.9 | |||||||||||
Range of risk-free interest rates | 0.10% to 2.02% | 0.17% to 1.04% | |||||||||||
Range of expected stock price volatility | 0.31 to 0.50 | 0.44 to 0.53 | |||||||||||
Weighted average expected volatility | 0.43 | 0.49 | |||||||||||
Post-vesting termination rate | 3.09% | 2.08% | |||||||||||
Dividend yield | 1.58% | 2.58% | |||||||||||
Fair value | $24.00 | $15.63 |
Pensions_and_Other_Postretirem1
Pensions and Other Post-retirement Benefit Plans (Tables) | 3 Months Ended | |||||||
Sep. 27, 2013 | ||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||
Unfunded Status of Benefit Obligations and Plan Assets | The following table presents the unfunded status of the benefit obligations and Japanese plan assets (in millions): | |||||||
September 27, | June 28, | |||||||
2013 | 2013 | |||||||
Benefit obligation | $ | 238 | $ | 234 | ||||
Fair value of plan assets | (172 | ) | (167 | ) | ||||
Unfunded status | $ | 66 | $ | 67 | ||||
Unfunded Amounts Recognized on Consolidated Balance Sheet | The following table presents the unfunded amounts as recognized on the Company’s condensed consolidated balance sheets (in millions): | |||||||
September 27, | June 28, | |||||||
2013 | 2013 | |||||||
Current liabilities | $ | 1 | $ | 1 | ||||
Non-current liabilities | 65 | 66 | ||||||
Net amount recognized | $ | 66 | $ | 67 | ||||
Acquisition_Tables
Acquisition (Tables) | 3 Months Ended | |||
Sep. 27, 2013 | ||||
Business Combinations [Abstract] | ||||
Purchase Price Allocation | The preliminary purchase price allocation was as follows (in millions): | |||
September 12, | ||||
2013 | ||||
Tangible assets acquired and liabilities assumed: | ||||
Cash | $ | 77 | ||
Accounts receivable | 12 | |||
Inventories | 35 | |||
Other current assets | 14 | |||
Property, plant and equipment | 44 | |||
Other non-current assets | 47 | |||
Accounts payable | (10 | ) | ||
Accrued liabilities | (22 | ) | ||
Other non-current liabilities | (5 | ) | ||
Intangible assets | 58 | |||
Goodwill | 86 | |||
Total | $ | 336 | ||
Supplemental_Financial_Stateme2
Supplemental Financial Statement Data - Inventories; Property, Plant and Equipment; and Other Intangible Assets (Detail) (USD $) | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | ||
Inventories: | ||
Raw materials and component parts | $208 | $167 |
Work-in-process | 579 | 575 |
Finished goods | 457 | 446 |
Total inventories | 1,244 | 1,188 |
Property, plant and equipment: | ||
Property, plant and equipment | 7,764 | 7,616 |
Accumulated depreciation | -4,126 | -3,916 |
Property, plant and equipment, net | 3,638 | 3,700 |
Other intangible assets: | ||
Other intangible assets, gross | 1,011 | 948 |
Accumulated amortization | -395 | -343 |
Other intangible assets, net | $616 | $605 |
Supplemental_Financial_Stateme3
Supplemental Financial Statement Data - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Jun. 28, 2013 |
Supplemental Financial Statement Data [Abstract] | ||
Product warranty, Minimum | 1 year | |
Product warranty, Maximum | 5 years | |
Long-term portion of the warranty accrual classified in other liabilities | $72 | $73 |
Supplemental_Financial_Stateme4
Supplemental Financial Statement Data - Changes in Accrual Warranty (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Product Warranties Disclosures [Abstract] | ||
Warranty accrual, beginning of period | $187 | $260 |
Warranty liabilities assumed as a result of the Acquisition | 3 | 0 |
Charges to operations | 40 | 46 |
Utilization | -49 | -60 |
Changes in estimate related to pre-existing warranties | 14 | -16 |
Warranty accrual, end of period | $195 | $230 |
Supplemental_Financial_Stateme5
Supplemental Financial Statement Data Changes in Balances of Each Component of Accumulated Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 | Jun. 28, 2013 |
Changes in the Balances of Each Component of Accumulated Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | ($35) | ($15) | ($35) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -11 | 32 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 27 | -3 | |
Other Comprehensive Income (Loss), Net of Tax | 16 | 29 | |
Ending Balance | -19 | 14 | -35 |
Accumulated Defined Benefit Plans Adjustment [Member] | |||
Changes in the Balances of Each Component of Accumulated Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 11 | -3 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 1 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | |
Other Comprehensive Income (Loss), Net of Tax | 0 | 1 | |
Ending Balance | 11 | -2 | |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | |||
Changes in the Balances of Each Component of Accumulated Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | -46 | -16 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | -11 | 31 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 27 | -3 | |
Other Comprehensive Income (Loss), Net of Tax | 16 | 28 | |
Ending Balance | -30 | 12 | |
Accumulated Translation Adjustment [Member] | |||
Changes in the Balances of Each Component of Accumulated Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 0 | 4 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | |
Other Comprehensive Income (Loss), Net of Tax | 0 | 0 | |
Ending Balance | $0 | $4 |
Income_per_Common_Share_Comput
Income per Common Share - Computation of Basic and Diluted Income Per Common Share (Detail) (USD $) | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 | ||
Earnings Per Share [Abstract] | ||||
Net income | $495 | $519 | ||
Weighted average shares outstanding: | ||||
Basic | 236 | 246 | ||
Employee stock options and other | 6 | 6 | ||
Diluted | 242 | 252 | ||
Income per common share: | ||||
Basic | $2.10 | $2.11 | ||
Diluted | $2.05 | $2.06 | ||
Anti-dilutive potential common shares excluded* | 1 | [1] | 3 | [1] |
[1] | For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive. |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 3 Months Ended | |
Sep. 27, 2013 | Jun. 28, 2013 | |
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | $230,000,000 | $230,000,000 |
Loan period | 5 years | |
Total unsecured loan under credit facility | 2,800,000,000 | |
Credit facility revolving loan | 500,000,000 | |
Short-term Debt | 500,000,000 | 0 |
Interest rate of borrowing under credit facility | 2.18% | |
2014 | 230,000,000 | |
2015 | 230,000,000 | |
2016 | 230,000,000 | |
Remaining outstanding balance term loan facility | 2,400,000,000 | |
Debt Instrument, Annual Principal Payment | 230,000,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 1,300,000,000 | |
Maturity date of remaining term loan facility | 8-Mar-17 | |
Term loan facility [Member] | ||
Debt Instrument [Line Items] | ||
Total unsecured loan under credit facility | 2,300,000,000 | |
Line of credit facility additional borrowing capacity | $500,000,000 |
Legal_Proceedings_Additional_I
Legal Proceedings - Additional Information (Detail) (USD $) | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 28, 2012 | Jul. 01, 2011 | Oct. 12, 2012 | Jan. 23, 2012 | Nov. 18, 2011 |
Commitments and Contingencies Disclosure [Abstract] | |||||||
Issued interim award against losses | $525 | ||||||
Statutory rate specified as pre-award interest rate | 10.00% | ||||||
Amount of final award adding pre-award interest issued by the arbitrator | 105.4 | ||||||
Amount of total award issued by the arbitrator | 630.4 | ||||||
Amount of total award issued by arbitrator vacated | 630.4 | ||||||
Arbitration Award Provision | 13 | 681 | 0 | 25 | |||
Arbitration Award Reserve | $719 | $706 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Income Tax Disclosure [Line Items] | ||
Income tax provision | $37 | $59 |
Expiration date of tax holiday in Malaysia, Philippines, Singapore and Thailand | from 2014 through 2025 | |
Increase (Decrease) in liability for unrecognized tax benefits | 7 | |
Unrecognized tax benefits | 247 | |
Western Digital Corporation [Member] | ||
Income Tax Disclosure [Line Items] | ||
Estimated impact of proposed IRS adjustments on Pre-tax income | $970 |
Fair_Value_Measurements_Financ
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 27, 2013 | Sep. 28, 2012 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Measurements, Recurring [Member] | ||
Money market funds [Member] | Money market funds [Member] | Money market funds [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Auction-rate securities [Member] | Auction-rate securities [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 1 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 2 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | Fair Value Measurements at Reporting Date Using Level 3 [Member] | |||||
Money market funds [Member] | Money market funds [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Auction-rate securities [Member] | Auction-rate securities [Member] | Money market funds [Member] | Money market funds [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Auction-rate securities [Member] | Auction-rate securities [Member] | Money market funds [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Auction-rate securities [Member] | Auction-rate securities [Member] | ||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||||||||||||||||
Total cash equivalents | $0 | $2,158 | $1,227 | $2,158 | $1,227 | $0 | $0 | $0 | ||||||||||||||||||||||||||
Foreign exchange contracts | 5 | 0 | 5 | 0 | 5 | 0 | ||||||||||||||||||||||||||||
Auction-rate securities | 14 | 14 | 0 | 0 | 0 | 0 | 14 | 14 | ||||||||||||||||||||||||||
Total assets at fair value | 2,177 | 1,241 | 2,158 | 1,227 | 5 | 0 | 14 | 14 | ||||||||||||||||||||||||||
Foreign exchange contracts | -41 | -57 | 41 | 57 | 0 | 0 | 41 | 57 | 0 | 0 | ||||||||||||||||||||||||
Total liabilities at fair value | $41 | $57 | $0 | $0 | $41 | $57 | $0 | $0 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) | 3 Months Ended |
Sep. 27, 2013 | |
Fair Value Disclosures [Abstract] | |
Maturity of auction-rate securities | dates through 2050 |
Foreign_Exchange_Contracts_Add
Foreign Exchange Contracts - Additional Information (Detail) (USD $) | 3 Months Ended | |
Sep. 27, 2013 | Sep. 28, 2012 | |
Foreign Exchange Contracts [Abstract] | ||
Contract maturity dates | Less than 12 months | |
Unrealized gains expected to be reclassified into earnings | $30,000,000 | |
Foreign exchange contracts opened during the period by company | 1,000,000,000 | 769,000,000 |
Foreign exchange contracts closed during the period by company | $1,400,000,000 | $1,100,000,000 |
Foreign_Exchange_Contracts_Fai
Foreign Exchange Contracts - Fair Value and Balance Sheet Location of Contracts (Detail) (USD $) | Sep. 27, 2013 | Sep. 28, 2012 | Sep. 27, 2013 | Jun. 28, 2013 | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | Other current assets [Member] | Other current assets [Member] | Accrued expenses [Member] | Accrued expenses [Member] | ||
Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | |||
Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | Foreign exchange contracts [Member] | |||
Derivatives, Fair Value [Line Items] | ||||||
Derivatives Designated as Hedging Instruments Fair value, Asset Derivatives | $11 | $10 | $5 | $0 | ||
Derivatives Designated as Hedging Instruments Fair Value, Liability Derivatives | ($47) | ($67) | $41 | $57 |
Foreign_Exchange_Contracts_Gai
Foreign Exchange Contracts - Gains (Losses) of Derivatives in Cash Flow Hedging Relationships (Detail) (Foreign exchange contracts [Member], Cash Flow Hedging [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives | ($11) | $31 |
Cost of revenue [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified From Accumulated OCI into Income | ($27) | $3 |
Foreign_Exchange_Contracts_Net
Foreign Exchange Contracts Net Amounts of Foreign Exchange Contract Assets and Liabilities Presented In the Balance Sheet (Details) (USD $) | Sep. 27, 2013 | Sep. 28, 2012 |
In Millions, unless otherwise specified | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | $11 | $10 |
Derivative Asset, Fair Value, Amount Offset | -6 | -10 |
Derivative Assets | 5 | 0 |
Derivative Asset, Financial Instruments Subject To Master Netting Arrangement, Elected Not To Be Offset | 0 | 0 |
Derivative, Collateral, Obligation to Return Cash | 0 | 0 |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 5 | 0 |
Derivative Liability, Fair Value, Gross Liability | -47 | -67 |
Derivative Liability, Fair Value, Amount Offset | 6 | 10 |
Derivative Liabilities | -41 | -57 |
Derivative Liability, Financial Instruments Subject to Master Netting Arrangement, Elected Not to Be Offset | 0 | 0 |
Derivative, Collateral, Right to Reclaim Cash | 0 | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | -41 | -57 |
Derivative, Fair Value, Amount Offset | 0 | 0 |
Derivative Assets | -36 | -57 |
Derivative Assets (Liabilities), at Fair Value, Net | -36 | -57 |
Derivative Financial Instruments Subject To Master Netting Arrangement, Elected Not To Be Offset | 0 | 0 |
Derivative Collateral Obligation To Return Cash or Right To Reclaim Cash | 0 | 0 |
Derivative, Fair Value, Amount Offset Against Collateral, Net | ($36) | ($57) |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Sep. 28, 2012 | Sep. 13, 2012 | 21-May-12 |
Stock Based Compensation [Abstract] | ||||
EmployeeServiceShareBasedCompensationTaxBenefitFromRestrictedStockAmortizationExpense | $4,000,000 | $4,000,000 | ||
Expenses on stock-based compensation | 21,000,000 | 25,000,000 | ||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 5,000,000 | 7,000,000 | ||
Total compensation cost related to unvested stock options and ESPP rights issued | 120,000,000 | |||
Weighted average service period | 2 years 4 months | |||
Expense related to the vesting of restricted stock unit awards | 21,000,000 | 14,000,000 | ||
Unamortized fair value of all unvested restricted stock unit awards | 144,000,000 | |||
Weighted average vesting period | 2 years | |||
Compensation cost for cash-settled stock appreciation rights | 4,000,000 | 12,000,000 | ||
EmployeeServiceShareBasedCompensationTaxBenefitFromStockAppreciationRightsCompensationExpense | 1,000,000 | 3,000,000 | ||
Total liability related to SARs | 48,000,000 | |||
Total compensation cost related to unvested SARs | 8,000,000 | |||
Total compensation cost, weighted average service period | 7 months | |||
Options outstanding to purchase shares with exercise price below company stock price | 11.2 | |||
Options outstanding to purchase shares with exercise price below company stock price, intrinsic value | 380,000,000 | |||
Aggregate intrinsic value of options exercised under the Company's stock option plan | 27,000,000 | 55,000,000 | ||
Grant-date fair value of the shares underlying the restricted stock awards | 88,000,000 | |||
Forfeiture rate of restricted stock unit valuation assumption | 3.30% | |||
Stock Appreciation Right outstanding, weighted average exercise price | $7.89 | |||
Number of assumed SARs outstanding | 1 | |||
Weighted average expected term of the Company's stock options | 5 years | 4 years | ||
StockRepurchaseProgramAdditionalAmountAuthorized | 1,500,000,000 | 1,500,000,000 | ||
Treasury Stock, Shares, Acquired | 2.3 | |||
Treasury Stock, Value, Acquired, Cost Method | 150,000,000 | |||
RemainingAmountForRepurchaseUnderShareRepurchaseProgram | 1,800,000,000 | |||
Cash dividend | $0.25 | |||
Payment of dividends | $59,000,000 | $0 |
StockBased_Compensation_Stock_
Stock-Based Compensation - Stock Option Activity (Detail) (USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 27, 2013 |
Stock Option Activity [Abstract] | |
Options outstanding, Beginning Balance, Numbers of Shares | 11,900,000 |
Granted, Number of Shares | 1,600,000 |
Share Based Compensation Arrangement By Share Based Payment Award Options Assumed In Period | 400,000 |
Exercised, Number of Shares | -700,000 |
Canceled or expired, Number of Shares | -100,000 |
Options outstanding, Ending Balance, Numbers of Shares | 13,100,000 |
Exercisable at September 27, 2013 | 5,900,000 |
Vested and expected to vest after September 27, 2013 | 12,900,000 |
Options outstanding, Beginning Balance, Weighted Average Exercise Price Per Share | $29.47 |
Granted, Weighted Average Exercise Price Per Share | $68.40 |
Share Based Compensation Options Assumed Weighted Average Exercise Price | $117.41 |
Exercised, Weighted Average Exercise Price Per Share | $30.14 |
Canceled or expired, Weighted Average Exercise Price Per Share | $29.93 |
Options outstanding, Ending Balance, Weighted Average Exercise Price Per Share | $36.77 |
Exercisable at September 27, 2013, Weighted Average Exercise Price Per Share | $32.60 |
Vested and expected to vest after September 27, 2013, Weighted Average Exercise Price Per Share | $36.51 |
Options outstanding at September 27, 2013, Weighted Average Remaining Contractual Life (in years) | 4 years 4 months 26 days |
Exercisable at September 27, 2013, Weighted Average Remaining Contractual Life (in years) | 3 years 1 month 6 days |
Vested and expected to vest after September 27, 2013, Weighted Average Remaining Contractual Life (in years) | 4 years 4 months 24 days |
Options outstanding at September 27, 2013, Aggregate Intrinsic Value | $380 |
Exercisable at September 27, 2013, Aggregate Intrinsic Value | 205 |
Vested and expected to vest after September 27, 2013, Aggregate Intrinsic Value | $377 |
StockBased_Compensation_Restri
Stock-Based Compensation - Restricted Stock Units (Detail) (USD $) | 3 Months Ended |
Sep. 27, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Numbers of Shares, Beginning Balance | 3,600,000 |
Restricted stock, Number of share granted | 1,300,000 |
Share Based Compensation Arrangement by Share Based Payment Award Equity Instruments Other than Options Assumed in Period | 200,000 |
Restricted stock, Number of share vested | -900,000 |
Numbers of Shares, Ending Balance | 4,200,000 |
Number of share, Expected to vest after September 27, 2013 | 4,000,000 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Grant Date Fair Value Per Share, Beginning Balance | 35.82 |
Restricted stock, Granted, Weighted Average Grant Date Fair Value Per Share | 68.41 |
Share Based Compensation Arrangement by Share Based Payment Award Equity Instruments Other Than Options Assumed in Period Weighted Average Grant Date Fair Value | 62.73 |
Restricted stock, Vested, Weighted Average Grant Date Fair Value Per Share | 29.73 |
Weighted Average Grant Date Fair Value Per Share, Ending Balance | 48.39 |
Weighted Average Grant Date Fair Value Per Share, Expected to vest after September 27, 2013 | 48.13 |
StockBased_Compensation_Fair_V
Stock-Based Compensation - Fair Value of Stock Options Granted (Detail) (USD $) | 3 Months Ended | |
Sep. 27, 2013 | Sep. 28, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Suboptimal exercise factor | 2.06 | 1.9 |
Risk-free interest rates, minimum | 0.10% | 0.17% |
Risk-free interest rates, maximum | 2.02% | 1.04% |
Expected stock price volatility, minimum | 0.31% | 0.44% |
Expected stock price volatility, maximum | 0.50% | 0.53% |
Weighted average expected volatility | 0.43% | 0.49% |
Post-vesting termination rate | 3.09% | 2.08% |
Dividend yield | 1.58% | 0.03% |
Fair value | $24 | $15.63 |
Pensions_and_Other_Postretirem2
Pensions and Other Post-retirement Benefit Plans - Additional Information (Detail) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 27, 2013 |
Defined Benefit Plan Disclosure [Line Items] | |
Expected long-term rate of return on plan assets | 3.50% |
Japan pension benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution for pension plan | 13 |
Pensions_and_Other_Postretirem3
Pensions and Other Post-retirement Benefit Plans - Unfunded Status of Benefit Obligations and Plan Assets (Detail) (Japan pension benefits [Member], USD $) | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | ||
Japan pension benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligation | $238 | $234 |
Fair value of plan assets | -172 | -167 |
Unfunded status | $66 | $67 |
Pensions_and_Other_Postretirem4
Pensions and Other Post-retirement Benefit Plans - Unfunded Amounts Recognized on Consolidated Balance Sheet (Detail) (Japan pension benefits [Member], USD $) | Sep. 27, 2013 | Jun. 28, 2013 |
In Millions, unless otherwise specified | ||
Japan pension benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current liabilities | $1 | $1 |
Non-current liabilities | 65 | 66 |
Net amount recognized | $66 | $67 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (sTec [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 27, 2013 | Sep. 12, 2013 |
sTec [Member] | ||
Business Acquisition [Line Items] | ||
Purchase price of the Acquisition | $336 | |
Business Acquisition, Cost of Acquired Entity, Cash Paid | 325 | |
Fair Value Of Stock Options And Restricted Stock Based Awards\Assumed | 11 | |
Value allocated to goodwill | 86 | |
Period of measurement | 12 months | |
Acquired Indefinite-lived Intangible Asset, Amount | 15 | |
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets | 43 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 6 months | |
Goodwill recognized | $86 |
Acquisitions_sTec_Purchase_Pri
Acquisitions sTec Purchase Price Allocation (Details) (sTec [Member], USD $) | Sep. 12, 2013 |
In Millions, unless otherwise specified | |
sTec [Member] | |
Business Acquisition [Line Items] | |
Cash | $77 |
Accounts receivable | 12 |
Inventories | 35 |
Other current assets | 14 |
Property, plant and equipment | 44 |
Other non-current assets | 47 |
Accounts payable | -10 |
Accrued liabilities | -22 |
Other non-current liabilities | -5 |
Intangible assets | 58 |
Goodwill | 86 |
Total | $336 |
Employee_Termination_Benefits_1
Employee Termination Benefits and Other Charges - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Jun. 28, 2013 | Sep. 27, 2013 | Sep. 27, 2013 | Sep. 27, 2013 |
Contract Termination [Member] | Employee Termination Benefits [Member] | |||
Restructuring Cost and Reserve [Line Items] | ||||
Severance And Other Charges Reserve Settled With Cash | ($9) | ($18) | ||
Contract Terminations And Other Exit Costs | 15 | |||
Employee Termination Benefits Charge | 109 | |||
Asset Impairment Charge | 14 | |||
Severance And Other Charges Reserve Ending Balance | 46 | 19 | ||
Charges to realign production | $138 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent Event [Member], USD $) | Oct. 17, 2013 |
In Millions, unless otherwise specified | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Business Acquisition, Cost of Acquired Entity, Purchase Price | $685 |