Cover Page
Cover Page - shares | 3 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-8703 | |
Entity Registrant Name | WESTERN DIGITAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0956711 | |
Entity Address, Address Line One | 5601 Great Oaks Parkway | |
Entity Address, City or Town | San Jose, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95119 | |
City Area Code | 408 | |
Local Phone Number | 717-6000 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | |
Trading Symbol | WDC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 317,650,295 | |
Entity Central Index Key | 0000106040 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,049 | $ 2,327 |
Accounts receivable, net | 2,422 | 2,804 |
Inventories | 3,862 | 3,638 |
Other current assets | 738 | 684 |
Total current assets | 9,071 | 9,453 |
Non-current assets: | ||
Property, plant and equipment, net | 3,718 | 3,670 |
Notes receivable and investments in Flash Ventures | 1,219 | 1,396 |
Goodwill | 10,037 | 10,041 |
Other intangible assets, net | 174 | 213 |
Other non-current assets | 1,467 | 1,486 |
Total assets | 25,686 | 26,259 |
Current liabilities: | ||
Accounts payable | 1,686 | 1,902 |
Accounts payable to related parties | 295 | 320 |
Accrued expenses | 1,592 | 1,636 |
Income taxes payable | 986 | 869 |
Accrued compensation | 407 | 510 |
Total current liabilities | 4,966 | 5,237 |
Non-current liabilities: | ||
Long-term debt | 7,071 | 7,022 |
Other liabilities | 1,542 | 1,779 |
Total liabilities | 13,579 | 14,038 |
Commitments and contingencies (Notes 10, 11, 13 and 16) | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value; authorized — 450 shares; issued — 318 shares and 315 shares, respectively; outstanding — 318 shares and 315 shares, respectively | 3 | 3 |
Additional paid-in capital | 3,641 | 3,733 |
Accumulated other comprehensive loss | (694) | (554) |
Retained earnings | 9,157 | 9,039 |
Total shareholders’ equity | 12,107 | 12,221 |
Total liabilities and shareholders’ equity | $ 25,686 | $ 26,259 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Jul. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 318,000,000 | 315,000,000 |
Common stock, shares outstanding (in shares) | 318,000,000 | 315,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Income Statement [Abstract] | ||
Revenue, net | $ 3,736 | $ 5,051 |
Cost of revenue | 2,755 | 3,386 |
Gross profit | 981 | 1,665 |
Operating expenses: | ||
Research and development | 552 | 578 |
Selling, general and administrative | 247 | 291 |
Employee termination, asset impairment, and other charges | 24 | 18 |
Total operating expenses | 823 | 887 |
Operating income | 158 | 778 |
Interest and other income (expense): | ||
Interest income | 2 | 2 |
Interest expense | (70) | (78) |
Other income (expense), net | (6) | 2 |
Total interest and other expense, net | (74) | (74) |
Income before taxes | 84 | 704 |
Income tax expense | 57 | 94 |
Net income | $ 27 | $ 610 |
Income per common share: | ||
Basic (in dollars per share) | $ 0.09 | $ 1.97 |
Diluted (in dollars per share) | $ 0.08 | $ 1.93 |
Weighted average shares outstanding: | ||
Basic (in shares) | 316 | 310 |
Diluted (in shares) | 319 | 316 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 27 | $ 610 |
Other comprehensive income (loss), before tax: | ||
Actuarial pension gain | 0 | 1 |
Foreign currency translation adjustment | (80) | 4 |
Net unrealized gain (loss) on derivative contracts and available-for-sale securities | (76) | 33 |
Total other comprehensive income (loss), before tax | (156) | 38 |
Income tax benefit (expense) related to items of other comprehensive income (loss), before tax | 16 | (8) |
Other comprehensive income (loss), net of tax | (140) | 30 |
Total comprehensive income (loss) | $ (113) | $ 640 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Cash flows from operating activities | ||
Net income | $ 27 | $ 610 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 216 | 250 |
Stock-based compensation | 86 | 76 |
Deferred income taxes | (42) | 27 |
Gain on disposal of assets | 1 | 0 |
Amortization of debt issuance costs and discounts | 3 | 10 |
Other non-cash operating activities, net | 44 | (12) |
Changes in: | ||
Accounts receivable, net | 382 | (188) |
Inventories | (224) | 73 |
Accounts payable | (125) | (41) |
Accounts payable to related parties | (25) | (20) |
Accrued expenses | (44) | (1) |
Income taxes payable | 117 | (35) |
Accrued compensation | (104) | (67) |
Other assets and liabilities, net | (306) | (161) |
Net cash provided by operating activities | 6 | 521 |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (320) | (245) |
Notes receivable issuances to Flash Ventures | (84) | (165) |
Notes receivable proceeds from Flash Ventures | 183 | 113 |
Strategic investments and other, net | (3) | (15) |
Net cash used in investing activities | (224) | (312) |
Cash flows from financing activities | ||
Issuance of stock under employee stock plans | 0 | 2 |
Taxes paid on vested stock awards under employee stock plans | (50) | (78) |
Repayment of debt | 0 | (213) |
Repayments of revolving credit facility | (300) | 0 |
Proceeds from revolving credit facility | 300 | 0 |
Net cash used in financing activities | (50) | (289) |
Effect of exchange rate changes on cash | (10) | 0 |
Net decrease in cash and cash equivalents | (278) | (80) |
Cash and cash equivalents, beginning of year | 2,327 | 3,370 |
Cash and cash equivalents, end of period | 2,049 | 3,290 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 134 | 221 |
Cash paid for interest | $ 106 | $ 99 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment |
Common stock, beginning balance (in shares) at Jul. 02, 2021 | 312 | ||||||||
Beginning balance at Jul. 02, 2021 | $ 10,721 | $ 3 | $ (232) | $ 3,608 | $ (197) | $ 7,539 | |||
Treasury stock, beginning balance (in shares) at Jul. 02, 2021 | (4) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 610 | 610 | |||||||
Employee stock plans (in shares) | 3 | ||||||||
Employee stock plans | (76) | $ 207 | (283) | ||||||
Stock-based compensation | 76 | 76 | |||||||
Actuarial pension gain | 1 | 1 | |||||||
Foreign currency translation adjustment | 4 | 4 | |||||||
Net unrealized gain (loss) on derivative contracts | 25 | 25 | |||||||
Common stock, ending balance (in shares) at Oct. 01, 2021 | 312 | ||||||||
Ending balance at Oct. 01, 2021 | $ 11,361 | $ 3 | $ (25) | 3,401 | (167) | 8,149 | |||
Treasury stock, ending balance (in shares) at Oct. 01, 2021 | (1) | ||||||||
Common stock, beginning balance (in shares) at Jul. 01, 2022 | 315 | 315 | |||||||
Beginning balance at Jul. 01, 2022 | $ 12,221 | $ (37) | $ 3 | $ 0 | 3,733 | $ (128) | (554) | 9,039 | $ 91 |
Treasury stock, beginning balance (in shares) at Jul. 01, 2022 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 27 | 27 | |||||||
Employee stock plans (in shares) | 3 | ||||||||
Employee stock plans | (50) | (50) | |||||||
Stock-based compensation | 86 | 86 | |||||||
Foreign currency translation adjustment | (80) | (80) | |||||||
Net unrealized gain (loss) on derivative contracts | $ (60) | (60) | |||||||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 318 | 318 | |||||||
Ending balance at Sep. 30, 2022 | $ 12,107 | $ 3 | $ 0 | $ 3,641 | $ (694) | $ 9,157 | |||
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Western Digital Corporation (“Western Digital” or the “Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions based on both flash-based products (“Flash”) and hard disk drives (“HDD”) technologies. With dedicated Flash and HDD business units driving advancements in memory technologies, the Company creates and drives innovations needed to help customers capture, preserve, access, and transform an ever-increasing diversity of data. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Basis of Presentation, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended July 1, 2022. In the opinion of management, all adjustments necessary to fairly state the 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 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 July 1, 2022. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Fiscal Year The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2023, which ends on June 30, 2023, and 2022, which ended on July 1, 2022, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks. Segment Reporting The Company manufactures, markets, and sells data storage devices and solutions in the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. The Company manages and reports under two reportable segments: Flash and HDD. The Company’s Chief Operating Decision Maker (“CODM”) evaluates performance of the Company and makes decisions regarding allocation of resources based on each operating segment’s net revenue and gross margin. Because of the integrated nature of the Company’s production and distribution activities, separate segment asset measures are not available or reviewed by the CODM to evaluate the performance of or to allocate resources to the segments. Use of Estimates 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 with consideration given to the potential impacts of current macroeconomic conditions. However, actual results could differ materially from these estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with prior standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. The Company adopted the new standard effective July 2, 2022, the first day of the year ending June 30, 2023, using the modified retrospective method. On the date of adoption, the Company recorded a reduction in Additional Paid-In Capital of $128 million, a reduction of unamortized debt discount of $48 million, a reduction of deferred income tax liabilities of $11 million, and an increase to retained earnings of $91 million for the after-tax impact of previously recognized amortization of the debt discount associated with the Co mpany’s convertible senior notes. In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). ASU 2021-10 increases the transparency of government assistance received by requiring most business entities to disclose information about government assistance received, including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of 2023. The Company adopted this ASU on July 2, 2022, the first day of the year ending June 30, 2023, and the adoption did not have a material impact on its Condensed Consolidated Financial Statements. |
Business Segments, Geographic I
Business Segments, Geographic Information, and Concentrations of Risk | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segments, Geographic Information, and Concentrations of Risk | Business Segments, Geographic Information, and Concentrations of Risk The following table summarizes the operating performance of the Company’s reportable segments: Three Months Ended September 30, October 1, (in millions, except percentages) Net revenue: Flash $ 1,722 $ 2,490 HDD 2,014 2,561 Total net revenue $ 3,736 $ 5,051 Gross profit: Flash $ 422 $ 921 HDD 574 792 Total gross profit for segments 996 1,713 Unallocated corporate items: Stock-based compensation expense (14) (9) Amortization of acquired intangible assets (1) (39) Total unallocated corporate items (15) (48) Consolidated gross profit $ 981 $ 1,665 Gross margin: Flash 24.5 % 37.0 % HDD 28.5 % 30.9 % Consolidated gross margin 26.3 % 33.0 % Disaggregated Revenue The Company’s broad portfolio of technology and products address multiple end markets. Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and end customers, which the Company believes it is uniquely positioned to address as the only provider of both Flash and HDD. Through the Client end market, the Company provides its original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash and hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by the Company’s broad range of retail and other end-user products, which capitalize on the strength of the Company’s product brand recognition and vast points of presence around the world. The Company’s disaggregated revenue information is as follows: Three Months Ended September 30, October 1, (in millions) Revenue by End Market Cloud $ 1,829 $ 2,225 Client 1,229 1,853 Consumer 678 973 Total Revenue $ 3,736 $ 5,051 Revenue by Geography Asia $ 1,686 $ 2,675 Americas 1,423 1,614 Europe, Middle East and Africa 627 762 Total Revenue $ 3,736 $ 5,051 The Company’s top 10 customers accounted for 52% of its net revenue for the three months ended September 30, 2022, and 43% of its net revenue for the three months ended October 1, 2021. For the three months ended September 30, 2022 and October 1, 2021, no single customer accounted for 10% or more of the Company’s net revenue. Goodwill The following table provides a summary of goodwill activity for the period: Flash HDD Total (in millions) Balance at July 1, 2022 $ 5,718 $ 4,323 $ 10,041 Foreign currency translation adjustment (2) (2) (4) Balance at September 30, 2022 $ 5,716 $ 4,321 $ 10,037 Goodwill is not amortized. Instead, it is tested for impairment annually as of the beginning of the Company’s fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company uses qualitative factors to determine whether goodwill is more-likely-than-not impaired and whether a quantitative test for impairment is considered necessary. If the Company concludes from the qualitative assessment that goodwill is more likely than not impaired, the Company is required to perform a quantitative approach to determine the amount of impairment As of September 30, 2022, management identified several factors, including changes in macroeconomic conditions and a recent decline of the Company’s market stock price, that warranted a quantitative analysis of impairment for both the Flash and HDD reporting units as of that date. The fair value of each operating segment was based on a weighting of two valuation methodologies: an income approach and a market approach. The income approach was based on the present value of the projected discounted cash flows (“DCF”) expected to be generated by the operating segment. Those projections required the use of significant estimates and assumptions specific to the reporting unit as well as those based on general economic conditions, which included, among other factors, revenue growth rates, gross margins, operating costs, capital expenditures, assumed tax rates and other assumptions deemed reasonable by management. The present value was based on applying a weighted average cost of capital (“WACC”) which considered long-term interest rates and cost of equity based on the Company’s risk profile. The market approach was based on a guideline company method, which analyzed market multiples of revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for a group of comparable public companies. We reconciled the aggregated estimated fair value of both operating segments to the Company’s market capitalization, including consideration of a control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company. As of September 30, 2022, the fair value derived from those valuation methodologies exceeded the carrying value by 7% and 32% for Flash and HDD, respectively, and no impairment was recognized. The Company is required to use judgment when applying the goodwill impairment test, including the assignment of assets and liabilities to reporting units, and determination of the fair value of each reporting unit. In addition, the estimates used to determine the fair value of reporting units may change based on future changes in the Company’s results of operations, macroeconomic conditions or other factors. Changes in these estimates could materially affect the Company’s assessment of the fair value and goodwill impairment. In addition, if negative macroeconomic conditions continue or worsen or the Company’s stock price decreases for a sustained period of time, goodwill could become impaired, which could result in an impairment charge and materially adversely affect the Company’s financial condition results of operations. |
Revenues
Revenues | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied. The Company did not have any contract assets as of either September 30, 2022 or July 1, 2022 . Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under professional service and support and maintenance contracts. Contract liabilities as of September 30, 2022 and July 1, 2022 and changes in contract liabilities for the three months ended September 30, 2022 and October 1, 2021 were not material. The Company incurs sales commissions and other direct incremental costs to obtain sales contracts. The Company has applied the practical expedient to recognize the direct incremental costs of obtaining contracts as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to Selling, general and administrative expenses. The Company had no direct incremental costs to obtain contracts that have an expected benefit of greater than one year. The Company applies the practical expedients and does not disclose transaction price allocated to the remaining performance obligations for (i) arrangements that have an original expected duration of one year or less, which mainly consist of the support and maintenance contracts, and (ii) variable consideration amounts for sale-based or usage-based royalties for intellectual property (“IP”) license arrangements, which typically range longer than one year. Remaining performance obligations are mainly attributed to right-to-access patent license arrangements, professional service arrangements and customer support and service contracts which will be recognized over the remaining contract period. The transaction price allocated to the remaining performance obligations as of September 30, 2022 was $26 million , which is mainly attributable to the functional IP license and professional service arrangements. The Company expects to recognize substantially all of this amount as revenue within the next twelve months. |
Supplemental Financial Statemen
Supplemental Financial Statement Data | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Statement Data | Supplemental Financial Statement Data Accounts receivable, net From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third party purchasers in exchange for cash. During the three months ended September 30, 2022, the Company sold trade accounts receivable aggregating $291 million. The Company did not sell any trade accounts receivable during the three months ended October 1, 2021. The discounts on the trade accounts receivable sold were not material and were recorded within Other income (expense), net in the Condensed Consolidated Statements of Operations. As of September 30, 2022 and July 1, 2022, the amount of factored receivables that remained outstanding was $291 million and $300 million, respectively. Inventories September 30, July 1, (in millions) Inventories: Raw materials and component parts $ 1,809 $ 1,603 Work-in-process 1,130 1,162 Finished goods 923 873 Total inventories $ 3,862 $ 3,638 Property, plant and equipment, net September 30, July 1, (in millions) Property, plant and equipment: Land $ 269 $ 269 Buildings and improvements 1,945 1,920 Machinery and equipment 8,734 8,642 Computer equipment and software 499 494 Furniture and fixtures 54 54 Construction-in-process 642 591 Property, plant and equipment, gross 12,143 11,970 Accumulated depreciation (8,425) (8,300) Property, plant and equipment, net $ 3,718 $ 3,670 Other Intangible assets September 30, July 1, (in millions) Other Intangible assets: Finite-lived intangible assets $ 5,715 $ 5,493 In-process research and development 80 80 Accumulated amortization (5,621) (5,360) Other Intangible assets, net $ 174 $ 213 As part of prior acquisitions, the Company recorded at the time of the acquisition acquired in-process research and development (“IPR&D”) for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life. Product warranty liability Changes in the warranty accrual were as follows: Three Months Ended September 30, October 1, (in millions) Warranty accrual, beginning of period $ 345 $ 363 Charges to operations 32 40 Utilization (34) (23) Changes in estimate related to pre-existing warranties (3) (10) Warranty accrual, end of period $ 340 $ 370 The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below: September 30, July 1, (in millions) Warranty accrual: Current portion (included in Accrued expenses) $ 144 $ 162 Long-term portion (included in Other liabilities) 196 183 Total warranty accrual $ 340 $ 345 Other liabilities September 30, July 1, (in millions) Other liabilities: Non-current net tax payable $ 460 $ 659 Non-current portion of unrecognized tax benefits 453 477 Other non-current liabilities 629 643 Total other liabilities $ 1,542 $ 1,779 Accumulated other comprehensive loss Accumulated other comprehensive loss (“AOCI”), net of tax refers to expenses, gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The following table illustrates the changes in the balances of each component of AOCI: Actuarial Pension Losses Foreign Currency Translation Adjustment Unrealized Losses on Derivative Contracts Total Accumulated Comprehensive Loss (in millions) Balance at July 1, 2022 $ (11) $ (277) $ (266) $ (554) Other comprehensive loss before reclassifications — (80) (140) (220) Amounts reclassified from accumulated other comprehensive loss — — 64 64 Income tax benefit related to items of other comprehensive loss — — 16 16 Net current-period other comprehensive loss — (80) (60) (140) Balance at September 30, 2022 $ (11) $ (357) $ (326) $ (694) During the three months ended September 30, 2022, the amounts reclassified out of AOCI were losses related to foreign exchange contracts and interest rate swap contracts. Losses reclassified out of AOCI related to foreign exchange contracts were $62 million for the three months ended September 30, 2022 that were substantially charged to Cost of revenue in the Condensed Consolidated Statements of Operations. Losses reclassified out of AOCI related to interest rate swap contracts were $2 million for the three months ended September 30, 2022 that were charged to Interest expense in the Condensed Consolidated Statements of Operations. |
Fair Value Measurements and Inv
Fair Value Measurements and Investments | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Investments | Fair Value Measurements and Investments Financial Instruments Carried at Fair Value 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 tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and July 1, 2022, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values: September 30, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 322 $ — $ — $ 322 Foreign exchange contracts — 48 — 48 Interest rate swap contracts — 11 — 11 Total assets at fair value $ 322 $ 59 $ — $ 381 Liabilities: Foreign exchange contracts $ — $ 329 $ — $ 329 Total liabilities at fair value $ — $ 329 $ — $ 329 July 1, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 266 $ — $ — $ 266 Foreign exchange contracts — 61 — 61 Interest rate swap contracts — 3 — 3 Total assets at fair value $ 266 $ 64 $ — $ 330 Liabilities: Foreign exchange contracts $ — $ 316 $ — $ 316 Total liabilities at fair value $ — $ 316 $ — $ 316 During the periods presented, the Company had no transfers of financial assets and liabilities between levels and there were no changes in valuation techniques or the inputs used in the fair value measurement. Financial Instruments Not Carried at Fair Value For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the first quarter of 2023 and the fourth quarter of 2022, respectively. September 30, 2022 July 1, 2022 Carrying Fair Carrying Fair (in millions) 1.50% convertible notes due 2024 $ 1,097 $ 1,047 $ 1,048 $ 1,040 4.75% senior unsecured notes due 2026 2,291 2,134 2,291 2,205 Variable interest rate Term Loan A-2 maturing 2027 2,693 2,634 2,693 2,621 2.85% senior unsecured notes due 2029 495 389 495 412 3.10% senior unsecured notes due 2032 495 342 495 389 Total $ 7,071 $ 6,546 $ 7,022 $ 6,667 |
Derivatives Instruments and Hed
Derivatives Instruments and Hedging Activities | 3 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of September 30, 2022, the Company had outstanding foreign exchange forward contracts that were designated as either cash flow hedges or non-designated hedges. Substantially all of the contract maturity dates of these foreign exchange forward contracts do not exceed 12 months. In addition, the Company had outstanding pay-fixed interest rate swaps that were designated as cash flow hedges of variable rate interest payments through February 2023, on a portion of its term loans. Changes in fair values of the non-designated foreign exchange contracts are recognized in Other income (expense), net and are largely offset by corresponding changes in the fair values of the foreign currency denominated monetary assets and liabilities. For each of the three months ended September 30, 2022 and October 1, 2021, total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to the Company’s Condensed Consolidated Financial Statements. Unrealized gains or losses on designated cash flow hedges are recognized in AOCI. For more information regarding cash flow hedges, see Part I, Item 1, Note 5, Supplemental Financial Statement Data - Accumulated other comprehensive loss , of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Netting Arrangements Under certain provisions and conditions within agreements with counterparties to the Company’s foreign exchange forward contracts, subject to applicable requirements, the Company has the right of offset associated with the Company’s foreign exchange forward contracts and is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. As of September 30, 2022 and July 1, 2022, the effect of rights of offset was not material and the Company did not offset or net the fair value amounts of derivative instruments in its Condensed Consolidated Balance Sheets. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: September 30, July 1, (in millions) 1.50% convertible notes due 2024 $ 1,100 $ 1,100 4.75% senior unsecured notes due 2026 2,300 2,300 Variable interest rate Term Loan A-2 maturing 2027 2,700 2,700 2.85% senior unsecured notes due 2029 500 500 3.10% senior unsecured notes due 2032 500 500 Total debt 7,100 7,100 Issuance costs and debt discounts (29) (78) Long-term debt $ 7,071 $ 7,022 During the three months ended September 30, 2022, the Company drew and repaid $300 million principal amount under its $2.25 billion revolving credit facility maturing in January 2027 (the “2027 Revolving Credit Facility”). The terms of the credit agreement governing the 2027 Revolving Credit Facility and Term Loan A-2 requires the Company to comply with a leverage ratio financial covenant. As of September 30, 2022, the Company was in compliance with this financial covenant. As described in Note 2, Recent Accounting Pronouncements the Company adopted ASU 2020-06 effective July 2, 2022, using a modified retrospective method, which resulted in the elimination of the originally recorded debt discount associated with the conversion feature on its 1.50% convertible notes due 2024. |
Pensions and Other Post-Retirem
Pensions and Other Post-Retirement Benefit Plans | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pensions and Other Post-Retirement Benefit Plans | Pension and Other Post-Retirement Benefit Plans The Company has pension and other post-retirement benefit plans in various countries. The Company’s principal pension plans are in Japan, Thailand and the Philippines. All pension and other post-retirement benefit plans outside of the Company’s Japan, Thailand and the Philippines defined benefit pension plans (the “Pension Plans”) are immaterial to the Condensed Consolidated Financial Statements. The expected long-term rate of return on the Pension Plans assets is 2.5%. Obligations and Funded Status The following table presents the unfunded status of the benefit obligations for the Pension Plans: September 30, July 1, (in millions) Benefit obligation at end of period $ 275 $ 294 Fair value of plan assets at end of period 177 189 Unfunded status $ 98 $ 105 The following table presents the unfunded amounts related to the Pension Plans as recognized on the Company’s Condensed Consolidated Balance Sheets: September 30, July 1, (in millions) Current liabilities $ 1 $ 1 Non-current liabilities 97 104 Net amount recognized $ 98 $ 105 |
Related Parties and Related Com
Related Parties and Related Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Related Parties and Related Commitments and Contingencies | Related Parties and Related Commitments and Contingencies Flash Ventures The Company’s business ventures with Kioxia Corporation (“Kioxia”) consist of three separate legal entities: Flash Partners Ltd. (“Flash Partners”), Flash Alliance Ltd. (“Flash Alliance”), and Flash Forward Ltd. (“Flash Forward”), collectively referred to as “Flash Ventures”. The following table presents the notes receivable from, and equity investments in, Flash Ventures: September 30, July 1, (in millions) Notes receivable, Flash Partners $ 6 $ 27 Notes receivable, Flash Alliance 62 55 Notes receivable, Flash Forward 658 793 Investment in Flash Partners 158 166 Investment in Flash Alliance 229 243 Investment in Flash Forward 106 112 Total notes receivable and investments in Flash Ventures $ 1,219 $ 1,396 During the three months ended September 30, 2022 and October 1, 2021, the Company made net payments to Flash Ventures of $1.0 billion, and $1.2 billion, respectively, for purchased flash-based memory wafers and net loans. The Company makes, or will make, loans to Flash Ventures to fund equipment investments for new process technologies and additional wafer capacity. The Company aggregates its Flash Ventures’ notes receivable into one class of financing receivables due to the similar ownership interest and common structure in each Flash Venture entity. For all reporting periods presented, no loans were past due and no loan impairments were recorded. The Company’s notes receivable from each Flash Ventures entity, denominated in Japanese yen, are secured by equipment owned by that Flash Ventures entity. As of September 30, 2022 and July 1, 2022, the Company had account payable balances due to Flash Ventures of $295 million and $320 million, respectively. The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S. dollar exchange rate at September 30, 2022, is presented below. Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar. September 30, (in millions) Notes receivable $ 726 Equity investments 493 Operating lease guarantees 1,684 Inventory and prepayments 1,022 Maximum estimable loss exposure $ 3,925 The Company is obligated to pay for variable costs incurred in producing its share of Flash Ventures’ flash-based memory wafer supply, based on its three-month forecast, which generally equals 50% of Flash Ventures’ output. In addition, the Company is obligated to pay for half of Flash Ventures’ fixed costs regardless of the output the Company chooses to purchase. The Company is not able to estimate its total wafer purchase commitment obligation beyond its rolling three-month purchase commitment because the price is determined by reference to the future cost of producing the semiconductor wafers. In addition, the Company is committed to fund 49.9% to 50.0% of each Flash Ventures entity’s capital investments to the extent that each Flash Ventures entity’s operating cash flow is insufficient to fund these investments. In January 2022, the Company entered into additional agreements regarding Flash Ventures’ investment in a new wafer fabrication facility currently under construction in Yokkaichi, Japan, referred to as “Y7”. The primary purpose of Y7 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes. The Company is committed to pay, among other items, future building depreciation prepayments aggregating approximately $203 million as follows: $182 million for the remaining nine months of 2023 and $21 million in 2024, to be credited against future wafer charges. Inventory Purchase Commitments with Flash Ventures. Purchase orders placed under Flash Ventures for up to three months are binding and cannot be canceled. Research and Development Activities. The Company participates in common research and development (“R&D”) activities with Kioxia and is contractually committed to a minimum funding level. R&D commitments are immaterial to the Condensed Consolidated Financial Statements. Off-Balance Sheet Liabilities Flash Ventures sells to and leases back from a consortium of financial institutions a portion of its tools and has entered into equipment lease agreements of which the Company guarantees half or all of the outstanding obligations under each lease agreement. The lease agreements are subject to customary covenants and cancellation events related to Flash Ventures and each of the guarantors. The occurrence of a cancellation event could result in an acceleration of Flash Ventures’ obligations and a call on the Company’s guarantees. The following table presents the Company’s portion of the remaining guarantee obligations under the Flash Ventures’ lease facilities in both Japanese yen and U.S. dollar-equivalent, based upon the Japanese yen to U.S. dollar exchange rate as of September 30, 2022. Lease Amounts (Japanese yen, in billions) (U.S. dollar, in millions) Total guarantee obligations ¥ 243 $ 1,684 The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments as of September 30, 2022 in U.S. dollars, based upon the Japanese yen to U.S. dollar exchange rate as of September 30, 2022: Annual Installments Payment of Principal Amortization Purchase Option Exercise Price at Final Lease Terms Guarantee Amount (in millions) Remaining nine months of 2023 $ 371 $ 50 $ 421 2024 376 90 466 2025 203 82 285 2026 199 124 323 2027 53 106 159 2028 and thereafter 3 27 30 Total guarantee obligations $ 1,205 $ 479 $ 1,684 The Company and Kioxia have agreed to mutually contribute to, and indemnify each other and Flash Ventures for, environmental remediation costs or liability resulting from Flash Ventures’ manufacturing operations in certain circumstances. The Company has not made any indemnification payments, nor recorded any indemnification receivables, under any such agreements. As of September 30, 2022, no amounts have been accrued in the Condensed Consolidated Financial Statements with respect to these indemnification agreements. Unis Venture The Company has a joint venture with Unisplendour Corporation Limited and Unissoft (Wuxi) Group Co. Ltd. (“Unis”), referred to as the “Unis Venture”, to market and sell the Company’s products in China and to develop data storage systems for the Chinese market in the future. The Unis Venture is 49% owned by the Company and 51% owned by Unis. The Company accounts for its investment in the Unis Venture under the equity method of accounting. Revenue on products distributed by the Unis Venture is recognized upon sell through to third-party customers. For the three months ended September 30, 2022, the Company recognized approximately 3% of its consolidated revenue on products distributed by the Unis Venture. For the three months ended October 1, 2021, the Company recognized approximately 5% of its consolidated revenue on products distributed by the Unis Venture. The outstanding accounts receivable due from the Unis Venture were 6% and 5% of Accounts receivable, net for September 30, 2022 and July 1, 2022, respectively. |
Leases and Other Commitments
Leases and Other Commitments | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments Leases The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2034. These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. The following table summarizes supplemental balance sheet information related to operating leases as of September 30, 2022: Lease Amounts ($ in millions) Minimum lease payments by year: Remaining nine months of 2023 $ 36 2024 46 2025 44 2026 44 2027 39 Thereafter 147 Total future minimum lease payments 356 Less: Imputed interest 51 Present value of lease liabilities 305 Less: Current portion (included in Accrued expenses 40 Long-term operating lease liabilities (included in Other liabilities $ 265 Operating lease right-of-use assets (included in Other non-current assets $ 288 Weighted average remaining lease term in years 8.2 Weighted average discount rate 3.4 % The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases: Three Months Ended September 30, October 1, (in millions) Cost of operating leases $ 14 $ 13 Cash paid for operating leases 14 12 Operating lease assets obtained in exchange for operating lease liabilities 4 112 Purchase Agreements and Other Commitments In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. As of September 30, 2022, the Company had the following minimum long-term commitments: Long-Term Commitments (in millions) Year: Remaining nine months of 2023 $ 385 2024 325 2025 180 2026 53 2027 46 Thereafter 150 Total $ 1,139 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Stock-based Compensation Expense The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations: Three Months Ended September 30, October 1, (in millions) RSUs and PSUs $ 75 $ 67 ESPP 11 9 Total $ 86 $ 76 Three Months Ended September 30, October 1, (in millions) Cost of revenue $ 14 $ 9 Research and development 39 40 Selling, general and administrative 33 27 Subtotal 86 76 Tax benefit (13) (15) Total $ 73 $ 61 Windfall tax benefits and tax deficiencies for shortfalls related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were not material for the periods presented. Compensation cost related to unvested RSUs, PSUs, and rights to purchase shares of common stock under the ESPP will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of September 30, 2022: Unamortized Compensation Costs Weighted Average Service Period (in millions) (years) RSUs and PSUs (1) $ 655 2.6 ESPP 51 1.0 Total unamortized compensation cost $ 706 (1) Weighted average service period assumes the performance metrics are met for the PSUs. Plan Activities Stock Options The following table summarizes stock option activity under the Company’s incentive plans. All outstanding options were exercisable at September 30, 2022: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in millions) (in years) Options outstanding at July 1, 2022 0.9 $ 66.76 0.54 Canceled or expired (0.5) 84.39 Options outstanding at September 30, 2022 0.4 $ 45.08 0.81 RSUs and PSUs The following table summarizes RSU and PSU activity under the Company’s incentive plans: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value at Vest Date (in millions) (in millions) RSUs and PSUs outstanding at July 1, 2022 15.4 52.89 Granted 4.5 43.79 Vested (4.3) 53.28 $ 186 Forfeited (0.6) 62.12 RSUs and PSUs outstanding at September 30, 2022 15.0 49.71 RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units. Stock Repurchase Program The Company’s Board of Directors has authorized a stock repurchase program for the repurchase of up to $5.0 billion of the Company’s common stock, which authorization is effective through July 25, 2023. The Company did not make any stock repurchases during the three months ended September 30, 2022 and has not repurchased any shares of its common stock pursuant to its stock repurchase program since the first quarter of fiscal 2019. Although the Company will reevaluate the repurchasing of common stock when appropriate, there can be no assurance if, when or at what level the Company may resume such activity. The remaining amount available to be repurchased under the Company’s current stock repurchase program as of September 30, 2022 was $4.5 billion. 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. |
Income Tax Expense
Income Tax Expense | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | Income Tax Expense The Tax Cuts and Jobs Act (the “2017 Act”), enacted on December 22, 2017, includes a broad range of tax reform proposals affecting businesses. The Company completed its accounting for the tax effects of the enactment of the 2017 Act during the second quarter of fiscal 2019. However, the U.S. Treasury and the Internal Revenue Service (“IRS”) have issued tax guidance on certain provisions of the 2017 Act since the enactment date, and the Company anticipates the issuance of additional regulatory and interpretive guidance. The Company applied a reasonable interpretation of the 2017 Act along with the then-available guidance in finalizing its accounting for the tax effects of the 2017 Act. Any additional regulatory or interpretive guidance would constitute new information, which may require further refinements to the Company’s estimates in future periods. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which contained significant law changes related to tax, climate, energy, and health care. The tax measures include, among other things, a corporate alternative minimum tax of 15% on corporations with three-year average annual adjusted financial statement income exceeding $1 billion. The corporate alternative minimum tax will not be effective for the Company until fiscal year 2024 and the Company is currently evaluating the potential effects of these legislative changes. The following table presents the Company’s Income tax expense and the effective tax rate: Three Months Ended September 30, October 1, ($ in millions) Income before taxes $ 84 $ 704 Income tax expense 57 94 Effective tax rate 68 % 13 % Beginning in fiscal year 2023, the 2017 Act requires the Company to capitalize and amortize research and development expenses rather than expensing them in the year incurred. The tax effects related to the capitalization of research and development expenses are included in the effective tax rate for the three months ended September 30, 2022. This impact, together with the relative mix of earnings and losses by jurisdiction, the deduction for foreign derived intangible income, credits, and tax holidays in Malaysia, the Philippines and Thailand that will expire at various dates during fiscal years 2024 through 2031 are the primary drivers of the difference between the effective tax rate for the three months ended September 30, 2022 and the U.S. Federal statutory rate of 21%. The primary drivers of the difference between the effective tax rate for the three months ended October 1, 2021 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the deduction for foreign derived intangible income, credits, and tax holidays in Malaysia, the Philippines and Thailand. In addition, the effective tax rate for the three months ended October 1, 2021 included the discrete effect of an increase to unrecognized tax benefits of $16 million as a result of ongoing discussions with various taxing authorities. Uncertain Tax Positions With the exception of certain unrecognized tax benefits that are directly associated with the tax position taken, unrecognized tax benefits are presented gross in the Condensed Consolidated Balance Sheets. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for the three months ended September 30, 2022 (in millions): Accrual balance at July 1, 2022 $ 1,047 Gross increases related to current year tax positions 2 Gross decreases related to prior year tax positions (18) Settlements (2) Lapse of statute of limitations (3) Accrual balance at September 30, 2022 $ 1,026 As of September 30, 2022, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was $1.03 billion. Interest and penalties related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of September 30, 2022 was $264 million. Of these amounts, approximately $1.15 billion could result in potential cash payments. As previously disclosed, the IRS issued statutory notices of deficiency and notices of proposed adjustments with respect to transfer pricing with the Company’s foreign subsidiaries and intercompany payable balances for years 2008 through 2015. In September 2018 and March 2019, the Company filed petitions with the U.S. Tax Court covering years 2008 through 2012, for which it had received statutory notices of deficiency, while years 2013 through 2015 remain in the jurisdiction of the IRS’s Examination function. The IRS has filed various Amendments to Answer with the U.S. Tax Court which, together with the notices of proposed adjustments, would result in additional federal income tax liabilities totaling approximately $1.6 billion and penalties totaling $449 million with respect to years 2008 through 2015. In May 2022, the Company and the IRS tentatively reached a settlement for resolving the statutory notices of deficiency and notices of proposed adjustments with respect to years 2008 through 2015 subject to the parties entering into final stipulations and a closing agreement. Based on the tentative settlement for resolution, the Company expects to pay tax and interest totaling approximately $600 million to $700 million, which the Company expects to be partially offset by future reductions to its mandatory deemed repatriation tax obligations and tax savings from interest deductions aggregating to approximately $100 million to $150 million. While the Company continues to work with the IRS to come to a final agreement on the federal tax and interest calculations, the Company is uncertain as to when a final agreement will be reached and the exact timing of when any payments will be made. However, the Company believes it is reasonably likely that these payments may be made within the next twelve months and have classified that portion of these unrecognized tax benefits, including interest in Income taxes payable on its Condensed Consolidated Balance Sheets as of September 30, 2022. This classification and amount may be subject to change in the next twelve months depending on when the Company is able to reach a final agreement with the IRS. The Company believes that adequate provision has been made for any adjustments that may result from any other tax examinations. However, the outcome of such tax examinations cannot be predicted with certainty. If any issues addressed in the Company’s tax examinations 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. 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. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The following table presents the computation of basic and diluted income per common share: Three Months Ended September 30, October 1, (in millions, except per share data) Net income $ 27 $ 610 Weighted average shares outstanding: Basic 316 310 Employee stock options, RSUs, PSUs, and ESPP 3 6 Diluted 319 316 Income per common share Basic $ 0.09 $ 1.97 Diluted $ 0.08 $ 1.93 Anti-dilutive potential common shares excluded 8 1 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 dilutive outstanding employee stock options, RSUs and PSUs, and rights to purchase shares of common stock under the Company’s ESPP. For the three months ended September 30, 2022 and October 1, 2021, the Company excluded common shares subject to outstanding equity awards from the calculation of diluted shares because their impact would have been anti-dilutive based on the Company’s average stock price during the period. |
Employee Termination, Asset Imp
Employee Termination, Asset Impairment and Other Charges | 3 Months Ended |
Sep. 30, 2022 | |
Postemployment Benefits [Abstract] | |
Employee Termination, Asset Impairment and Other Charges | Employee Termination, Asset Impairment, and Other Charges Business Realignment The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources. The Company recorded the following charges related to these actions: Three Months Ended September 30, October 1, (in millions) Employee termination benefits $ 24 $ 15 Asset impairments and losses on disposal of assets — 3 Total employee termination, asset impairment, and other charges $ 24 $ 18 The following table presents an analysis of the components of these activities against the reserve during the three months ended September 30, 2022: Employee Termination Benefits (in millions) Accrual balance at July 1, 2022 $ 17 Charges 24 Cash payments (28) Accrual balance at September 30, 2022 $ 13 |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings Tax For disclosures regarding statutory notices of deficiency issued by the IRS on June 28, 2018 and December 10, 2018, petitions filed by the Company with the U.S. Tax Court in September 2018 and March 2019, additional penalties asserted by the IRS in March 2021 and further Amendments to Answers filed by the IRS in June 2021 and January 2022, and a tentative resolution with respect to certain matters, see Note 13, Income Tax Expense . Other Matters In the normal course of business, the Company is subject to 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, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, any monetary liability and financial impact to the Company from these matters could differ materially from the Company’s expectations. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Western Digital Corporation (“Western Digital” or the “Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions based on both flash-based products (“Flash”) and hard disk drives (“HDD”) technologies. With dedicated Flash and HDD business units driving advancements in memory technologies, the Company creates and drives innovations needed to help customers capture, preserve, access, and transform an ever-increasing diversity of data. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Basis of Presentation, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended July 1, 2022. In the opinion of management, all adjustments necessary to fairly state the 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 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 July 1, 2022. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2023, which ends on June 30, 2023, and 2022, which ended on July 1, 2022, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks. |
Segment Reporting | Segment Reporting The Company manufactures, markets, and sells data storage devices and solutions in the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. The Company manages and reports under two reportable segments: Flash and HDD. The Company’s Chief Operating Decision Maker (“CODM”) evaluates performance of the Company and makes decisions regarding allocation of resources based on each operating segment’s net revenue and gross margin. Because of the integrated nature of the Company’s production and distribution activities, separate segment asset measures are not available or reviewed by the CODM to evaluate the performance of or to allocate resources to the segments. |
Use of Estimates | Use of Estimates 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 with consideration given to the potential impacts of current macroeconomic conditions. However, actual results could differ materially from these estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with prior standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. The Company adopted the new standard effective July 2, 2022, the first day of the year ending June 30, 2023, using the modified retrospective method. On the date of adoption, the Company recorded a reduction in Additional Paid-In Capital of $128 million, a reduction of unamortized debt discount of $48 million, a reduction of deferred income tax liabilities of $11 million, and an increase to retained earnings of $91 million for the after-tax impact of previously recognized amortization of the debt discount associated with the Co mpany’s convertible senior notes. In November 2021, the FASB issued ASU No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU 2021-10”). ASU 2021-10 increases the transparency of government assistance received by requiring most business entities to disclose information about government assistance received, including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of 2023. The Company adopted this ASU on July 2, 2022, the first day of the year ending June 30, 2023, and the adoption did not have a material impact on its Condensed Consolidated Financial Statements. |
Fair Value Measurements and Investments | 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. |
Business Segments, Geographic_2
Business Segments, Geographic Information, and Concentrations of Risk (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table summarizes the operating performance of the Company’s reportable segments: Three Months Ended September 30, October 1, (in millions, except percentages) Net revenue: Flash $ 1,722 $ 2,490 HDD 2,014 2,561 Total net revenue $ 3,736 $ 5,051 Gross profit: Flash $ 422 $ 921 HDD 574 792 Total gross profit for segments 996 1,713 Unallocated corporate items: Stock-based compensation expense (14) (9) Amortization of acquired intangible assets (1) (39) Total unallocated corporate items (15) (48) Consolidated gross profit $ 981 $ 1,665 Gross margin: Flash 24.5 % 37.0 % HDD 28.5 % 30.9 % Consolidated gross margin 26.3 % 33.0 % |
Schedule of Disaggregation of Revenue | The Company’s disaggregated revenue information is as follows: Three Months Ended September 30, October 1, (in millions) Revenue by End Market Cloud $ 1,829 $ 2,225 Client 1,229 1,853 Consumer 678 973 Total Revenue $ 3,736 $ 5,051 Revenue by Geography Asia $ 1,686 $ 2,675 Americas 1,423 1,614 Europe, Middle East and Africa 627 762 Total Revenue $ 3,736 $ 5,051 |
Schedule of Goodwill | The following table provides a summary of goodwill activity for the period: Flash HDD Total (in millions) Balance at July 1, 2022 $ 5,718 $ 4,323 $ 10,041 Foreign currency translation adjustment (2) (2) (4) Balance at September 30, 2022 $ 5,716 $ 4,321 $ 10,037 |
Supplemental Financial Statem_2
Supplemental Financial Statement Data (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories September 30, July 1, (in millions) Inventories: Raw materials and component parts $ 1,809 $ 1,603 Work-in-process 1,130 1,162 Finished goods 923 873 Total inventories $ 3,862 $ 3,638 |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net September 30, July 1, (in millions) Property, plant and equipment: Land $ 269 $ 269 Buildings and improvements 1,945 1,920 Machinery and equipment 8,734 8,642 Computer equipment and software 499 494 Furniture and fixtures 54 54 Construction-in-process 642 591 Property, plant and equipment, gross 12,143 11,970 Accumulated depreciation (8,425) (8,300) Property, plant and equipment, net $ 3,718 $ 3,670 |
Schedule of Intangible Assets | Other Intangible assets September 30, July 1, (in millions) Other Intangible assets: Finite-lived intangible assets $ 5,715 $ 5,493 In-process research and development 80 80 Accumulated amortization (5,621) (5,360) Other Intangible assets, net $ 174 $ 213 |
Schedule of Product Warranty Liability | Product warranty liability Changes in the warranty accrual were as follows: Three Months Ended September 30, October 1, (in millions) Warranty accrual, beginning of period $ 345 $ 363 Charges to operations 32 40 Utilization (34) (23) Changes in estimate related to pre-existing warranties (3) (10) Warranty accrual, end of period $ 340 $ 370 The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below: September 30, July 1, (in millions) Warranty accrual: Current portion (included in Accrued expenses) $ 144 $ 162 Long-term portion (included in Other liabilities) 196 183 Total warranty accrual $ 340 $ 345 |
Schedule of Other Liabilities | Other liabilities September 30, July 1, (in millions) Other liabilities: Non-current net tax payable $ 460 $ 659 Non-current portion of unrecognized tax benefits 453 477 Other non-current liabilities 629 643 Total other liabilities $ 1,542 $ 1,779 |
Schedule of Accumulated Other Comprehensive Loss | The following table illustrates the changes in the balances of each component of AOCI: Actuarial Pension Losses Foreign Currency Translation Adjustment Unrealized Losses on Derivative Contracts Total Accumulated Comprehensive Loss (in millions) Balance at July 1, 2022 $ (11) $ (277) $ (266) $ (554) Other comprehensive loss before reclassifications — (80) (140) (220) Amounts reclassified from accumulated other comprehensive loss — — 64 64 Income tax benefit related to items of other comprehensive loss — — 16 16 Net current-period other comprehensive loss — (80) (60) (140) Balance at September 30, 2022 $ (11) $ (357) $ (326) $ (694) |
Fair Value Measurements and I_2
Fair Value Measurements and Investments (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and July 1, 2022, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values: September 30, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 322 $ — $ — $ 322 Foreign exchange contracts — 48 — 48 Interest rate swap contracts — 11 — 11 Total assets at fair value $ 322 $ 59 $ — $ 381 Liabilities: Foreign exchange contracts $ — $ 329 $ — $ 329 Total liabilities at fair value $ — $ 329 $ — $ 329 July 1, 2022 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents - Money market funds $ 266 $ — $ — $ 266 Foreign exchange contracts — 61 — 61 Interest rate swap contracts — 3 — 3 Total assets at fair value $ 266 $ 64 $ — $ 330 Liabilities: Foreign exchange contracts $ — $ 316 $ — $ 316 Total liabilities at fair value $ — $ 316 $ — $ 316 |
Schedule of Related Costs And Fair Values Based On Quoted Market Prices | For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the first quarter of 2023 and the fourth quarter of 2022, respectively. September 30, 2022 July 1, 2022 Carrying Fair Carrying Fair (in millions) 1.50% convertible notes due 2024 $ 1,097 $ 1,047 $ 1,048 $ 1,040 4.75% senior unsecured notes due 2026 2,291 2,134 2,291 2,205 Variable interest rate Term Loan A-2 maturing 2027 2,693 2,634 2,693 2,621 2.85% senior unsecured notes due 2029 495 389 495 412 3.10% senior unsecured notes due 2032 495 342 495 389 Total $ 7,071 $ 6,546 $ 7,022 $ 6,667 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: September 30, July 1, (in millions) 1.50% convertible notes due 2024 $ 1,100 $ 1,100 4.75% senior unsecured notes due 2026 2,300 2,300 Variable interest rate Term Loan A-2 maturing 2027 2,700 2,700 2.85% senior unsecured notes due 2029 500 500 3.10% senior unsecured notes due 2032 500 500 Total debt 7,100 7,100 Issuance costs and debt discounts (29) (78) Long-term debt $ 7,071 $ 7,022 |
Pensions and Other Post-Retir_2
Pensions and Other Post-Retirement Benefit Plans (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Obligations and Funded Status | The following table presents the unfunded status of the benefit obligations for the Pension Plans: September 30, July 1, (in millions) Benefit obligation at end of period $ 275 $ 294 Fair value of plan assets at end of period 177 189 Unfunded status $ 98 $ 105 |
Schedule of Unfunded Amounts Recognized on Consolidated Balance Sheets | The following table presents the unfunded amounts related to the Pension Plans as recognized on the Company’s Condensed Consolidated Balance Sheets: September 30, July 1, (in millions) Current liabilities $ 1 $ 1 Non-current liabilities 97 104 Net amount recognized $ 98 $ 105 |
Related Parties and Related C_2
Related Parties and Related Commitments and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Notes Receivable and Investments in Related Parties | The following table presents the notes receivable from, and equity investments in, Flash Ventures: September 30, July 1, (in millions) Notes receivable, Flash Partners $ 6 $ 27 Notes receivable, Flash Alliance 62 55 Notes receivable, Flash Forward 658 793 Investment in Flash Partners 158 166 Investment in Flash Alliance 229 243 Investment in Flash Forward 106 112 Total notes receivable and investments in Flash Ventures $ 1,219 $ 1,396 |
Schedule of Variable Interest Entity Maximum Loss Exposure | The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S. dollar exchange rate at September 30, 2022, is presented below. Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S. dollar. September 30, (in millions) Notes receivable $ 726 Equity investments 493 Operating lease guarantees 1,684 Inventory and prepayments 1,022 Maximum estimable loss exposure $ 3,925 |
Schedule of Guarantor Obligations | The following table presents the Company’s portion of the remaining guarantee obligations under the Flash Ventures’ lease facilities in both Japanese yen and U.S. dollar-equivalent, based upon the Japanese yen to U.S. dollar exchange rate as of September 30, 2022. Lease Amounts (Japanese yen, in billions) (U.S. dollar, in millions) Total guarantee obligations ¥ 243 $ 1,684 |
Schedule of Remaining Guarantee Obligations | The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments as of September 30, 2022 in U.S. dollars, based upon the Japanese yen to U.S. dollar exchange rate as of September 30, 2022: Annual Installments Payment of Principal Amortization Purchase Option Exercise Price at Final Lease Terms Guarantee Amount (in millions) Remaining nine months of 2023 $ 371 $ 50 $ 421 2024 376 90 466 2025 203 82 285 2026 199 124 323 2027 53 106 159 2028 and thereafter 3 27 30 Total guarantee obligations $ 1,205 $ 479 $ 1,684 |
Leases and Other Commitments (T
Leases and Other Commitments (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Disclosures | The following table summarizes supplemental balance sheet information related to operating leases as of September 30, 2022: Lease Amounts ($ in millions) Minimum lease payments by year: Remaining nine months of 2023 $ 36 2024 46 2025 44 2026 44 2027 39 Thereafter 147 Total future minimum lease payments 356 Less: Imputed interest 51 Present value of lease liabilities 305 Less: Current portion (included in Accrued expenses 40 Long-term operating lease liabilities (included in Other liabilities $ 265 Operating lease right-of-use assets (included in Other non-current assets $ 288 Weighted average remaining lease term in years 8.2 Weighted average discount rate 3.4 % |
schedule of Supplemental Cash Flow Disclosures | The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases: Three Months Ended September 30, October 1, (in millions) Cost of operating leases $ 14 $ 13 Cash paid for operating leases 14 12 Operating lease assets obtained in exchange for operating lease liabilities 4 112 |
Schedule of Long-term Purchase Agreements | As of September 30, 2022, the Company had the following minimum long-term commitments: Long-Term Commitments (in millions) Year: Remaining nine months of 2023 $ 385 2024 325 2025 180 2026 53 2027 46 Thereafter 150 Total $ 1,139 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations: Three Months Ended September 30, October 1, (in millions) RSUs and PSUs $ 75 $ 67 ESPP 11 9 Total $ 86 $ 76 Three Months Ended September 30, October 1, (in millions) Cost of revenue $ 14 $ 9 Research and development 39 40 Selling, general and administrative 33 27 Subtotal 86 76 Tax benefit (13) (15) Total $ 73 $ 61 |
Schedule of Employee Service Share-based Compensation, Unrecognized Costs | The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of September 30, 2022: Unamortized Compensation Costs Weighted Average Service Period (in millions) (years) RSUs and PSUs (1) $ 655 2.6 ESPP 51 1.0 Total unamortized compensation cost $ 706 (1) Weighted average service period assumes the performance metrics are met for the PSUs. |
Schedule of Stock Option Activity | The following table summarizes stock option activity under the Company’s incentive plans. All outstanding options were exercisable at September 30, 2022: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in millions) (in years) Options outstanding at July 1, 2022 0.9 $ 66.76 0.54 Canceled or expired (0.5) 84.39 Options outstanding at September 30, 2022 0.4 $ 45.08 0.81 |
Schedule of Restricted Stock Unit | The following table summarizes RSU and PSU activity under the Company’s incentive plans: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value at Vest Date (in millions) (in millions) RSUs and PSUs outstanding at July 1, 2022 15.4 52.89 Granted 4.5 43.79 Vested (4.3) 53.28 $ 186 Forfeited (0.6) 62.12 RSUs and PSUs outstanding at September 30, 2022 15.0 49.71 |
Income Tax Expense (Tables)
Income Tax Expense (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents the Company’s Income tax expense and the effective tax rate: Three Months Ended September 30, October 1, ($ in millions) Income before taxes $ 84 $ 704 Income tax expense 57 94 Effective tax rate 68 % 13 % |
Schedule of Income Tax Contingencies | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for the three months ended September 30, 2022 (in millions): Accrual balance at July 1, 2022 $ 1,047 Gross increases related to current year tax positions 2 Gross decreases related to prior year tax positions (18) Settlements (2) Lapse of statute of limitations (3) Accrual balance at September 30, 2022 $ 1,026 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted income per common share: Three Months Ended September 30, October 1, (in millions, except per share data) Net income $ 27 $ 610 Weighted average shares outstanding: Basic 316 310 Employee stock options, RSUs, PSUs, and ESPP 3 6 Diluted 319 316 Income per common share Basic $ 0.09 $ 1.97 Diluted $ 0.08 $ 1.93 Anti-dilutive potential common shares excluded 8 1 |
Employee Termination, Asset I_2
Employee Termination, Asset Impairment and Other Charges (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Postemployment Benefits [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The Company recorded the following charges related to these actions: Three Months Ended September 30, October 1, (in millions) Employee termination benefits $ 24 $ 15 Asset impairments and losses on disposal of assets — 3 Total employee termination, asset impairment, and other charges $ 24 $ 18 The following table presents an analysis of the components of these activities against the reserve during the three months ended September 30, 2022: Employee Termination Benefits (in millions) Accrual balance at July 1, 2022 $ 17 Charges 24 Cash payments (28) Accrual balance at September 30, 2022 $ 13 |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 02, 2022 | Jul. 01, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional paid-in capital | $ (3,641) | $ (3,733) | |
Retained earnings | $ 9,157 | $ 9,039 | |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional paid-in capital | $ 128 | ||
Debt discount | 48 | ||
Deferred income tax liabilities | 11 | ||
Retained earnings | $ 91 |
Business Segments, Geographic_3
Business Segments, Geographic Information, and Concentrations of Risk (Details) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 USD ($) segment | Oct. 01, 2021 USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Revenue, net | $ 3,736 | $ 5,051 |
Gross profit | 981 | 1,665 |
Stock-based compensation expense | 86 | 76 |
Total operating expenses | $ 823 | $ 887 |
Gross margin, percentage | 26.30% | 33% |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue, net | $ 3,736 | $ 5,051 |
Gross profit | 996 | 1,713 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Stock-based compensation expense | (14) | (9) |
Amortization of acquired intangible assets | (1) | (39) |
Total operating expenses | $ (15) | $ (48) |
Flash | ||
Segment Reporting Information [Line Items] | ||
Gross margin, percentage | 24.50% | 37% |
Flash | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue, net | $ 1,722 | $ 2,490 |
Gross profit | $ 422 | $ 921 |
HDD | ||
Segment Reporting Information [Line Items] | ||
Gross margin, percentage | 28.50% | 30.90% |
HDD | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue, net | $ 2,014 | $ 2,561 |
Gross profit | $ 574 | $ 792 |
Business Segments, Geographic_4
Business Segments, Geographic Information, and Concentrations of Risk - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue, net | $ 3,736 | $ 5,051 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 1,686 | 2,675 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 1,423 | 1,614 |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 627 | 762 |
Cloud | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 1,829 | 2,225 |
Client | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | 1,229 | 1,853 |
Consumer | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, net | $ 678 | $ 973 |
Business Segments, Geographic_5
Business Segments, Geographic Information, and Concentrations of Risk - Additional Information (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Flash | ||
Concentration Risk [Line Items] | ||
Carrying value, percentage | 7% | |
Goodwill impairment | $ 0 | |
HDD | ||
Concentration Risk [Line Items] | ||
Carrying value, percentage | 32% | |
Goodwill impairment | $ 0 | |
Revenue from Contract with Customer | Customer Concentration Risk | Top Ten Customers | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 52% | 43% |
Business Segments, Geographic_6
Business Segments, Geographic Information, and Concentrations of Risk - Goodwill Rollforward (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance at July 1, 2022 | $ 10,041 |
Foreign currency translation adjustment | (4) |
Balance at September 30, 2022 | 10,037 |
Flash | |
Goodwill [Roll Forward] | |
Balance at July 1, 2022 | 5,718 |
Foreign currency translation adjustment | (2) |
Balance at September 30, 2022 | 5,716 |
HDD | |
Goodwill [Roll Forward] | |
Balance at July 1, 2022 | 4,323 |
Foreign currency translation adjustment | (2) |
Balance at September 30, 2022 | $ 4,321 |
Revenues - Revenue Remaining Pe
Revenues - Revenue Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 26 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-06-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount |
Supplemental Financial Statem_3
Supplemental Financial Statement Data - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Jul. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Proceeds on sale of trade accounts receivable | $ 291,000,000 | $ 0 | |
Factored receivables outstanding | 291,000,000 | $ 300,000,000 | |
Other comprehensive loss, foreign currency transaction and translation adjustment, net of tax | 62,000,000 | ||
Loss, reclassification, after tax | $ 2,000,000 |
Supplemental Financial Statem_4
Supplemental Financial Statement Data - Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Inventories: | ||
Raw materials and component parts | $ 1,809 | $ 1,603 |
Work-in-process | 1,130 | 1,162 |
Finished goods | 923 | 873 |
Total inventories | $ 3,862 | $ 3,638 |
Supplemental Financial Statem_5
Supplemental Financial Statement Data - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Property, plant and equipment: | ||
Property, plant and equipment, gross | $ 12,143 | $ 11,970 |
Accumulated depreciation | (8,425) | (8,300) |
Property, plant and equipment, net | 3,718 | 3,670 |
Land | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 269 | 269 |
Buildings and improvements | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 1,945 | 1,920 |
Machinery and equipment | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 8,734 | 8,642 |
Computer equipment and software | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 499 | 494 |
Furniture and fixtures | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | 54 | 54 |
Construction-in-process | ||
Property, plant and equipment: | ||
Property, plant and equipment, gross | $ 642 | $ 591 |
Supplemental Financial Statem_6
Supplemental Financial Statement Data - Other Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finite-lived intangible assets | $ 5,715 | $ 5,493 |
In-process research and development | 80 | 80 |
Accumulated amortization | (5,621) | (5,360) |
Other Intangible assets, net | $ 174 | $ 213 |
Supplemental Financial Statem_7
Supplemental Financial Statement Data - Warranty Accrual Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty accrual, beginning of period | $ 345 | $ 363 |
Charges to operations | 32 | 40 |
Utilization | (34) | (23) |
Changes in estimate related to pre-existing warranties | (3) | (10) |
Warranty accrual, end of period | $ 340 | $ 370 |
Supplemental Financial Statem_8
Supplemental Financial Statement Data - Total Warranty Accrual (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 | Oct. 01, 2021 | Jul. 02, 2021 |
Warranty accrual: | ||||
Current portion (included in Accrued expenses) | $ 144 | $ 162 | ||
Long-term portion (included in Other liabilities) | 196 | 183 | ||
Total warranty accrual | $ 340 | $ 345 | $ 370 | $ 363 |
Supplemental Financial Statem_9
Supplemental Financial Statement Data - Other Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Other liabilities: | ||
Non-current net tax payable | $ 460 | $ 659 |
Non-current portion of unrecognized tax benefits | 453 | 477 |
Other non-current liabilities | 629 | 643 |
Total other liabilities | $ 1,542 | $ 1,779 |
Supplemental Financial State_10
Supplemental Financial Statement Data - Accumulated Other Comprehensive Loss Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 12,221 | $ 10,721 |
Other comprehensive loss before reclassifications | (220) | |
Amounts reclassified from accumulated other comprehensive loss | 64 | |
Income tax benefit related to items of other comprehensive loss | 16 | (8) |
Other comprehensive income (loss), net of tax | (140) | 30 |
Ending balance | 12,107 | 11,361 |
Actuarial Pension Losses | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (11) | |
Other comprehensive loss before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Income tax benefit related to items of other comprehensive loss | 0 | |
Other comprehensive income (loss), net of tax | 0 | |
Ending balance | (11) | |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (277) | |
Other comprehensive loss before reclassifications | (80) | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Income tax benefit related to items of other comprehensive loss | 0 | |
Other comprehensive income (loss), net of tax | (80) | |
Ending balance | (357) | |
Unrealized Losses on Derivative Contracts | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (266) | |
Other comprehensive loss before reclassifications | (140) | |
Amounts reclassified from accumulated other comprehensive loss | 64 | |
Income tax benefit related to items of other comprehensive loss | 16 | |
Other comprehensive income (loss), net of tax | (60) | |
Ending balance | (326) | |
Total Accumulated Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (554) | (197) |
Ending balance | $ (694) | $ (167) |
Fair Value Measurements and I_3
Fair Value Measurements and Investments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Assets: | ||
Total assets at fair value | $ 381 | $ 330 |
Liabilities: | ||
Total liabilities at fair value | 329 | 316 |
Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 322 | 266 |
Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 48 | 61 |
Liabilities: | ||
Derivative liability | 329 | 316 |
Interest rate swap contracts | ||
Assets: | ||
Foreign exchange contracts | 11 | 3 |
Level 1 | ||
Assets: | ||
Total assets at fair value | 322 | 266 |
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 1 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 322 | 266 |
Level 1 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 1 | Interest rate swap contracts | ||
Assets: | ||
Foreign exchange contracts | 0 | 0 |
Level 2 | ||
Assets: | ||
Total assets at fair value | 59 | 64 |
Liabilities: | ||
Total liabilities at fair value | 329 | 316 |
Level 2 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 0 | 0 |
Level 2 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 48 | 61 |
Liabilities: | ||
Derivative liability | 329 | 316 |
Level 2 | Interest rate swap contracts | ||
Assets: | ||
Foreign exchange contracts | 11 | 3 |
Level 3 | ||
Assets: | ||
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 3 | Cash equivalents - Money market funds | ||
Assets: | ||
Cash equivalents - Money market funds | 0 | 0 |
Level 3 | Foreign exchange contracts | ||
Assets: | ||
Foreign exchange contracts | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 | Interest rate swap contracts | ||
Assets: | ||
Foreign exchange contracts | $ 0 | $ 0 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Debt Instrument Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
1.50% convertible notes due 2024 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 1.50% | 1.50% |
4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.75% | 4.75% |
2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 2.85% | 2.85% |
3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 3.10% | 3.10% |
Level 2 | Carrying Value | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 7,071 | $ 7,022 |
Level 2 | Carrying Value | 1.50% convertible notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,097 | 1,048 |
Level 2 | Carrying Value | 4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,291 | 2,291 |
Level 2 | Carrying Value | Variable interest rate Term Loan A-2 maturing 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,693 | 2,693 |
Level 2 | Carrying Value | 2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 495 | 495 |
Level 2 | Carrying Value | 3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 495 | 495 |
Level 2 | Fair Value | ||
Debt Instrument [Line Items] | ||
Long-term debt | 6,546 | 6,667 |
Level 2 | Fair Value | 1.50% convertible notes due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,047 | 1,040 |
Level 2 | Fair Value | 4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,134 | 2,205 |
Level 2 | Fair Value | Variable interest rate Term Loan A-2 maturing 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,634 | 2,621 |
Level 2 | Fair Value | 2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 389 | 412 |
Level 2 | Fair Value | 3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 342 | $ 389 |
Derivatives Instruments and H_2
Derivatives Instruments and Hedging Activities (Details) | 3 Months Ended |
Sep. 30, 2022 | |
Foreign Exchange Forward Contracts Designated | |
Derivatives, Fair Value [Line Items] | |
Derivative, term of contract (to not exceed) | 12 months |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Debt Instrument [Line Items] | ||
Debt instrument, carrying amount | $ 7,100 | $ 7,100 |
Issuance costs and debt discounts | (29) | (78) |
Long-term debt | $ 7,071 | $ 7,022 |
4.75% senior unsecured notes due 2026 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 4.75% | 4.75% |
Debt instrument, carrying amount | $ 2,300 | $ 2,300 |
Variable interest rate Term Loan A-2 maturing 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument, carrying amount | $ 2,700 | $ 2,700 |
2.85% senior unsecured notes due 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 2.85% | 2.85% |
Debt instrument, carrying amount | $ 500 | $ 500 |
3.10% senior unsecured notes due 2032 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 3.10% | 3.10% |
Debt instrument, carrying amount | $ 500 | $ 500 |
Convertible Debt | 1.50% convertible notes due 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate (percentage) | 1.50% | 1.50% |
Debt instrument, carrying amount | $ 1,100 | $ 1,100 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2022 | Oct. 01, 2021 | Jul. 02, 2022 | Jul. 01, 2022 | |
Debt Instrument [Line Items] | ||||
Repayments of revolving credit facility | $ 300,000,000 | $ 0 | ||
1.50% convertible notes due 2024 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate (percentage) | 1.50% | 1.50% | ||
1.50% convertible notes due 2024 | Convertible Debt | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate (percentage) | 1.50% | |||
Revolving Credit Facility | 2027 Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Repayments of revolving credit facility | $ 300,000,000 | |||
Debt instrument, face amount | $ 2,250,000,000 |
Pensions and Other Post-Retir_3
Pensions and Other Post-Retirement Benefit Plans - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Expected long-term rate of return on plan assets | 2.50% |
Pensions and Other Post-Retir_4
Pensions and Other Post-Retirement Benefit Plans - Obligations and Funded Status (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Retirement Benefits [Abstract] | ||
Benefit obligation at end of period | $ 275 | $ 294 |
Fair value of plan assets at end of period | 177 | 189 |
Unfunded status | $ 98 | $ 105 |
Pensions and Other Post-Retir_5
Pensions and Other Post-Retirement Benefit Plans - Unfunded Amounts Recognized on Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Retirement Benefits [Abstract] | ||
Current liabilities | $ 1 | $ 1 |
Non-current liabilities | 97 | 104 |
Net amount recognized | $ 98 | $ 105 |
Related Parties and Related C_3
Related Parties and Related Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 USD ($) entity | Oct. 01, 2021 USD ($) | Jul. 01, 2022 USD ($) | |
Guarantor Obligations [Line Items] | |||
Number of legal entities | entity | 3 | ||
Accounts payable to related parties | $ 295 | $ 320 | |
Investment funding commitments, percentage | 50% | ||
Depreciation prepayments | $ 203 | ||
Remainder of fiscal year | 182 | ||
Next fiscal year | $ 21 | ||
Unis Venture | |||
Guarantor Obligations [Line Items] | |||
Equity method investment, ownership percentage | 49% | ||
Revenue from Contract with Customer | Unis Venture | Product Concentration Risk | |||
Guarantor Obligations [Line Items] | |||
Concentration risk, percentage | 3% | 5% | |
Accounts Receivable Benchmark | Product Concentration Risk | Unis Venture | |||
Guarantor Obligations [Line Items] | |||
Concentration risk, percentage | 6% | 5% | |
Unissoft (Wuxi) Group Co Ltd. | Unis Venture | |||
Guarantor Obligations [Line Items] | |||
Partner's ownership in venture business | 51% | ||
Western Digital Corp | Minimum | |||
Guarantor Obligations [Line Items] | |||
Investment funding commitments, percentage | 49.90% | ||
Western Digital Corp | Maximum | |||
Guarantor Obligations [Line Items] | |||
Investment funding commitments, percentage | 50% | ||
Equity Method Investee | |||
Guarantor Obligations [Line Items] | |||
Investments in flash ventures | $ 1,000 | $ 1,200 | |
Accounts payable to related parties | $ 295 | $ 320 |
Related Parties and Related C_4
Related Parties and Related Commitments and Contingencies - Equity Investments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 01, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes receivable and investments in Flash Ventures | $ 1,219 | $ 1,396 |
Flash Partners Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 6 | 27 |
Investments | 158 | 166 |
Flash Alliance Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 62 | 55 |
Investments | 229 | 243 |
Flash Forward Ltd | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, related parties | 658 | 793 |
Investments | 106 | 112 |
Equity Method Investee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total notes receivable and investments in Flash Ventures | $ 1,219 | $ 1,396 |
Related Parties and Related C_5
Related Parties and Related Commitments and Contingencies - Maximum Loss Exposure (Details) - Sep. 30, 2022 - Equity Method Investee $ in Millions, ¥ in Billions | USD ($) | JPY (¥) |
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | $ 3,925 | |
Notes receivable | ||
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | 726 | |
Equity investments | ||
Guarantor Obligations [Line Items] | ||
VIE, reporting entity involvement, maximum loss exposure, amount | 493 | |
Operating lease guarantees | ||
Guarantor Obligations [Line Items] | ||
Operating lease guarantees | 1,684 | ¥ 243 |
Inventory and prepayments | ||
Guarantor Obligations [Line Items] | ||
Inventory and prepayments | $ 1,022 |
Related Parties and Related C_6
Related Parties and Related Commitments and Contingencies - JV Lease Guarantees (Details) - Sep. 30, 2022 $ in Millions, ¥ in Billions | USD ($) | JPY (¥) |
Operating lease guarantees | Equity Method Investee | ||
Loss Contingencies [Line Items] | ||
Total guarantee obligations | $ 1,684 | ¥ 243 |
Related Parties and Related C_7
Related Parties and Related Commitments and Contingencies - Joint Venture Lease Amounts (Details) - Equity Method Investee $ in Millions | Sep. 30, 2022 USD ($) |
Guarantor Obligations [Line Items] | |
Remaining nine months of 2023 | $ 421 |
2024 | 466 |
2025 | 285 |
2026 | 323 |
2027 | 159 |
2028 and thereafter | 30 |
Total guarantee obligations | 1,684 |
Payment of Principal Amortization | |
Guarantor Obligations [Line Items] | |
Remaining nine months of 2023 | 371 |
2024 | 376 |
2025 | 203 |
2026 | 199 |
2027 | 53 |
2028 and thereafter | 3 |
Total guarantee obligations | 1,205 |
Purchase Option Exercise Price at Final Lease Terms | |
Guarantor Obligations [Line Items] | |
Remaining nine months of 2023 | 50 |
2024 | 90 |
2025 | 82 |
2026 | 124 |
2027 | 106 |
2028 and thereafter | 27 |
Total guarantee obligations | $ 479 |
Leases and Other Commitments -
Leases and Other Commitments - Supplemental Balance Sheet (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Minimum lease payments by year: | |
Remaining nine months of 2023 | $ 36 |
2024 | 46 |
2025 | 44 |
2026 | 44 |
2027 | 39 |
Thereafter | 147 |
Total future minimum lease payments | 356 |
Less: Imputed interest | 51 |
Present value of lease liabilities | $ 305 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses |
Less: Current portion (included in Accrued expenses) | $ 40 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities |
Long-term operating lease liabilities (included in Other liabilities ) | $ 265 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets |
Operating lease right-of-use assets (included in Other non-current assets) | $ 288 |
Weighted average remaining lease term in years | 8 years 2 months 12 days |
Weighted average discount rate | 3.40% |
Leases and Other Commitments _2
Leases and Other Commitments - Supplemental Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Leases [Abstract] | ||
Cost of operating leases | $ 14 | $ 13 |
Cash paid for operating leases | 14 | 12 |
Operating lease assets obtained in exchange for operating lease liabilities | $ 4 | $ 112 |
Leases and Other Commitments _3
Leases and Other Commitments - Long-Term Commitments (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
Remaining nine months of 2023 | $ 385 |
2024 | 325 |
2025 | 180 |
2026 | 53 |
2027 | 46 |
Thereafter | 150 |
Total | $ 1,139 |
Shareholders' Equity - Stock-Ba
Shareholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | $ 86 | $ 76 |
Tax benefit | (13) | (15) |
Total | 73 | 61 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | 14 | 9 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | 39 | 40 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | 33 | 27 |
RSUs and PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | 75 | 67 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expenses on stock-based compensation | $ 11 | $ 9 |
Shareholders' Equity - Unrecogn
Shareholders' Equity - Unrecognized Share-based Compensation (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 706 |
RSUs and PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 655 |
Weighted Average Service Period | 2 years 7 months 6 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Compensation Costs | $ 51 |
Weighted Average Service Period | 1 year |
Shareholders' Equity - Stock Op
Shareholders' Equity - Stock Option Activity (Details) - $ / shares shares in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Jul. 01, 2022 | |
Number of Shares | ||
Options outstanding, beginning balance (in shares) | 0.9 | |
Canceled or expired (in shares) | (0.5) | |
Options outstanding, ending balance (in shares) | 0.4 | 0.9 |
Weighted Average Exercise Price Per Share | ||
Options outstanding, beginning balance, exercise price (in dollars per share) | $ 66.76 | |
Canceled or expired, exercise price (in dollars per share) | 84.39 | |
Options outstanding, ending balance, exercise price (in dollars per share) | $ 45.08 | $ 66.76 |
Options outstanding, weighted average remaining contractual term | 9 months 21 days | 6 months 14 days |
Shareholders' Equity - Restrict
Shareholders' Equity - Restricted Stock Units And Performance Share Units (Details) - Restricted Stock Units And Performance Share Units $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 15.4 |
Granted (in shares) | shares | 4.5 |
Vested (in shares) | shares | (4.3) |
Forfeited (in shares) | shares | (0.6) |
Outstanding, ending balance (in shares) | shares | 15 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance, grant date fair value (in dollars per share) | $ / shares | $ 52.89 |
Granted, grant date fair value (in dollars per share) | $ / shares | 43.79 |
Vested, grant date fair value (in dollars per share) | $ / shares | 53.28 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 62.12 |
Outstanding, ending balance, grant date fair value (in dollars per share) | $ / shares | $ 49.71 |
Aggregate value of restricted stock awards vested | $ | $ 186 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Program (Details) | Sep. 30, 2022 USD ($) |
Stock Repurchase Program Effective Until July 25, 2023 | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, number of shares authorized to be repurchased | $ 5,000,000,000 |
Share Repurchase Program | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, remaining authorized repurchase, amount | $ 4,500,000,000 |
Income Tax Expense - Tax Expens
Income Tax Expense - Tax Expense and Effective Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income before taxes | $ 84 | $ 704 |
Income tax expense | $ 57 | $ 94 |
Effective tax rate | 68% | 13% |
Income Tax Expense - Additional
Income Tax Expense - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Jul. 01, 2022 | |
Income Tax Disclosure [Line Items] | |||
Increase to unrecognized tax benefits as a result of ongoing discussions with various taxing authorities | $ 16 | ||
Unrecognized tax benefits | $ 1,026 | $ 1,047 | |
Penalties and interest accrued on unrecognized tax benefits | 264 | ||
Potential payables related to unrecognized tax benefits | 1,150 | ||
Federal tax related to adjustments for transfer pricing | 1,600 | ||
Minimum | |||
Income Tax Disclosure [Line Items] | |||
Penalties and interest accrued on unrecognized tax benefits | 600 | ||
Mandatory deemed repatriation tax obligations | 100 | ||
Maximum | |||
Income Tax Disclosure [Line Items] | |||
Penalties and interest accrued on unrecognized tax benefits | 700 | ||
Mandatory deemed repatriation tax obligations | 150 | ||
Tax Years 2008 Through 2015 | |||
Income Tax Disclosure [Line Items] | |||
Federal tax related to adjustments for transfer pricing | $ 449 |
Income Tax Expense - Unrecogniz
Income Tax Expense - Unrecognized Tax Benefits (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Unrecognized tax benefit, beginning balance | $ 1,047 |
Gross increases related to current year tax positions | 2 |
Gross decreases related to prior year tax positions | (18) |
Settlements | (2) |
Lapse of statute of limitations | (3) |
Unrecognized tax benefit, ending balance | $ 1,026 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 27 | $ 610 |
Weighted average shares outstanding: | ||
Basic (in shares) | 316 | 310 |
Employee stock options, RSUs, PSUs, and ESPP (in shares) | 3 | 6 |
Diluted (in shares) | 319 | 316 |
Income per common share | ||
Basic (in dollars per share) | $ 0.09 | $ 1.97 |
Diluted (in dollars per share) | $ 0.08 | $ 1.93 |
Anti-dilutive potential common shares excluded (in shares) | 8 | 1 |
Employee Termination, Asset I_3
Employee Termination, Asset Impairment and Other Charges - Expense Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Postemployment Benefits [Abstract] | ||
Employee termination benefits | $ 24 | $ 15 |
Asset impairments and losses on disposal of assets | 0 | 3 |
Total employee termination, asset impairment, and other charges | $ 24 | $ 18 |
Employee Termination, Asset I_4
Employee Termination, Asset Impairment and Other Charges - Business Realignment Activities (Details) - Employee Termination Benefits - Business Realignment $ in Millions | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Accrual balance at July 1, 2022 | $ 17 |
Charges | 24 |
Cash payments | (28) |
Accrual balance at September 30, 2022 | $ 13 |